Medicare HMOs: who joins and who leaves?

Medicare risk health maintenance organizations (HMOs) are an increasingly common alternative to fee-for-service Medicare. To date, there has been no examination of whether the HMO program is preferentially used by blacks or by persons living in lower-income areas or whether race and income are associated with reversing Medicare HMO selection. This question is important because evidence suggests that these beneficiaries receive poorer care under the fee-for-service-system than do whites and persons from wealthier areas. Medicare enrollment data from South Florida were examined for 1990 to 1993. Four overlapping groups of enrollees were examined: all age-eligible (age 65 and over) beneficiaries in 1990; all age-eligible beneficiaries in 1993; all age-eligible beneficiaries residing in South Florida during the period 1990 to 1993; and all beneficiaries who became age-eligible for Medicare benefits between 1990 and 1993. The associations between race or income and choice of Medicare option were examined by logistic regression. The association between the demographic characteristics and time staying with a particular option was examined with Kaplan-Meier methods and Cox Proportional Hazards modeling. Enrollment in Medicare risk HMOs steadily increased over the 4-year study period. In the overall Medicare population, the following statistically significant patterns of enrollment in Medicare HMOs were seen: enrollment of blacks was two times higher than that of non-blacks; enrollment decreased with age; and enrollment decreased as income level increased. For the newly eligible population, initial selection of Medicare option was strongly linked to income; race effects were weak but statistically significant. The data for disenrollment from an HMO revealed a similar demographic pattern. At 6 months, higher percentages of blacks, older beneficiaries (older than 85), and individuals from the lowest income area (less than $15,000 per year) had disenrolled. A small percentage of beneficiaries moved between HMOs and FFS plans multiple times. These data on Medicare HMO populations in South Florida, an area with a high concentration of elderly individuals and with one of the highest HMO enrollment rates in the country, indicate that enrollment into and disenrollment from Medicare risk HMOs are associated with certain demographic characteristics, specifically, black race or residence in a low-income area.