Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

JANET REHNQUIST 

Inspector General 

FEBRUARY 2002 

OEI-07-00-00580 

State Health Insurance 

Assistance Program 

Assistance to Beneficiaries 
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/ 
EXECUTIVE SUMMARY 

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 nonrenewal of their managed care plan. 

SHIP: Assistance to Beneficiaries i 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 program’s 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 CMS’s own data indicate a significant number of beneficiaries seek individual counseling 

including the localized services SHIPs provide. Historically, such 

SHIP: Assistance to Beneficiaries ii 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 nonrenewals 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 CMS’s comments. The full text of CMS’s 

comments is contained in Appendix D. 

SHIP: Assistance to Beneficiaries iii OEI-07-00-00580 
TABLE OF CONTENTS 

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
INTRODUCTION 

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 Administration’s (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. 

SHIP: Assistance to Beneficiaries 1 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. 

SHIP: Assistance to Beneficiaries 2 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 nonrenewal 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 (tollfree telephone numbers included), and the CMS national toll-free number if they needed 

additional information and/or counseling services. 

SHIP: Assistance to Beneficiaries 3 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 MCO’s 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 nonrenewal 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. 

SHIP: Assistance to Beneficiaries 4 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 nonrenewals (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.

SHIP: Assistance to Beneficiaries 5 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 nonrenewals 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 CMS’s list of MCOs that 

withdrew from Medicare or reduced their service area effective January 1, 2001. We then 

used CMS’s 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 CMS’s 

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% 

4

AL, ME, NH, VA (most or all 

beneficiaries have no other MCO 

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. 

SHIP: Assistance to Beneficiaries 6 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 President’s Council on Integrity and Efficiency. 

SHIP: Assistance to Beneficiaries 7 OEI-07-00-00580 
FINDINGS 

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 tollfree 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 nonrenewals 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 Oregon’s 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. 

SHIP: Assistance to Beneficiaries 8 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, onethird of the counselors reported this increased workload adversely affected their ability to assist

beneficiaries, evidenced by delays in answering these calls.

We obtained CMS’s 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 CMS’s 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 wideranging 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 

SHIP: Assistance to Beneficiaries 9 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 program’s 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 “Mel’s Diner.” 

Customers at the diner commented about the “new daily menu specials,” which highlighted 

available Medicare and Medigap choices. This 

SHIP: Assistance to Beneficiaries 10 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. 

SHIP: Assistance to Beneficiaries 11 OEI-07-00-00580 
Specific Information on MCO Non-renewals is Untimely 

While 83 percent of SHIP counselors received specific information on managed care nonrenewals, 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 

Assistance in choosing between traditional Medicare fee-forservice and HMO plans 

Comparative information about available Medigap policies 

Most Beneficiaries Remain Unaware of SHIP 

41%

40%

34%

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: 

SHIP: Assistance to Beneficiaries 12 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. 

SHIP: Assistance to Beneficiaries 13 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% 

SHIP: Assistance to Beneficiaries 14 OEI-07-00-00580 
RECOMMENDATIONS

The CMS has implemented a broad-based initiative, the National Medicare Beneficiary 

Education Program, to educate beneficiaries about the Medicare program. The program’s 

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 CMS’s 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 CMS’s 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 CMS’s 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 nonrenewal 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. 

SHIP: Assistance to Beneficiaries 15 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 nonrenewals 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 nonrenewals 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 

SHIP: Assistance to Beneficiaries 16 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 CMS’s comments. The full text of their 

comments is contained in Appendix D. 

SHIP: Assistance to Beneficiaries 17 OEI-07-00-00580 
ENDNOTES 

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 CMS’s 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. 

SHIP: Assistance to Beneficiaries 18 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. 

SHIP: Assistance to Beneficiaries 19 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 

SHIP: Assistance to Beneficiaries 20 OEI-07-00-00580 
APPENDIX C 

National Performance Report - SHIPs

Counseling and Presentation Contacts

October 1999 - September 2001

SHIP: Assistance to Beneficiaries 21 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 

State 

Contacts 

in 

Person 

Contacts 

by 

Telephone 

Attendees at 

Educational 

Events 

Total 

SHIP 

Contacts 

Contacts 

in 

Person 

Contacts 

by 

Telephone 

Attendees at 

Educational 

Events 

Total 

SHIP 

Contacts 

Contacts 

in 

Person 

Contacts 

by 

Telephone 

Attendees at 

Educational 

Events 

Total 

SHIP Contacts 

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 

State 

Contacts 

in 

Person 

Contacts 

by 

Telephone 

Attendees at 

Educational 

Events 

Total 

SHIP 

Contacts 

Contacts 

in 

Person 

Contacts 

by 

Telephone 

Attendees at 

Educational 

Events 

Total 

SHIP 

Contacts 

Contacts 

in 

Person 

Contacts 

by 

Telephone 

Attendees at 

Educational 

Events 

Total 

SHIP Contacts 

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

SHIP: Assistance to Beneficiaries 24 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: 

Managed Care Withdrawals (OEI-07-00-00580) 

Assistance to Beneficiaries Affected by Medicare 

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: 

SHIP: Assistance to Beneficiaries 25 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 nonrenewals 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.