Policy implications of risk selection in Medicare HMOs: is the federal payment rate too high?
For more than a decade, Medicare beneficiaries have had the option to enroll in risk-contract health maintenance organizations (HMOs) in which the federal payment is set at 95 percent of the estimated fee-for-service cost.  Two questions have been raised by health policy researchers ever since: Are Medicare HMO enrollees healthier than the elderly who receive fee-for-service care?  If so, does the government payment rate for Medicare HMOs accurately reflect the costs that would have been incurred by a healthier population?  This Issue Brief discusses three recent studies of the extent to which risk-contract HMOs experience biased selection and the cost of this to Medicare.
D000368:Aged; D002204:Capitation Fee; D003284:Contract Services / Q000191:economics; D006279:Health Maintenance Organizations / Q000191:economics*; D006291:Health Policy; D006301:Health Services Needs and Demand; D006305:Health Status Indicators; D006801:Humans; D015273:Insurance Selection Bias; D006278:Medicare / Q000191:economics*; D012308:Risk Management / Q000191:economics; D014481:United States