As Members of
Congress consider Medicare reform options, a recurrent issue is the
provision of health plan choice for residents of rural
areas.
The Rural Policy
Research Institute (RUPRI) recently released a comparative analysis
of health plan choice in rural areas. While the RUPRI study also
looks at choice in metropolitan areas and total health plan choice,
it demonstrates the profound differences in the availability of
health plan choice among three different models of health
insurance:
- Medicare + Choice
Program, Part C of the Medicare program, created by the Balanced
Budget Act of 1997;
- Federal Employees
Health Benefits Program (FEHBP), authorized under Chapter 89 of
Title 5 of the United States Code, for the coverage of
approximately 8.3 million federal employees and retirees and their
families; and
- Private-sector
commercial health maintenance organizations (HMOs).
These health plans
and the programs that sponsor them operate under very different
principles and legal arrangements. Thus, each has its own entirely
different dynamics. This has direct relevance to Members of
Congress who are considering Medicare reform.
RUPRI examined all
three models and compared their availability to residents in rural
counties nationwide. In making this comparison, RUPRI researchers
looked at FEHBP activity compared to actual availability of plans,
as they did in the cases of Medicare + Choice and commercial
HMOs.
It is worth
noting, in this context, that their measurement of activity in the
FEHBP does not necessarily reflect plan availability. For example,
if a rural county has members enrolling in three plans, that does
not mean there are only three plans available; there may be many
more. Total activity reflects the number of plans that were chosen,
whereas the number offered could be higher.
How Health Plan Models Compare in
Rural Coverage
-
Medicare + Choice. Medicare
+ Choice had
no plans available in 91 percent of rural
counties, with only one plan available in 7 percent of counties.
Choice among multiple plans (two or more) was available in only 2
percent of rural counties.
-
Commercial HMOs. Commercial
HMOs were not available at all in 7 percent of rural counties, and
at least one plan was available in 14 percent. Choice among two to
nine plans was available in 77 percent of rural counties, while
choice among 10 or more plans was available in only 2 percent.
-
FEHBP. The FEHBP offers
choice among 12 nationwide fee-for-service (FFS) and preferred
provider organization (PPO) plans and up to 20 HMOs, depending upon
geographic location, to all 8.3 million enrollees.
RUPRI found that 87
percent of rural counties had six or more health plans available to
federal employees and retirees. Thirty percent of rural counties
had people enrolled in the FEHBP enrolling in 10 or more different
plans.
Fifty seven percent had
enrollees in from six through nine plans. Eleven percent of rural
counties had enrollees in from three through five plans. There were
no rural counties without someone enrolled in the FEHBP, and only 2
percent where only one or two plans have enrollees.
Health Care Choice in Rural Areas
|
Plan Availability by
County
|
Medicare +
Choice
|
Commercial
HMOs
|
FEHBP
|
|
|
|
|
|
|
No plans
|
91%
|
7%
|
0%
|
|
1 plan
|
7%
|
14%
|
n/a
|
|
1-2 plans
|
n/a
|
n/a
|
2%
|
|
Multiple plans
|
2%
|
n/a
|
n/a
|
|
2-9 plans
|
n/a
|
77%
|
n/a
|
|
3-5 plans
|
n/a
|
n/a
|
11%
|
|
6-9 plans
|
n/a
|
n/a
|
57%
|
|
10 or more plans
|
n/a
|
n/a
|
30%
|
Conclusion
The FEHBP model offers the most choice of health plans: 87
percent of rural counties have six or more competing health plans.
Thus, the FEHBP offers the greatest number of plans to its members
in rural areas. Private sector commercial HMOs, while more widely
available than Medicare + Choice, do not offer nearly the amount of
health plan choice available to rural residents enrolled in the
FEHBP. Medicare + Choice offered the least amount of choice to its
participants.