Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
State Health Insurance 
Assistance Program 
Assistance to Beneficiaries 
JANET REHNQUIST 
Inspector General 
FEBRUARY 2002 
OEI-07-00-00580  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG) mandated by Public Law 95-452, as amended 
by Public Law 100-504, is to protect the integrity of the Department of Health and Human Services 
programs as well as the health and welfare of beneficiaries served by them. This statutory mission is 
carried out through a nationwide program of audits, investigations, inspections, sanctions, and fraud 
alerts.  The Inspector General informs the Secretary of program and management problems and 
recommends legislative, regulatory, and operational approaches to correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the Office of Inspector 
General. It conducts short-term management and program evaluations (called inspections) that focus 
on issues of concern to the Department, the Congress, and the public. The inspection reports provide 
findings and recommendations on the efficiency, vulnerability, and effectiveness of departmental 
programs. 
OEI's Kansas City office prepared this report under the direction of Brian T. Pattison, Regional 
Inspector General.  Principal OEI staff included: 
Region  Headquarters 
Zula Crutchfield, Project Leader  Linda Frisch, Program Specialist

Marco Villagrana, Program Analyst  Scott Horning, Program Analyst

Elander Phillips, Program Inspections Assistant  Barbara Tedesco, Mathematical Statistician

Perry A. Seaton, Team Leader

To obtain copies of this report, please call the Kansas City Regional Office at (816) 426-3697. 
Reports are also available on the World Wide Web at our home page address: 
http://oig.hhs.gov/  E X E C U T I V E  S U M M A R Y  
PURPOSE 
To assess the State Health Insurance Assistance Program (SHIP) performance in providing 
information, counseling, and assistance to Medicare beneficiaries by examining those impacted 
by non-renewal of managed care organizations (MCOs). 
BACKGROUND 
The Secretary of the Department of Health and Human Services has stressed the need to

improve and expand educational services to Medicare beneficiaries. The Centers for Medicare

& Medicaid Services (CMS) is undertaking broad-based initiatives to address this educational

need. The SHIPs are one part of this program. They provide information, counseling, and

referral services to Medicare beneficiaries at the local level. The SHIP counselors, most of

whom are volunteers, carry out this assistance through in-person or telephone counseling,

developing and distributing written materials, and conducting group seminars and presentations.

Over the past 4 years, many MCOs have either withdrawn from the Medicare program or

reduced their service area, thereby affecting over 2.2 million beneficiaries. We evaluated how

well SHIPs served beneficiaries affected by these MCO non-renewals.  We conducted a mail

survey with a national stratified random sample of Medicare beneficiaries who received notice

of their MCO non-renewal in Calendar Year 

(CY) 2000 because these beneficiaries were more likely to seek information and counseling

services about their Medicare coverage in response to the non-renewal of their HMO.  Further,

we gathered information from SHIP directors and counselors from seven sample States,

selected based upon geographic and regional differences.  Such information included personal

interviews, operational policies, program funding, training, and workload information.

FINDINGS 
Beneficiaries in the Sample States Sought Assistance in Greater Numbers During 
Periods of MCO Non-renewals 
Generally, call volume data from the sampled SHIPs showed increased telephone calls during 
the fall of CY 2000 after beneficiaries received notices of the MCO non-renewal.  Directors 
from all sampled States and most counselors noted increased workloads, leading to delays in 
assisting beneficiaries.  The SHIP directors and counselors describe beneficiaries seeking their 
assistance as angry, confused, and overwhelmed when initially contacting SHIP about the non-
renewal of their managed care plan. 
i 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  The SHIPs Target Their Program to Meet the Needs of the Local Community 
The SHIPs use a variety of initiatives to meet the unique needs of their clients, as clients often 
lack knowledge of local, State, and Federal programs. They provide face-to-face counseling 
and referrals to Medicaid, the Social Security Administration (for Supplemental Security 
Income), and programs for utility assistance, housing assistance, nutrition, property tax 
abatement, and other local services for aged or disabled clients. SHIPs also use innovative 
tools to reach all eligible individuals including those with cultural differences, language barriers, 
and special needs such as the elderly and disabled.  Beneficiaries who used SHIP services 
were satisfied and rated the quality of the services as average or above. Most users stated they 
were able to obtain the information needed to make their health care decisions. 
The SHIP Counselors Believe They Are Prepared to Respond to Most Concerns, 
Yet Expressed Frustration with the Timeliness of MCO Non-renewal Information 
Seventy-six percent of the SHIP counselors believe the training they received prepared them to 
respond to most concerns and questions beneficiaries may have about their health care 
coverage. However, while 83 percent of SHIP counselors received specific information on 
managed care non-renewals, only 67 percent believe the information was provided when it was 
needed. 
Beneficiaries Are Interested in SHIP Services, Yet Most Were Unaware of the 
Program 
Only 13 percent of the beneficiaries surveyed knew of SHIP and only 37.5 percent of these

had used its services. To improve beneficiary knowledge, CMS has mailed publications

designed to inform beneficiaries about available health care services, including SHIPs. These

publications include a listing of contacts for SHIP and other agencies that can provide

assistance and counseling as well as the national

1-800-Medicare toll-free number. Survey respondents reported that while these information

sources are consulted and are useful, they remained unaware of the SHIPs.

RECOMMENDATIONS 
The CMS has implemented a broad-based initiative, the National Medicare Education 
Program, to educate beneficiaries about the Medicare program. The programs educational 
sources include the toll-free number, publications, the Internet, forums, advertising, and SHIPs, 
just to name a few. The SHIPs fulfill an important role by economically providing personal 
Medicare counseling services through volunteers, many of whom are also Medicare 
beneficiaries. The CMS educational initiatives complement each other and each serves a role in 
helping to assure beneficiaries can obtain needed information and referrals in the manner that 
best suits their needs. 
The CMSs own data indicate a significant number of beneficiaries seek individual counseling 
including the localized services SHIPs provide. Historically, such 
ii 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  individualized services were provided by Social Security field offices, but this is mostly no 
longer true. 
We, therefore, offer the following recommendations to improve comprehensive beneficiary 
information and assistance services, including those provided by SHIPs. 
<	 Review the Appropriate Role(s) for Each Information and Referral 
Source to Assure Beneficiaries Needs Are Being Met 
<	 Explore Ways to Appropriately Increase Knowledge of SHIPs, Their 
Function, and Their Local Telephone Number in CMS Publications 
or Through Other Methods 
<	 Coordinate Closely with SHIPs To Ensure Timely Dissemination of 
MCO Non-renewal Information 
AGENCY COMMENTS 
In its written response to the report, CMS addressed the three report recommendations as a 
single recommendation. In essence, CMS agreed with the last recommendation but not the first 
two. The CMS believes that exploring the appropriate role for all information and referral 
sources goes beyond the scope of the study.  The CMS also expressed concern with our 
recommendation to modify their publications and notices, citing the possibility of inappropriate 
beneficiary contacts to SHIPs. 
The overall effectiveness of SHIPs, in the context of all available information sources, was 
within the scope of our study. We used Medicare beneficiaries experiences with HMO non-
renewals not to limit the scope of our study, but rather to provide a means to understand how 
the SHIPs work, how beneficiaries make use of all the information sources available to them, 
and how SHIPs assist beneficiaries with making choices regarding their Medicare coverage. 
We clarified this in our methodology section. 
We found that the SHIPs are uniquely positioned to provide local information and referral 
services to diverse groups of Medicare beneficiary, irrespective of the beneficiaries information 
needs.  Given that CMS is implementing a broad-based initiative to educate beneficiaries about 
the Medicare program and given that beneficiaries are seeking information sources when faced 
with non-renewal of MCOs, we believe it is an appropriate time to review the role of the 
various information and referral sources. 
In addition, we continue to recommend modification to notices and publications to prominently 
display SHIP as well as other CMS beneficiary information, since 87 percent of the 
beneficiaries we contacted were not aware of the SHIP program. 
We have made revisions to the report based on CMSs comments. The full text of CMSs 
comments is contained in Appendix D. 
iii 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  T A B L E  O F  C O N T E N T S  
PAGE

EXECUTIVE SUMMARY ...................................................... i

INTRODUCTION .............................................................1

FINDINGS  ..................................................................8

Beneficiaries Sought Assistance in Greater Numbers ...............................8

SHIPs Meet Local Community Needs  .........................................9

SHIP Counselors Prepared to Answer Most Issues  ..............................11

Beneficiaries Want Ship Services  ............................................12

RECOMMENDATIONS ...................................................... 15

AGENCY COMMENTS  ...................................................... 16

ENDNOTES ................................................................ 18

APPENDICES

A: Beneficiary Counseling and Assistance Grants  ................................19

B: Estimates and Confidence Intervals - Beneficiary Sample  ........................20

C: National Performance Review - SHIP Counseling and Presentation

Contacts Calendar Year 2000 ............................................ 21

D: Agency Comments  ....................................................24
 I N T R O D U C T I O N  
PURPOSE 
To assess the State Health Insurance Assistance Program (SHIP) performance in providing 
information, counseling, and assistance to Medicare beneficiaries by examining those impacted 
by non-renewal of managed care organizations (MCOs). 
BACKGROUND 
Beneficiary Confusion About Health Insurance Plans 
Previous studies have found Medicare beneficiaries face complex choices when making 
decisions about their health insurance plans. This is due in part to the variety of plans available, 
differences between the plans coverages and costs, and limited time frames for making 
important medical and financial choices. For example, an AARP study assessing older 
consumers skills in making health care choices found many had difficulty in comparing costs 
and benefits of one plan to others.1 
Representatives of beneficiary advocacy groups and the insurance industry stated that 
beneficiaries often are confused and misinformed about various Medicare Supplemental 
Insurance (Medigap) policies, open enrollment periods, and the protections afforded them. 
Often, beneficiaries seek guidance from others to assist them in making informed choices about 
health care options and costs.2 
Educational Efforts 
Historically, the Centers for Medicare & Medicaid Services (CMS) relied heavily upon the 
Social Security Administrations (SSA) over 1,300 field offices to provide individualized 
assistance, counseling, and educational services to beneficiaries in local communities. 
However, since SSA was elevated to an independent agency in April 1995,3 it has eliminated 
these services for Medicare beneficiaries and now provides only limited support.  Primarily, this 
involves initial Medicare enrollment and the replacement of Medicare cards. 
The Secretary of Health and Human Services, in conjunction with CMS, announced plans to 
improve and expand its outreach efforts in order to educate beneficiaries about Medicare and 
the services available to them.  These educational efforts will focus on providing information on 
health care delivery systems and choices available to beneficiaries. This inspection examined 
the performance of SHIP, one such program already in place to provide a broad range of 
national and local information and assistance services to Medicare beneficiaries. 
1 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  The State Health Insurance and Assistance Program 
Congress enacted the Information, Counseling, and Assistance (ICA) program (later renamed 
the State Health Insurance Assistance Program) as part of Omnibus Budget Reconciliation Act 
(OBRA) of 1990, to help alleviate beneficiary confusion in making health plan choices. As part 
of this law, Congress authorized State grants to implement the ICA program. These grants, 
which are administered by CMS, require State grantees to establish or improve upon existing 
health insurance information, counseling, and assistance programs. In addition, grantees are 
required to establish a system of beneficiary referrals to appropriate Federal and State agencies 
for problems related to health insurance coverage (Appendix A). 
The SHIPs exist in 50 States, the District of Columbia, Puerto Rico, and the Virgin Islands. 
Two-thirds of the grantees are located in the State Departments of Aging, while the remainder 
are located in the State Departments of Insurance. State Departments of Insurance are 
responsible for the regulation of insurance companies, including review of insurance policies 
sold and premium costs.  In contrast, the State Departments of Aging are primarily concerned 
with improving the quality of life for the elderly. 
The SHIP Purpose and Functions 
The SHIPs are locally operated programs offering assistance to individuals with questions about 
various health insurance plans and programs, including Medicare.  It functions as a vital 
communication link with beneficiaries and serves to provide in-depth counseling and assistance. 
States carry out these objectives through in-person or telephone counseling, developing and 
distributing written materials, and holding group educational seminars and presentations. 
The SHIP counselors are one of the primary points of contact for beneficiaries and are 
comprised of a large number of volunteers and a small number of salaried employees. Overall, 
28 percent of the SHIP counselors report having previous professional experience in elderly 
advocacy, insurance, social work, or the medical field. 
In addition to the local SHIPs, beneficiaries have national and State sources for obtaining 
information and assistance in the selection of Medicare health coverage.  Currently, such 
services are provided mainly through the CMS toll-free number, the CMS website 
(www.medicare.gov), MCOs, and the applicable State Departments of Aging or Insurance. 
However, these services may not address the local information and referral services sought by 
some beneficiaries. 
The SHIP Funding 
The SHIP base grants averaged about $15 million each year apportioned according to the 
population of beneficiaries residing in a given State.4 Grant funds are designated to support 
information, counseling, and assistance activities relating to Medicare and Medicaid matters, 
Medigap policies, long term care insurance, managed care options, and other health insurance 
information. 
2 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  Non-Renewal of Managed Care Organizations from the Medicare Program 
Over the last 4 years, many MCOs have either withdrawn from the Medicare program or 
reduced their service area, resulting in a large number of beneficiaries changing health plans. 
According to data from CMS, as shown in Table 1, there has been a large number of plans 
leaving the Medicare program in 1999, 2000, and 2001, affecting approximately 2.2 million 
beneficiaries.5 
Table 1 
MCO Non-renewals 1999 - 2002 
MCO Plans in  MCO Plans 
Medicare  MCO Plans  that reduced  Beneficiaries 
Year  program  that withdrew  service area  affected 
1999  346  45  54  407,000 
2000  309  41  58  327,000 
2001  261  65  53  934,000 
2002  1796  22  36  536,000 
Insurance Options for Medicare Beneficiaries 
When MCOs withdraw from Medicare or reduce their service areas, beneficiaries must choose

between Medicare fee-for-service (FFS) or another MCO plan.  Some beneficiaries face

limited choices.  In Calendar Year (CY) 2000, over 158,000 beneficiaries affected by the non-

renewal of an MCO plan could only enroll in Medicare FFS because other MCOs were either

not operating or not accepting new clients in their State.

Beneficiaries switching to FFS may face increased out of pocket expenses for costs often

included in the MCOs benefit packages (e.g., annual deductibles and costs for non-covered

items such as prescription drugs).  Many beneficiaries chose to purchase a Medigap policy to

cover these costs.  These policies, sold by private insurance companies, are regulated by the

States insurance commissions. The OBRA of

1990 established uniform Federal criteria that governs how States regulate the sale of Medigap

policies. The law limits available Medigap polices to 10 standard benefit packages. Further, it

mandates that all plans offer a standard set of benefits and requires that premiums be based on

specific loss ratio standards.7

MCO Non-renewal Notices to Beneficiaries 
When an MCO withdraws or reduces its service area, CMS requires the MCO to notify the 
affected beneficiaries. These notices prominently referred beneficiaries to their local SHIP (toll-
free telephone numbers included), and the CMS national toll-free number if they needed 
additional information and/or counseling services. 
3 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  The CMS can institute annual revisions to the time frames and notices MCOs use to advise the 
public and beneficiaries of their intentions to withdraw from the Medicare program or reduce 
their service areas. 
In CY 2000, CMS required the MCOs to send two notices to the affected beneficiaries: 
1.	 An interim notification letter was sent in July, to inform Medicare beneficiaries 
of the MCOs non-renewal effective the following January 1. This letter 
advised beneficiaries not to take any action until they received a final 
notification letter. 
2.	 A final notification letter of MCO non-renewal was required to be dated and 
sent by October 2.8 This letter officially notified beneficiaries of the MCO non-
renewal effective January 1.  The letter further advised beneficiaries of their 
rights and time frames for selecting alternative Medicare and other health care 
coverage. 
Time Frames to Select Alternative Medicare and Medigap Coverage 
Beneficiaries affected by MCO non-renewals face specific time frames to implement changes to 
their health care coverage. Changes made outside of this period may result in denial of 
coverage for pre-existing conditions and imposition of increased premiums. 
<	 Beneficiaries may enroll in another MCO serving their area within the Special 
Election Period beginning on October 1 and ending on December 31.  They can 
also purchase a Medicare supplement insurance (Medigap) policy before or after 
the termination of their current MCO coverage 
<	 (October 2 - March 4) with guaranteed issue rights.  These rights ensure that the 
Medigap insurer cannot deny a policy, impose waiting periods for coverage, or 
limit coverage for pre-existing medical conditions. If beneficiaries delay purchase 
of a Medigap policy beyond March 4, they lose the guaranteed issue rights 
protections, and the Medigap insurer can impose pre-existing coverage 
restrictions. 
<	 Beneficiaries may elect to enroll in FFS (Original Medicare) as soon as they 
receive the final notice from their MCO. If they choose to enroll in FFS, their 
MCO coverage will terminate on the last day of the month of disenrollment, and 
their Medicare FFS is effective on the 1st day of the following month.  Beneficiaries 
who make no election will automatically be enrolled in FFS effective January 1. 
As part of this process, beneficiaries are informed of their option to purchase a 
Medigap policy to supplement  Medicare FFS coverage.  They are afforded 
guaranteed issue rights for the purchase of Medigap policies beginning with the 
Final Notice of plan termination and ending 63 days after the effective 
disenrollment date. 
4 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  METHODOLOGY 
Our study purpose was to assess the overall effectiveness of SHIPs.  During our 
pre-inspection, CMS officials informed us that the average Medicare beneficiary typically does 
not contact a SHIP because he or she has already made decisions about his or her Medicare 
coverage.  Therefore, we identified periods of significant HMO non-renewal -- a time when all 
affected beneficiaries must change their Medicare coverage -- as a means of selecting a sample 
of Medicare beneficiaries likely to have sought assistance with making choices about their 
Medicare coverage.  We believed it worth examining beneficiaries use of available information 
sources, including SHIPs, 1-800-Medicare, CMS publications, and the Internet, as well as 
SHIPs response to increased workloads brought on by HMO non-renewals. 
We sampled beneficiaries who received notices during CY 2000 that their MCO plan was 
leaving Medicare or reducing its service area effective January 1, 2001.  We believed this focus 
would most likely provide beneficiaries who had recent experience with their local SHIP, and 
consequently, would be able to comment on their level of satisfaction with the services 
received. Further, we believed this sampling method would allow us to examine the impact of 
MCO non-renewals on individual SHIPs performance.  We recognize that beneficiaries or 
care givers may have little reason to contact anyone with questions about their health care 
choices once they have completed their Medicare enrollment process. However, beneficiaries 
facing dramatic changes in their health care plan may be sufficiently motivated to contact 
informed sources, such as SHIP, to explore their health insurance options. 
State Sampling Procedures 
We selected a purposive sample of seven States composed of two groups.  We considered 
both the number of beneficiaries impacted by MCO non-renewals as well as geographic and 
regional differences in selecting the two sample groups. 
Group 1  States with the largest number of beneficiaries impacted by MCO non-
renewals (Florida, New York, Ohio, Pennsylvania, and Texas). 
.  Group 2  States in predominately rural areas with a significant number of 
beneficiaries affected by MCO non-renewals (Arizona and Oregon). 
These States comprise 55 percent of the total beneficiaries impacted by MCO

non-renewals and 63 percent of the beneficiaries who could only enroll in Medicare FFS. 

Since our sample of SHIPs were purposively selected, our findings based on information from

sampled states apply only to the 7 States selected and cannot be generalized to all SHIP

Programs.

5 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  We interviewed seven SHIP program directors and held individual and group discussions with 
78 salaried and volunteer counselors in two counties within each of the sample States. We 
selected the counties based on factors such as the total population affected, beneficiaries who 
could only enroll in Medicare FFS, and a mix of predominately urban and rural populations. 
The sample counties comprise 22 percent of the total beneficiaries impacted by MCO non-
renewals and 19 percent of the beneficiaries who could only enroll in Medicare FFS.  We 
assessed the SHIPs ability to provide effective services to Medicare beneficiaries impacted by 
MCO non-renewals. As part of this process, we requested monthly SHIP workload data for 
the two sample counties in each of the seven States. 
Beneficiary Sampling Procedures 
We conducted a mail survey with a national stratified random sample of 800 Medicare 
beneficiaries who received notice of their MCO non-renewal in CY 2000, and we received 
responses from 365 (46 percent). To select our sample, we used CMSs list of MCOs that 
withdrew from Medicare or reduced their service area effective January 1, 2001. We then 
used CMSs Group Health Plan master file to identify beneficiaries who disenrolled from that 
list of MCOs during the period July 1 through December 31, 2000. Finally, we used CMSs 
Enrollment Data Base to exclude those beneficiaries who had died since the non-renewal of 
their MCO. We stratified the sample into five strata by State to assure that we obtained 
representative national responses, responses from beneficiaries residing in the sample States 
(including predominately rural States), and responses from beneficiaries residing in States that 
lacked another managed care plan.  The sample design is shown in Table 2. 
Table 2 
Beneficiary Sample Design 
Universe 
Sample  (Affected  Universe 
Strata  Sample States  Size  Enrollees)  Percent 
1  FL, NY, OH, PA, TX  300  488,063  52.3% 
2  AZ  100  24,327  2.6% 
3  OR  100  5,767  .6% 
AL, ME, NH, VA (most or all 
beneficiaries have no other MCO 
4
 available)  100  19,278  2.1% 
5  All other affected States  200  396,252  42.4% 
Total  800  933,687  100% 
The data collection instruments consisted of predominately closed-ended questions and 
included both the national and State names used for the SHIP in the beneficiaries locale. 
6 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  The information obtained was encoded into a relational data base for analysis.  The estimates 
for the beneficiary survey are weighted in accordance with the sample design.  Percentages are 
reported at the 95 percent confidence interval (Appendix B). 
When surveys are used to collect data, the results may be biased if non-respondents differ from 
respondents. We tested for non-respondent bias among sample beneficiaries.  The variables 
used for this analysis were age and gender. The results of this analysis showed no statistically 
significant differences between respondents and non-respondents for the two variables tested. 
Other Activities 
We attended a national SHIP conference to gain a national perspective on the issues 
confronting the program. We contacted key CMS staff responsible for administering the State 
Health Insurance Assistance Program grants. Further, we conducted personal or telephone 
discussions with key staff from industry and advocacy groups such as the Health Insurance 
Association of America, National Association of Insurance Commissioners, AARP, Center for 
Medicare Advocacy, National Senior Citizen Law Center, and the United Seniors Health 
Cooperative.  We also reviewed ICA legislation, grant requirements for SHIP grantees, 
Medigap insurance legislation, various regulations, and the previous work conducted by the 
Office of Inspector General, General Accounting Office, and others. 
We conducted this inspection in accordance with the Quality Standards for Inspections 
issued by the Presidents Council on Integrity and Efficiency. 
7 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  F I N D I N G S  
The SHIPs fulfill a valuable role by providing Medicare beneficiaries personal assistance with 
the selection of Medicare and Medigap Insurance coverage.  Further, utilizing other revenue 
sources, some SHIPs have expanded their role to provide comprehensive one-stop shop 
informational, counseling, and referral services to other local, State, and Federal programs, 
such as Medicaid, housing assistance, veterans coverage and benefits, utility assistance, and 
property tax abatement. 
The SHIPs in our survey are located either in the Department of Aging (five States), or the 
Department of Insurance (two States). Regardless of their agency location, SHIPs have 
fostered strong working relationships with social service agencies, community health centers, 
and other non-governmental agencies in their community to enrich the delivery of service to 
beneficiaries. This interagency coordination allows SHIPs the flexibility to share information 
and resource materials freely. 
The SHIPs are uniquely positioned to provide personal locally-oriented counseling and 
assistance services with trained counselors who often have similar backgrounds, cultures, and 
experiences as the beneficiaries they serve.  The SHIPs are part of CMS comprehensive 
information and counseling services, which include publications, the Internet, and national toll-
free number counselors.  These services are designed to meet the diverse needs of Medicare 
beneficiaries and their families.  This is especially important during periods of MCO non-
renewals when beneficiaries and families are faced with making important and complex health 
care choices in a short time period. 
Beneficiaries in the Sample States Sought Assistance in 
Greater Numbers During Periods of MCO Non-renewals 
Generally, the sampled SHIPs experienced increased telephone call volumes during the fall of 
CY 2000 after beneficiaries received the notices of the MCO non-renewals. Ohio, Oregon, 
and Pennsylvania could only provide State-wide call volumes, while Arizona, New York, and 
Texas furnished this information for the sample counties. Florida could not provide this 
information, as they maintain only semi-annual reports of State-wide information. 
Data from three sampled locations (AZ, PA, and TX) showed calls dramatically increased 
during the fall of CY 2000, corresponding to the period when beneficiaries received the notices 
of the MCO non-renewals.  Two of the sampled locations (NY and OH) showed that calls also 
increased, although less sharply, during this same period. While Oregons data showed 
virtually no increase, the SHIP Director informed us they were moving to a new telephone 
system, which may have impacted the completeness and accuracy of this information. 
8 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  The increase in workload is further supported by SHIP directors and counselors. The seven

directors reported increases in workload during the CY 2000 MCO non-renewal period. 

One-half of the directors believe that the increased activity adversely affected the SHIPs ability

to assist beneficiaries.  These directors reported that this increased workload led to delays in

answering beneficiary telephone calls, responding to mail inquiries, scheduling meetings with

beneficiaries, holding speaking engagements, and administrative duties.

Similarly, over 92 percent of the counselors in the seven sample States reported an increase in

workload during the CY 2000 MCO non-renewal period.  Of the 

78 counselors that responded to our survey, 72 said their workload increased. Most of the

counselors stated they experienced an increase in the number of telephone calls. Further, one-

third of the counselors reported this increased workload adversely affected their ability to assist

beneficiaries, evidenced by delays in answering these calls.

We obtained CMSs toll-free number call volume data for CY 2000 (automated telephone

system and those handled by a customer service representative) because this service also

provides information and counseling to beneficiaries.  Similar to SHIPs, these data showed

increases in call volume corresponding to the timing of beneficiaries receipt of non-renewal

notices.

The SHIP directors and counselors described beneficiaries seeking their assistance as angry,

confused, and overwhelmed when initially contacting SHIP about the non-renewal of their

managed care plan.  They cited beneficiary concerns about the loss of their MCO plan, the

frustration of facing another decision about choosing appropriate health care coverage, and

confusion about the number and complexity of available health care choices.

The SHIPs Target Their Program to Meet the Needs of the 
Local Community 
The SHIP directors and counselors believe they must provide information and referral services 
to other local, State, and Federal programs in order to meet the needs of their clients, many of 
whom are on limited fixed incomes. The SHIPs are now the primary local source for 
comprehensive Medicare information, counseling, and assistance since SSA no longer provides 
this information for Medicare clients. 
The SHIP is an important segment of the CMSs overall strategy to offer comprehensive 
national and local information and referral services to beneficiaries through a variety of 
complementary sources. This program, largely staffed by retired volunteers, provides wide-
ranging personal counseling, information, and referral services to meet the local needs of their 
clients.  In CY 2000, SHIPs contacted either in person or by telephone approximately 2.8 
million clients9 at a total cost of $18 million (combined basic and supplemental grants)10 or 
$6.43 per contact. By way of comparison, the CMS toll-free number received 3.7 million 
telephone calls (2.3 million answered by staff and 
9 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  1.3 million answered by its automated system) at a total cost of $30.7 million or $8.30 per call 
during this same period.11 These two programs complement each other to provide 
comprehensive information and referral services suited to the needs of Medicare beneficiaries. 
The SHIPs Use Comprehensive Approaches to Assist Clients 
The SHIP directors and counselors use a variety of initiatives to meet the unique needs of their 
clients.  Frequently, this assistance involves programs other than Medicare or Medicaid as 
clients often lack knowledge of Federal, State, and local programs designed to meet their 
needs. One counselor told of the assistance provided to clients with past military service. 
Many of these individuals are on limited fixed incomes and have difficulty paying 
for needed medical care. They are often not aware of a Department of 
Veterans Affairs program which provides health care and prescription drugs for 
veterans who meet the programs eligibility requirements. 
Other counselors mentioned assisting clients faced with large monthly prescription drug bills 
who are on fixed incomes and have limited or no insurance coverage. To address these needs, 
many SHIPs provide information on those pharmaceutical companies offering no-cost drug 
programs. The SHIPs also provide referrals to Medicaid, SSA (for Supplemental Security 
Income), and programs for utility assistance, housing assistance, nutrition, property tax 
abatement, and other local services for aged or disabled clients. 
One counselor summarized this approach when he stated, 
We need to help seniors who need Medigap insurance - to find in their budget 
the means to buy it. Only by providing information on other ways (to save 
money), such as utility assistance, can many of our clients find the dollars they 
need. 
We Use All Available Resources to Reach Medicare Beneficiaries 
All directors and counselors described various innovative tools they use to ensure they reach all 
eligible individuals.  They use meetings and town hall question and answer forums to present 
information to large numbers of clients in a short time period. This method of outreach is 
particularly useful during the periods of MCO non-renewals when many beneficiaries are 
seeking information and assistance about their health care options. 
During our visits, we noted one innovative and creative method for sharing information with 
Medicare beneficiaries.  The Ohio SHIP used a video tape as a vehicle for standardizing the 
information presented at group meetings.  This video, written and produced by their staff, 
explained complex Medicare options using the concept of the television sitcom Mels Diner. 
Customers at the diner commented about the new daily menu specials, which highlighted 
available Medicare and Medigap choices.  This 
10 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  information was reinforced by providing copies of the menu to the audience during the 
presentation, followed by a question and answer period. 
The directors and counselors described the varying unique needs of the community such as 
cultural differences, language barriers, special needs for the elderly, disabled and infirm, and 
special groups including military retirees and family members. In a further effort to reach 
diverse and special needs clients, SHIPs cited their use of: 
<  interpreters during telephone calls and presentations, 
<  TDD to facilitate telephone counseling for the hearing impaired, 
<  braille and large print publications for the visually impaired, 
<  counselors recruited from other cultures to address the needs of clients, 
<  counseling sites in ethnic neighborhoods and in locations where beneficiaries live or 
congregate, especially to meet the needs of frail elders (e.g., independent living 
centers, nutrition sites, kidney dialysis centers, etc.), 
<  CMS and SHIP brochures translated in other language formats (e.g., Spanish, 
Chinese, Korean), 
<  counselors in remote areas of the State to reach these populations, and 
<  radio and televison talk and news programs. 
Only a small number of beneficiaries whom we surveyed used SHIP services. They were 
satisfied and rated the quality of the services as average or above. Most users stated they were 
able to obtain the information needed to make their health care decisions. The small number 
who did not obtain all needed information raised issues that were beyond the scope of SHIP 
information and referral services. 
The SHIP Counselors Believe They Are Prepared to Respond 
to Most Beneficiaries Concerns, Yet Express Frustration with 
the Timeliness of MCO Non-renewal Information 
Over One-quarter of the Counselors Have Previous Related Experience 
Overall, 28 percent of the SHIP counselors report having previous professional experience in 
elderly advocacy, insurance, social work, or the medical field.  These counselors, most of 
whom are volunteers, apply their previous professional experience and skills towards 
interpreting legal documents, laws and regulations, and governmental policies. Those with 
medical experience are able to interpret medical terminology. 
Initial and On-going Training was Helpful 
Seventy-six percent of the SHIP counselors believe the training they received prepared them to 
respond to concerns and questions beneficiaries may have about their health care coverage. 
Directors reported that all counselors are required to attend initial and ongoing training and 
training in managed care organizations non-renewals.  The types of SHIP counselor training 
most often included topics such as Medicare, Medicaid, Medigap eligibility and coverage, and 
Medicare MCO non-renewals. 
11 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  Specific Information on MCO Non-renewals is Untimely 
While 83 percent of SHIP counselors received specific information on managed care non-

renewals, only 67 percent believe the information was provided when it was needed.  In

addition, only 53 percent reported that information was provided prior to the release of the

initial MCO non-renewal notice to the beneficiaries.  Counselors noted that the 

non-renewal information was provided too late, and the information material did not sufficiently

cover topics to prepare them for the on-slaught of calls from beneficiaries. One of the

counselors stated that by the time official information was received (August 2000) the cat was

out of the bag. The media had disseminated information about the MCO non-renewals before

the plans official notification to CMS.

Beneficiaries Are Interested in SHIP Services, Yet Most Were 
Unaware of the Program 
Beneficiaries are Interested in Receiving SHIP Services 
Because beneficiaries who receive notices of non-renewal of their MCO plans are faced with 
making choices regarding their Medicare coverage, we asked beneficiaries to identify the 
services they would either use or request when confronted with such decisions. Our goal in 
asking these questions was to determine whether SHIPs were providing the services 
beneficiaries are most interested in receiving.  While similar services are furnished through the 
1-800-Medicare number and the Internet, only SHIP is able to provide the face-to-face 
personal assistance many beneficiaries need.  As shown in Table 4, those services beneficiaries 
identified most frequently correspond to those provided by SHIP.  The total of beneficiary 
responses exceeds 100 percent because many selected more than one service. 
Table 4 
Assistance Beneficiaries Would Seek from SHIPs 
Percentage of 
Most Frequently Identified Service  Beneficiaries 
Information about other insurance available to Medicare 
beneficiaries in the State  41%

Assistance in choosing between traditional Medicare fee-for-
service and HMO plans  40%

Comparative information about available Medigap policies 
34%

Most Beneficiaries Remain Unaware of SHIP 
Generally, most beneficiaries are unaware of SHIP information and counseling services. Of the 
365 beneficiaries who responded to our survey, which included both the national and State 
names used for the SHIP in the beneficiaries locale: 
12 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  <  87 percent stated they were not aware of the program; and 
<  13 percent stated they knew about the SHIP program (of which 37.5 percent 
stated they had contacted and used SHIP services).12 
Using aggregated data from national SHIP workload for CY 2000 (Appendix C), we found 
that approximately 2.8 million (7 percent) of Medicare enrollees, family, or care givers 
contacted SHIP.  Nationally, there are approximately 40 million Americans enrolled in the 
Medicare program. 
Beneficiaries Consult Other Sources to Obtain Needed Information 
Beneficiaries reported using a variety of other sources to obtain health care information, some 
of which may be less reliable or subject to bias: 
<  Forty-two percent listed medical sources such as physicians or managed care plans;

<  Thirty-seven percent listed family or friends;

<  Fifteen percent listed Federal government agencies such as Medicare or Social

Security; and 
<  Seven percent listed State government agencies such as State Departments of Aging 
and/or State Departments of Insurance. 
Despite CMS Publicizing SHIP Services, Beneficiaries Remain Unaware 
Eighty seven percent of the randomly selected beneficiaries we contacted stated they were

unaware of the SHIP program despite CMS efforts to publicize these services. The CMS

recently mailed publications designed to inform beneficiaries about available health care

services, including SHIPs. These publications include a listing of contacts for SHIP and other

agencies that can provide assistance and counseling as well as the national 

1-800-Medicare toll-free number.  Further, CMS has an extensive Internet presence with

detailed information on SHIPs, Medigap, and links to State Departments of Aging, Insurance,

and other offices. 

Beneficiaries Find Certain Information Sources Particularly Useful 
Based on responses from beneficiaries, CMS is using appropriate information sources to 
publicize program information.  Table 5, on the following page, identifies the sources most 
preferred.  The total responses listed exceed 100 percent because many beneficiaries 
expressed more than one information source. 
13 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  Table 5 
Information Sources Beneficiaries Consider Effective 
Percentage of 
Information Source  Beneficiaries 
Medicare & You handbook  62% 
Annual Medicare letter from CMS  45% 
Advertisements in publications such as AARP  40% 
14 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  R E C O M M E N D A T I O N S 
The CMS has implemented a broad-based initiative, the National Medicare Beneficiary 
Education Program, to educate beneficiaries about the Medicare program. The programs 
educational sources include the toll-free number, publications, the Internet, forums, advertising, 
and SHIPs, just to name a few.  The SHIPs fulfill an important role by economically providing 
personal Medicare counseling services through volunteers, many of whom are also Medicare 
beneficiaries. The CMS educational initiatives complement each other and each serves a role in 
helping to assure beneficiaries can obtain needed information and referrals in the manner that 
best suits their needs. 
The CMSs own data indicate a significant number of beneficiaries seek individual counseling 
including the localized services SHIPs provide. Historically, such individualized services were 
provided by Social Security field offices, but this is mostly no longer true. 
We, therefore, offer the following recommendations to improve comprehensive beneficiary 
information and assistance services, including those provided by SHIPs. 
As Part of CMSs Beneficiary Education Initiative, Review the 
Appropriate Role(s) for Each Information and Referral Source 
to Assure Beneficiaries Needs Are Being Met 
While CMS is utilizing a variety of sources, including SHIPs, to address the information and 
referral needs of beneficiaries, it is important to reassess the appropriate role(s) of each source 
to assure its effectiveness. Such a process will help ensure that CMSs information and referral 
sources are comprehensive and adequately prepared and supported to meet the diverse and 
specific interactive needs of Medicare beneficiaries, especially those impacted by the non-
renewal of MCOs. 
Explore Ways to Appropriately Increase Knowledge of SHIPs, 
Their Function, and Their Local Telephone Number in CMS 
Publications or Through Other Methods 
CMS could consider the following, or other options, to carry out the recommendations 
<	 Modify existing Publications such as Medicare & You and Guide to Health 
Insurance for People with Medicare to relocate the index and descriptions of major 
beneficiary assistance numbers, including an index to local SHIP numbers, to the 
beginning of these publications, similar to the protocol used by the telephone 
companies for emergency numbers.  This will help the beneficiary to quickly find 
needed assistance. 
15 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  <	 Mail an annual reminder notice to beneficiaries about CMS customer services, 
including the local counseling and assistance services provided by SHIPs. To 
reinforce this message, the notice could include a low-cost reminder item such as a 
refrigerator magnet with the 1-800-Medicare Number and the Medicare.gov website 
to facilitate beneficiaries ability to locate needed information and referral services. 
<	 Publish Medicare information and assistance numbers, including SHIP numbers, in 
sources that beneficiaries consult, such as AARP publications and the telephone 
company Yellow and Blue Pages under Medicare. 
<	 Run national public service announcements and paid commercial advertisements on 
radio and television during periods when Medicare MCOs are withdrawing or 
reducing their service areas. As part of this advertising campaign, include information 
on the Medicare toll-free number and the SHIP program. 
Coordinate Closely with SHIPs To Ensure Timely 
Dissemination of MCO Non-renewal Information 
The CMS should continue to work closely with SHIPs to develop national and local 
informational materials on MCO non-renewals. Essential aspects of such counselor materials 
should include information about 
<	 plans that are leaving the Medicare program, or those who are reducing their service 
areas, 
<  revisions to MCO coverages, and 
<  available Medigap policies. 
The CMS should make every effort to ensure that SHIPs are made aware of MCO non-
renewals prior to information being made available to the general public. The CMS also may 
want to work with SHIPs to ensure that non-renewal information is shared as quickly and as 
efficiently as possible with all counselors. 
AGENCY COMMENTS 
In its written response to the report, CMS addressed the three report recommendations as a 
single recommendation. In essence, CMS agreed with the last recommendation but not the first 
two. The CMS believes that exploring the appropriate role for all information and referral 
sources goes beyond the scope of the study.  The CMS also expressed concern with our 
recommendation to modify their publications and notices, citing the possibility of inappropriate 
beneficiary contacts to SHIPs. 
The overall effectiveness of SHIPs, in the context of all available information sources, was 
within the scope of our study. We used Medicare beneficiaries experiences with HMO non-
renewals not to limit the scope of our study, but rather to provide a means to understand how 
the SHIPs work, how beneficiaries make use of all the information 
16 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  sources available to them, and how SHIPs assist beneficiaries with making choices regarding 
their Medicare coverage.  We clarified this in our methodology section. 
We found that the SHIPs are uniquely positioned to provide local information and referral 
services to diverse groups of Medicare beneficiaries, irrespective of the information needs of 
the beneficiaries.  Given that CMS is implementing a broad-based initiative to educate 
beneficiaries about the Medicare program through a variety of sources and given that 
beneficiaries are seeking informational sources when faced with non-renewal of MCOs, we 
believe it is an appropriate time to review the role of the various information and referral 
sources. 
In addition, we continue to recommend modification to notices and publications to prominently 
display SHIP as well as other CMS beneficiary information, since 87 percent of the 
beneficiaries we contacted were not aware of the SHIP program. 
We have made revisions to the report based on CMSs comments. The full text of their 
comments is contained in Appendix D. 
17 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  E N D N O T E S  
1.	 Judith Hibbard, Dr. P.H., Older Consumers Skill in Using Comparative Data to Inform Health Plan Choice: A 
Preliminary Assessment, Public Policy Institute #2000-14, dated September 2000. 
2.	 Judith Hibbard, Dr. P.H., An Assessment of Medicare Beneficiaries Understanding of the Difference Between 
the Traditional Medicare Program and HMOs, Public Policy Institute, AARP # 9805, dated June 1998. 
3.  Social Security Independence and Program Improvements Act of 1994, (Public Law 103-296). 
4.  CMS memorandum, State Health Insurance Assistance Program (SHIP) Funding for FY 2000. 
5.	 Center for Medicare and Medicaid Services Internet Web site (http://www.hcfa.gov) Fact Sheets, released 
September 2001, June 2000, and July 15, 1999. 
6.  Centers for Medicare and Medicaid Services Fact Sheet, September 2001. Note: These figures are preliminary, as 
managed care plans had until October 2, 2001 to notify CMS of their plans to withdraw or reduce their service 
areas in 2002. 
7.	 Loss ratio standards are calculated on the basis of incurred claims experienced or incurred health care expenses 
where coverage is provided by a health maintenance organization on a service rather than reimbursement basis 
and earned premiums for the period. 
8.  This letter is required by Title 42, Code of Federal Regulations  422.506(2)(ii). 
9.	 To determine the Medicare population who used SHIPs during calendar year 2000, we used CMSs National 
Performance Report (NPR) column entitled Total Individual Client Contacts (Appendix C). For NPR reporting 
period 4/1/00-9/27/00, we used the total SHIP contact figure. However, for reporting periods 9/28/99 - 3/31/00 
and 9/28/00 - 3/31/01, we obtained the 6 month contact figures and averaged each of these to establish the 
approximate 3 month total for the months in CY 2000. The resulting totals were aggregated to obtain an 
approximation of total SHIP contacts for CY 2000 (2,768,079). We then divided these contacts by the total 
number of Medicare beneficiaries (40 million) and determined that approximately 7 percent of the beneficiaries 
contacted SHIPs during CY 2000. 
10.  CMS, Center for Beneficiary Choices Data, Dated August 1, 2001. 
11.  CMS, Center for Beneficiary Choices Data, Dated July 26, 2001. 
12.  This percentage was not weighted due to the small number of respondents per strata. 
18 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  APPENDIX A 
Beneficiary Counseling and Assistance Grants 
To be eligible for a grant under Public Law 101-508, States must: 
A.	 establish or improve upon a health insurance information, counseling, and assistance program that provides 
counseling and assistance to eligible individuals in need of health insurance information; 
B.	 establish a system of referral to appropriate Federal or State departments or agencies for assistance with 
problems related to health insurance coverage (including legal problems), as determined by CMS; 
C.	 provide for a sufficient number of staff positions (including volunteer positions) necessary to provide the 
services of the health insurance information, counseling, and assistance program; 
D.	 provide assurances that staff members (including volunteer staff members) of the health insurance information, 
counseling, and assistance program have no conflict of interest in providing the counseling; 
E.  provide for the collection and dissemination of timely and accurate health care information to staff members; 
F.  provide for training programs for staff members (including volunteer staff members); 
G.	 provide for the coordination of the exchange of health insurance information between the staff of departments 
and agencies of the State government and the staff of the health insurance information, counseling, and 
assistance program; 
H.	 make recommendations concerning consumer issues and complaints related to the provision of health care to 
agencies and departments of the State government and the Federal government responsible for providing or 
regulating health insurance; 
I.	 establish an outreach program to provide health insurance information and counseling described in 
subparagraph (A) and the referrals described in subparagraph (B) to eligible individuals; and 
J.	 demonstrate, to the satisfaction of CMS, an ability to provide counseling and assistance required under this 
Public Law. 
19 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  APPENDIX B 
Estimates and Confidence Intervals 
for Beneficiary Stratified Sample 
The following table summarizes at the 95 percent confidence intervals for the beneficiary responses to our 
survey that are presented in this report. 
Weighted  95% 
Error Percentage  Confidence 
Beneficiary Survey Issue  Interval 
Beneficiary Knowledge and Use of SHIP 
Had previous knowledge of SHIP  15%  +/- 4.6% 
Contacted SHIP  18%1  N/A 
Not aware of SHIP  85%  +/- 4.6% 
Beneficiary Sources of Health Insurance Information 
Medical sources (physician/managed care organization) 
42%  +/- 6.3% 
Family/friends  37%  +/- 6.2% 
Federal government (Medicare/Social Security)  15%  +/- 4.6% 
State government (County or State Aging Services Office/State 
Insurance Department)  7%  +/- 3.4% 
Beneficiaries Ability to Obtain Information to Make Health Insurance Decisions 
Beneficiaries who were aware of SHIP and were able to obtain 
needed information  92%  +/- 6.0% 
Beneficiaries who were not aware of SHIP and were able to 
obtain needed information  73%  +/- 6.0% 
Beneficiary Listing of Effective Information Sources 
Medicare & You handbook  62%  +/- 6.2% 
Annual Notice from CMS  45%  +/- 6.4% 
Advertisement in publications such as AARP  40%  +/- 6.2% 
1 This number is not weighted 
20 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  APPENDIX C 
National Performance Report - SHIPs

Counseling and Presentation Contacts

October 1999 - September 2001

21 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  NPR FOR PERIOD 9/28/99-3/31/00  NPR FOR PERIOD 4/1/00-9/27/00  NPR FOR PERIOD 9/28/00-3/31/01 
Contacts  Contacts  Attendees at  Total  Contacts  Contacts  Attendees at  Total  Contacts  Contacts  Attendees at  Total 
in  by  Educational  SHIP  in  by  Educational  SHIP  in  by  Educational  SHIP Contacts 
State  Person  Telephone  Events  Contacts  Person  Telephone  Events  Contacts  Person  Telephone  Events 
Alabama  1,410  5,131  8,026  14,567  1,484  6,182  13,738  21,404  1,512  7,417  11,693  20,622 
Alaska  381  2,661  1,558  4,600  411  1,100  700  2,211  411  1,100  700  2,211 
Arizona  12,169  15,046  6,790  34,005  1,732  9,233  20,598  31,563  1,902  15,021  14,423  31,346 
Arkansas  301  7,675  407  8,383  715  9,073  1,721  11,509  413  6,451  1,275  8,139 
California  11,114  8,504  31,347  50,965  10,484  9,863  30,346  50,693  10,534  12,501  33,756  56,791 
Colorado  2,006  8,716  9,251  19,973  2520  7450  4210  14,180  2,166  8,804  5,999  16,969 
Connecticut  4,452  18,069  6,106  28,627  4,297  19,101  6,322  29,720  4,983  16,069  10,583  31,635 
Delaware  89  2,567  325  2,981  115  2,825  295  3,235  193  3,908  20  4,121 
D.C.  72  1,012  645  1,729  64  1,010  1,290  2,364  71  1,382  640  2,093 
Florida  4,000  9,715  8,344  22,059  4,364  8,572  15,936  28,872  2,137  11,793  8,983  22,913 
Georgia  411  4,133  6,791  11,335  193  2183  302954  305,330  193  2,183  302,954  305,330 
Hawaii  8  1,479  160  1,647  37  1,247  20,470  21,754  66  1,069  6,248  7,383 
Idaho  2,551  10,694  6,555  19,800  2,970  13,712  6,902  23,584  7,524  23,099  17,250  47,873 
Illinois  9,199  15,040  5,107  29,346  9,706  15,829  26,487  52,022  7,965  17,152  5,065  30,182 
Indiana  954  9,131  1,791  11,876  874  16,909  13,359  31,142  874  16,909  13,359  31,142 
Iowa  2,214  4,436  1,747  8,397  3,278  4,740  5,691  13,709  2,285  4,469  4,292  11,046 
Kansas  1,101  2,948  1,657  5,706  1,725  4,185  1,311  7,221  1,725  4,185  1,311  7,221 
Kentucky  3,875  3,044  2,589  9,508  3,294  3,787  10,343  17,424  2,471  3,251  9,930  15,652 
Louisiana  320  7,718  2,807  10,845  330  5,618  4,179  10,127  307  4,380  2,437  7,124 
Maine  2,666  7,263  2,645  12,574  2,687  7,142  5,401  15,230  1,253  5,374  3,286  9,913 
Maryland  2,577  10,387  6,911  19,875  3,322  14,218  12816  30,356  2,813  15,664  11,094  29,571 
Massachusetts  5,677  16,091  9,731  31,499  5,295  12,359  2,331  19,985  6,658  13,590  16,341  36,589 
Michigan  1,427  10,197  6,028  17,652  2,174  6,321  13,595  22,090  1,698  4,470  14,536  20,704 
Minnesota  3,070  14,520  8,464  26,054  2,676  12,790  9,506  24,972  2,791  13,290  6,736  22,817 
Mississippi  380  1,256  102,684  104,320  599  2,696  107,295  110,590  949  3,935  111,994  116,878 
Missouri  295  3,236  1,406  4,937  114  2,538  4,254  6,906  77  3,215  3,894  7,186 
Montana  1,620  1,010  1,337  3,967  3,818  3,049  2,858  9,725  1,144  1,520  236  2,900 
Nebraska  3,162  957  988  5,107  751  2,449  1,334  4,534  479  2,338  1,012  3,829  NPR FOR PERIOD 9/28/99-3/31/00  NPR FOR PERIOD 4/1/00-9/27/00  NPR FOR PERIOD 9/28/00-3/31/01 
Contacts  Contacts  Attendees at  Total  Contacts  Contacts  Attendees at  Total  Contacts  Contacts  Attendees at  Total 
in  by  Educational  SHIP  in  by  Educational  SHIP  in  by  Educational  SHIP Contacts 
State  Person  Telephone  Events  Contacts  Person  Telephone  Events  Contacts  Person  Telephone  Events 
Nevada  13,480  5,493  1,828  20,801  3,280  5,046  368  8,694  5,470  3,545  1,525  10,540 
N. Hampshire  647  4,095  2,700  7,442  834  1,154  1,675  3,663  811  1,958  410  3,179 
New Jersey  8,635  36,829  5,185  50,649  8,271  19,560  7,059  34,890  6,799  24,607  6,319  37,725 
New Mexico  4,211  3,249  1,441  8,901  4,320  5,237  4,930  14,487  2,772  2,155  1,439  6,366 
New York  8,420  16,861  20,315  45,596  7,805  18,384  15,629  41,818  8,268  20,044  17,934  46,246 
N. Carolina  2,367  25,999  4,819  33,185  2,058  11,421  14,231  27,710  3,137  13,299  1,918  18,354 
N. Dakota  458  488  215  1,161  436  463  1,672  2,571  493  406  165  1,064 
Ohio  24,748  20,797  256,446  301,991  3,371  17,719  76,155  97,245  3,432  20,105  15,791  39,328 
Oklahoma  63  7,722  2,510  10,295  319  9,450  4,513  14,282  39  8,371  641  9,051 
Oregon  756  6,796  1,705  9,257  499  5,188  1,374  7,061  717  4,482  553  5,752 
Pennsylvania  4,967  30,281  16,795  52,043  8,764  43,688  38,982  91,434  8,042  29,520  25,190  62,752 
Puerto Rico  1,744  1,238  1,836  4,818  1,666  1,062  381  3,109  0 
Rhode Island  1,734  2,400  3,893  8,027  1,294  2,283  3,136  6,713  2,001  957  2,001  4,959 
S. Carolina  86  1,854  226  2,166  74  1,929  1,751  3,754  43  2,970  2,031  5,044 
S. Dakota  620  1,153  339  2,112  1,109  1,377  0  2,486  369  884  2,886  4,139 
Tennessee  700  11,184  3,380  15,264  524  12,051  2,007  14,582  637  12,290  2,119  15,046 
Texas  2,529  30,330  17,096  49,955  3,112  31,833  28,212  63,157  2,368  38,125  11,456  51,949 
Utah  649  4,113  7,158  11,920  524  986  11,390  12,900  615  2,015  3,582  6,212 
Vermont  5,930  8,480  1,717  16,127  241  1,365  262  1,868  5,188  12,916  3,503  21,607 
Virginia  963  3,851  4,806  9,620  1,131  4,129  7,424  12,684  1,053  4,739  7,712  13,504 
Virgin Islands  112  272  907  1,291  478  525  1,425  2,428  478  525  1,425  2,428 
Washington  19,156  3,637  8,719  31,512  16,533  32,818  9,969  59,320  23,455  32,316  14,381  70,152 
W. Virginia  3,301  3,245  1,886  8,432  2,416  1,848  1,775  6,039  2,882  3,606  2,704  9,192 
Wisconsin  15  4,797  819  5,631  255  5,173  6,114  11,542  331  6,535  3,162  10,028 
Wyoming  4,081  470  319  4,870  3,788  295  295  4,378  5,644  425 1,926  7,995 
Total  187,873  438,270  609,257  1,220,833  143,131  441,165  886,971  1,471,267  150,638  471,334  750,820  1,372,792  APPENDIX D 
Agency Comments

24 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  DEPARTMENT OF HEALTH & HUMAN SERVICES  Centers for Medicare & Medicaid Services 
Administrator 
Washington, DC 20201 
DATE:  DEC 17 2001 
TO:	 Janet Rehnquist 
Inspector General 
FROM:	 Thomas A. Scully 
Administrator 
SUBJECT:  Office of Inspector General (OIG) Draft Report: State Health Insurance 
Assistance Program: Assistance to Beneficiaries Affected by Medicare 
Managed Care Withdrawals (OEI-07-00-00580) 
Thank you for the opportunity to comment on the above-referenced report. In general, 
the report adequately describes the unique contribution State Health Insurance Assistance 
Programs (SHIP) provide and how they fit within the Centers for Medicare & Medicaid 
Service's (CMS) communication program. We appreciate OIG's suggestions and plan to 
improve access to non-renewal information in a fashion that will better assist SHIPs in fulfilling 
their mission. 
However, there are sections of the report that could benefit from the inclusion of 
additional information. Up until page 12, the report is consistent and easy to follow. At 
that point, there appears to be a change in the findings presented, moving towards 
beneficiary assistance in general. For example, in the section titled "Beneficiaries are 
Interested in Receiving SHIP Services," the first sentence refers to "decisions about their 
Medicare coverage." This appears to be a departure from the focus on "assistance 
required for dealing with Medicare managed care plan withdrawals." It is unclear 
whether this approach reflects answers to questions that were not specific to the topic, or 
whether there was an attempt to generalize the findings. This issue needs to be clarified, 
and perhaps the text needs to be revised to stay on topic or to explain why there is a shift 
in focus at this point in the report. 
We thank OIG for its efforts in this inspection and look forward to working with OIG in 
the future. With regard to the specific OIG recommendation, our comments are as 
follows: 
25 
SHIP: Assistance to Beneficiaries  OEI-07-00-00580  -2 

OIG Recommendation

CMS should review the appropriate role(s) for each information and referral source to assure

beneficiaries' needs are being met; modify their publications and notices to emphasize the

availability of local counseling services; and, continue to coordinate 

closely with SHIPs to ensure the timely dissemination of managed care plan withdrawal

information. 

CMS Response 
We agree with OIG and plan to improve access to non-renewal information in a fashion that 
helps SHIPs fulfill their mission. However, as we have mentioned above, we believe OIG has 
gone beyond the scope of this study to delve into a full range of CMS beneficiary education 
activities not necessarily relating to SHIP and managed care plan non-renewals. Regarding the 
second part of the recommendation to modify publications, we suggest it should be revised to 
state "Explore ways to appropriately increase knowledge of SHIPs, their function, and their 
local phone number in CMS publications." The CMS is concerned that modifying major 
publications would result in many inappropriate calls being placed to Medicare agents and 
partners. We currently have different types of organizations that provide distinct help to 
beneficiaries, and these are listed in the Medicare & You handbook. 
Regarding the last part of the recommendation, in the context of Medicare managed care non-

renewals we are not certain that the publications cited are necessarily a critical 

source of information. Timely managed care non-renewal information comes in the final

notification letter, which provides specific information about options that beneficiaries have

when faced with the non-renewal of their managed care organization (MCO). 

Given this, it would be helpful for OIG to offer recommendations on how this notice might be

better used to communicate the availability of SHIP assistance in this specific situation and how

to improve the timeliness and accuracy of information disseminated to SHIP counselors.