Exploration of Selection Bias Issues for the DoD Federal Employees Benefits Program Demonstration (2002)

by Farley, Donna O.; Wynn, Barbara O.

• ISBN13: 9780833031211
• ISBN10: 083303121X
• Format: Paperback
• Copyright: 2002-06-19
• Publisher: RAND Corporation

Summary

This report presents the results of that analysis. It describes the supplemental health benefits options available to Medicare beneficiaries in the demonstration sites, reviews the theoretical literature on risk selection, and develops hypotheses regarding risk selection that can be tested in the evaluation of the demonstration. It also suggests analytic methods for measuring selection and estimating the extent to which it may occur for enrollments in the FEHBP demonstration. The methods are designed to estimate (1) the extent to which adverse selection occurs in Medicare supplemental insurance enrollments for the DoD FEHBP demonstration, and (2) how much effect selection has on DoD health care costs for Medicare-eligible beneficiaries.

Table of Contents

Preface	iii
Figure and Tables	vii
Summary	ix
Introduction	1	(6)
Policy Framework	1	(1)
Scope of This Work	2	(1)
Provisions of the DoD FEHBP Demonstration	3	(1)
Eligibility and Enrollment Policies	3	(1)
Financing	3	(1)
Demonstration Sites	4	(1)
Organization of This Report	4	(3)
Health Plan Options and Gaps in the Demonstration Markets	7	(8)
Medicare Benefits	7	(1)
DoD Health Benefits	8	(1)
FEHBP Plans	9	(1)
Individual Medicare Supplemental Policies	9	(4)
Choices Available to Beneficiaries	13	(1)
Comparison Tools	14	(1)
Selection Issues in FEHBP Benefits for Medicare-Eligible DoD Beneficiaries	15	(10)
Health Insurance Overview	15	(1)
Insurer Risk in Medicare	16	(1)
Theoretical Model of Health Insurance	17	(1)
Factors Contributing to Adverse Selection	18	(3)
Plan Benefits, Costs, and Performance	19	(1)
How Information Influences Coverage Choices	20	(1)
Selection Issues in Medicare and FEHBP	21	(4)
Supplemental Insurance in the Medicare Program	21	(1)
Experiences in the FEHBP Program	22	(3)
Hypotheses for Selection Behaviors in FEHBP Enrollments	25	(6)
Access to and Use of MTFs	26	(1)
Managed Care	26	(1)
Fee for Service	27	(1)
Good Information	28	(3)
A Suggested Methodology to Evaluate Selection Bias	31	(8)
Occurrence of Selection Bias	31	(5)
The Nested Enrollment Choice	31	(1)
Analytic Approaches	32	(2)
Measures of Predictor Variables	34	(2)
Effects of Selection Bias	36	(2)
Discussion	38	(1)
BIBLIOGRAPHY	39	(152)
APPENDICES
A. Nationwide Medicare and FEHBP Plan Coverage	43	(4)
B. Theoretical Model of Health Plan Offerings	47	(6)
C. Adair, Iowa	53	(30)
D. Coffee, Georgia	83	(16)
E. Dallas, Texas	99	(14)
F. Dover Air Force Base, Delaware	113	(14)
G. Fort Knox, Kentucky	127	(14)
H. Greensboro/Winston-Salem/High Point, North Carolina	141	(10)
I. Humboldt County, California	151	(14)
J. Naval Hospital, Camp Pendleton, California	165	(18)
K. New Orleans, Louisiana	183	(8)
L. Commonwealth of Puerto Rico	191