Trends in Medicare Supplementary Insurance: 1992-96

Medicare reimburses about one-half of the health care goods and services used by the eligible population (Laschober and Olin, 1996). Medicare beneficiaries usually find it desirable to hold supplementary health insurance to cover the cost sharing and services that Medicare does not cover. A previous report described the distribution of supplementary insurance in 1991, the first year the Medicare Current Beneficiary Survey (MCBS) was in the field (Chulis et al., 1993). That report focused on the elderly population living in the community who received care in the fee-for-service sector. The distribution of supplementary insurance has been changing rapidly in recent years in response to increased managed care options under Medicare, additional legislated ways to qualify under Medicaid, a lessening in support from employers toward retirement benefits, and increasing costs of individually purchased medigap policies. This report brings the supplementary insurance distribution up to date through 1996, and analyzes gains and losses in the insurance shares from 1992-96. Expanding on earlier reports, the entire Medicare population (aged, disabled, living in the community, living in institutions) is included. We present more detailed categories than previous reports, including breakouts of qualified Medicare beneficiaries (QMBs) and special low income Medicare beneficiaries (SLMBs) under Medicaid. The report also shows separate distributions of supplementary insurance for persons in the fee-for-service and managed care sectors. The earlier report used the MCBS Access to Care file which (of necessity) included only people continuously enrolled in Medicare for the entire year. Persons who began their Medicare coverage during the year, or who died during the year, were not included in that report. The data in this report are from the 1992 MCBS Cost and Use file and the 1996 Access to Care file, which has been adjusted to reflect the 1996 ever-enrolled population. Thus the data for both years includes all Medicare beneficiaries enrolled at any time in those years. To the degree that changes in the supplementary insurance distribution are being spearheaded by newer enrollees migrating toward the newer forms of insurance while the older beneficiaries (who die at higher rates) are leaving the more traditional forms of insurance, including these groups adds more than just cosmetic value. (For a description of the MCBS design and methods, see Adler, 1994).