Health insurance knowledge among medicare beneficiaries - Other Articles

Health Services Research, Feb, 2002 by Lauren A. McCormack, Steven A. Garfinkel, Judith H. Hibbard, Susan D. Keller, Kerry E. Kilpatrick, Beth Kosiak

The Medicare provisions of the Balanced Budget Act (BBA) of 1997 resulted in some of the most sweeping changes to the Medicare program since its inception in 1965. In addition to several payment system changes intended to better control the growth in Medicare expenditures, the legislation created the "Medicare Choice" program, which increased the number and type of health insurance options for Medicare beneficiaries. Beginning in 1998, several new types of health plans, including provider-sponsored organizations, preferred provider organizations, private fee-for-service plans, and plans attached to medical savings accounts (MSAs), could be sold to beneficiaries, in addition to the array of existing fee-for-service and managed care plans. The legislation represents a dramatic policy shift by Congress, "setting Medicare on a course toward a more competitive and consumer-driven model" (United States General Accounting Office 1998, p. 4). Others have referred to the watershed BBA reforms as being "among the mos t important social and health policy legislation of the past three decades" (Ethridge 1998, p. 573).

With the rise in the number of health coverage choices and the potential for increased confusion, the need for consumer information has become increasingly apparent. A key component of the BBA mandate is the development of a national information campaign to inform beneficiaries about their health insurance choices and about ongoing modifications to the Medicare program. The Health Care Financing Administration (HCFA) initiated the National Medicare Education Program (NMEP) to meet the requirements of the BBA and to support informed decision making by its beneficiaries. HCFA's NMEP is a multifaceted program that employs numerous communication and outreach strategies, including printed materials, toll-free hotlines, health fairs, electronic media (e.g., the Internet), and volunteer counseling programs. A major part of the campaign has been the development of the Medicare & You handbook (formerly The Medicare Handbook).

This article provides an early assessment of HCFA's new consumer information materials in terms of their effect on beneficiary knowledge. We address the following research questions: Are beneficiaries who received new materials more knowledgeable about the Medicare program and their health insurance options relative to those who do not receive such information? Is more information associated with higher levels of knowledge? Does knowledge depend on sociodemographic and other characteristics of the beneficiary?

PREVIOUS RESEARCH

There have only been a few multivariate studies that specifically address factors associated with knowledge of health insurance among Medicare beneficiaries. Most studies (Cafferata 1984; Hibbard et al. 1998; Lambert 1980; Marquis 1983; McCall, Rice, and Sangl 1986) found higher educational levels to be significantly associated with greater health insurance knowledge. Other factors commonly associated with higher levels of knowledge include higher income (Hibbard et al. 1998; Lambert 1980; Marquis 1983; McCall, Rice, and Sangl 1986; Rice, McCall, and Boismier 1991), younger age (Cafferata; Lambert 1980; McCall, Rice, and Sangl 1986), being White (Marquis 1983; McCall, Rice, and Sangl 1986), and being male (Lambert 1980).

Using data from the Health Insurance Experiment, Marquis (1983) found higher knowledge to be significantly associated with being offered a choice of health plans, longer length of enrollment in one's plan, and use of physician services among control group members. She also reported that knowledge was adversely affected by plan complexity. Using the 1977 National Medical Expenditure Survey, Cafferata (1984) found that having supplemental insurance was positively related to knowledge. With the exception of the Cafferata study, neither health status nor use of services was found to be significant explanatory variables in any of the previously mentioned studies.

Several of these studies indicated that health insurance knowledge among Medicare beneficiaries is low. The most recent study by Hibbard et al. (1998) suggests that it is quite inadequate. The authors reported that nearly 30 percent of all respondents know almost nothing about health maintenance, organizations (HMOs) and that the large majority of respondents did not understand the differences between the fee for service and managed-care delivery systems.

This study contributes to literature on beneficiary knowledge of their health insurance options by evaluating the effects of HCFA's new consumer information materials using a randomized, controlled study.

DATA

The data source for the study consisted of two separate beneficiary surveys: one of new beneficiaries who were just aging into the Medicare program at the time of the interview and a second survey of experienced beneficiaries who ranged from 65 to 98 years of age. Residents of the 10-county Kansas City metropolitan statistical area during fall and winter 1998 were included in the sampling frames.