In this population-based analysis of Medicare managed care enrollees, a cancer diagnosis did not precipitate voluntary disenrollment from a Medicare managed care plan to fee-for-service Medicare. In the 2 years following cancer diagnosis, beneficiaries with cancer were less likely to disenroll than their matched cancer-free peers. This result was evident across a spectrum of different cancers and in nearly all strata of age, sex, race, and geographic region. Although characteristics of Medicare managed care plans influenced the likelihood of disenrollment, they did not meaningfully confound or modify the relationship between cancer status and disenrollment.
We examined voluntary disenrollment from Medicare managed care to fee-for-service Medicare presuming that the frequency with which seniors exercise their option to disenroll signals their dissatisfaction with Medicare managed care, which in turn reflects actual or perceived problems with access to care or quality of care in their plans. If voluntary disenrollment from Medicare managed care is, in fact, beneficiaries’ way of “voting with their feet,” then our results suggest that enrollees facing a serious, potentially life-threatening illness are as satisfied with Medicare managed care, if not more so, than their cancer-free peers. This conclusion is consistent with surveys that have compared Medicare beneficiaries in managed-care plans with those in fee-for-service Medicare and found similar levels of overall satisfaction (33
Our results may also be related to reduced cost sharing for Medicare-covered services and the availability of outpatient prescription drug coverage in Medicare managed care plans. During the study period, Medicare beneficiaries lacking employer-sponsored supplemental insurance faced deductibles and coinsurance payments for most covered health services (including most physician-administered chemotherapy, covered under Part B of Medicare) and the full costs of outpatient prescription drugs that were not covered under Part B. For these beneficiaries, enrolling in a Medicare managed care plan was generally a lower-cost alternative to purchasing an expensive supplemental “Medigap” policy (34
). Several studies (31
) have shown that the absence or removal of a prescription drug benefit was associated with a greater likelihood of disenrollment in Medicare managed care plans. Surveys of Medicare beneficiaries have found greater financial access to care and greater satisfaction with costs among Medicare managed care enrollees than beneficiaries with traditional fee-for-service coverage (21
). Medicare managed care enrollees may also have remained in their plans if they were concerned about obtaining a supplemental insurance policy upon returning to fee-for-service Medicare. For beneficiaries who did not enroll in a managed care plan when they first became eligible for Medicare, resumption of a self-purchased supplemental policy was not guaranteed (38
An alternative explanation for our findings is that after developing a serious illness, seniors may be less willing to make a change in insurance coverage, even if such a change would facilitate access to a broader choice of providers. A preference for the status quo, as described in the economic literature (39
), has been observed in health insurance decisions (42
) and may be more common with increasing age (43
). Substantial gaps in knowledge about the Medicare program in general and Medicare managed care plans in particular (44
) suggest a mechanism for enrollee inertia: beneficiaries may be especially reluctant to change their insurance enrollment if they do not fully understand their options.
Breast, colorectal, prostate, and lung cancers are often treated by community-based physicians and do not necessarily require services that are available only at specialized centers. Therefore, even Medicare managed care plans that limit access to specific providers may still offer satisfactory care to patients with these common cancers. Positing that beneficiaries with cancers that are rarer or require more complex or less standardized treatment regimens might be more inclined to disenroll from Medicare managed care, we repeated our analyses in cohorts with non-Hodgkin lymphoma, acute leukemia, and soft-tissue sarcoma, and we found no effect of the cancer diagnosis on the likelihood of disenrollment. We also expected that disenrollment would be more common among enrollees diagnosed with advanced-stage cancer, for whom a generally poor prognosis may provoke a sense of urgency and a desire for specialty consultations and investigational therapies. However, we observed no difference in disenrollment by stage at diagnosis. Therefore, despite the array of mechanisms used by Medicare managed care plans to manage care and control costs, cancer patients may not feel so restricted in their choice of providers that they will leave managed care and return to traditional fee-for-service Medicare.
Our results echo those of Riley et al. (46
) who evaluated disenrollment in Medicare managed care plans in the late 1980s and found that beneficiaries diagnosed with cancer after enrollment in Medicare managed care were less likely than other beneficiaries to disenroll. With the expansion of the Medicare managed care market since 1990 (3
), we were able to evaluate a much larger sample of beneficiaries enrolled in a more recent era. Although the Medicare managed care market has evolved considerably in the past two decades (47
), the trends that we observed were similar to those reported by Riley et al. (46
). Our study also corroborates the low disenrollment rates found by Field et al. (49
) in their analysis of enrollees with cancer in health maintenance organizations in Medicare, Medicaid, and commercial plans.
Several limitations of our analysis warrant mention. Because Medicare does not process claims for managed care enrollees, we had no information on the medical conditions and health care utilization of beneficiaries in the cancer-free cohorts. To the degree that health status and the incidence of other diseases are associated with age, sex, race, and geographic location, we would expect the matched cohorts with and without cancer to be similar in this regard. We also had no information on enrollees’ socioeconomic status, which has been shown to influence participation in Medicare managed care (8
), nor did we have information on beneficiaries’ relationships with specific providers. Our dataset did not permit identification of specific plan factors, such as the type of supplemental benefits offered and cost-sharing requirements, which are also likely to influence Medicare managed care enrollment and disenrollment decisions (31
The geographic scope of the study sample may limit the generalizability of our findings. Although SEER areas are relatively representative of the US population that is 65 years or older (25
), health insurance markets vary widely and our sample is heavily influenced by the experience of beneficiaries in California, a state with a mature managed care market. The applicability of our findings to other Medicare managed care markets may be limited. In addition, we did not examine the experience of beneficiaries in private Medicare fee-for-service plans, a growing segment of the Medicare program (4
Our findings have practical implications for Medicare beneficiaries, managed care plans, and policymakers. In an effort to improve continuity of care, stabilize the Medicare managed care market, and discourage beneficiaries from “gaming the system,” the 2003 Medicare Modernization Act eliminated the opportunity to switch plans monthly and limited beneficiaries to an annual plan election followed by a brief period during which they could make one additional plan change (52
). Although the new policy, implemented in 2006, resembles the annual open enrollment period commonly offered by employers who provide a choice of commercial insurance plans, the “lock-in” provision in Medicare has prompted concern that seniors receiving dissatisfactory or substandard care might suffer as a result of reduced choice. However, we did not observe an exodus of enrollees subsequent to cancer diagnosis during our study period, before 2006, when monthly opt-out was possible. Thus, the move from monthly to yearly open enrollment appears unlikely to be problematic for most Medicare managed care enrollees, including those with a serious illness.
In addition to limiting the frequency of changes in plan enrollment, the Medicare Modernization Act encourages the expansion of Medicare managed care to include a wider array of plans and a larger number of beneficiaries, prompting concern about the quality of care in Medicare managed care, especially among vulnerable subgroups of the Medicare population (53
). The adoption of increasingly sophisticated beneficiary-level risk adjustment methods for determining Medicare managed care payments may encourage plans to focus more on the needs of seriously ill beneficiaries and thus enhance services. Our results suggest that Medicare managed care enrollees with cancer are sufficiently satisfied with their care to remain in a managed care plan. Monitoring of access to care and quality of care, within both the fee-for-service and managed care segments of Medicare, remains a priority.
The enrollment and disenrollment decisions of Medicare beneficiaries also have financial implications for the Medicare program. Disproportionate disenrollment of sick enrollees would exacerbate favorable selection within the managed care sector of Medicare and simultaneously would increase the average profit per enrollee for Medicare managed care plans. Our findings indicate that enrollees with cancer do not disenroll from Medicare managed care plans to traditional fee-for-service Medicare at a disproportionate rate. Analysis of enrollees with other serious conditions would complement these results and advance our understanding of the causes and ramifications of Medicare managed care disenrollment.