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Medicare HMO Quit Rate Tied To Drug Benefit

MANAGED CARE June 2000. © MediMedia USA
News and Commentary

Medicare HMO Quit Rate Tied To Drug Benefit

MANAGED CARE June 2000. ©2000 MediMedia USA

For years, it's been a matter of educated conjecture that some Medicare HMO enrollees skip from health plan to health plan to take advantage of pharmacy benefits: Once an enrollee exhausts the benefit in one plan, he jumps to another and begins with a clean slate.

Now, a study in the Journal of the American Medical Association backs up at least some of the conventional wisdom with empirical findings. According to the study, Medicare+Choice enrollees are twice as likely to disenroll if they have reached their annual pharmacy benefit cap. Moreover, the timing of disenrollment is closely linked to the time at which the prescription drug benefit is exhausted.

Thomas Rector, Ph.D., evaluated disenrollment patterns at four network-model Medicare HMOs, which had annual benefit limits of $300, $500, $600, and $1,000.

Rector, who does research for UnitedHealth Group's policy arm, found similarity across the plans in terms of disenrollment characteristics, regardless of the benefit limit.

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