Health Plan Selection for Medicare Eligible Enrollees in the Federal Employees Health Benefits Program
How do variations in out-of-pocket premiums and benefits influence plan choice among Medicare-eligible enrollees in the Federal Employees Health Benefits (FEHB) program? Researchers at Emory University examined the following questions: (1) How sensitive is the health plan choice of Medicare eligible persons to variation in premiums? (2) How sensitive is the health plan choice of Medicare eligible persons to variation in plan benefits? (3) Do the plan choice of Medicare eligible enrollees reflect adverse selection for plans with greater benefits? (4) How strong is the preference for fee-for-service plans among Medicare eligible enrollees? How much must fee-for-service premiums increase to induce them to pick managed care plans? (5) How would different subsidy schemes affect health plan enrollment for Medicare eligible enrollees? The researchers generated policy-relevant findings concerning two approaches to Medicare reform: (1) a defined contribution subsidy and an “a la cart” plan that competes on the basis of price; or (2) a “bundled service” plan that competes on the basis of price and benefits. This study simulates the effect of various Medicare reform proposals by providing estimates of how enrollees react to changes in premiums and benefits offered and local health care costs. The researchers believe that the study substantially contributes to an understanding of health plan choice for the Medicare population.