Sponsored by:

The Federal Interagency Forum on Aging Related Statistics 

and the Agency for Healthcare Research and Quality 

Health Insurance for the Elderly - Issues in 

Measurement Workshop, April 2003 

Meeting Summary, Commissioned Papers and 

 Discussants’ Remarks 

D.E.B. Potter and Jessica Vistnes, Editors 

Agency for Healthcare Research and Quality Working Paper No. 06003 

Suggested citation: Potter, D.E.B. and Vistnes, Jessica (editors). Health Insurance for the Elderly - Issues 

in Measurement Workshop, April 2003: Meeting Summary, Commissioned Papers and Discussants’ 

Remarks. Agency for Healthcare Research and Quality Working Paper No. 06003, March 2006, 

http://www.gold.ahrq.gov. 

AHRQ Working Papers provide preliminary analysis of substantive, technical and methodological issues. 

The papers are works in progress and have not undergone a formal external peer review. They are 

distributed to share valuable experience and research. Comments are welcome and should be directed to 

the corresponding author(s). 

The views expressed are those of the authors and no official endorsement by the Agency for Healthcare 

Research and Quality, the Department of Health and Human Services, or the member Agencies of the 

Federal Interagency Forum on Aging Related Statistics is intended or should be inferred. 
Health Insurance for the Elderly - Issues in Measurement Workshop, April 2003: 

Meeting Summary, Commissioned Papers and Discussants’ Remarks 

D.E.B. Potter and Jessica Vistnes (editors) 

March 2006

ABSTRACT

The Health Insurance for the Elderly: Issues in Measurement Workshop held April 29, 

2003, was sponsored by the Federal Interagency Forum on Aging-Related Statistics (the 

Forum) in partnership with the Agency for Healthcare Research and Quality (AHRQ). 

The workshop was designed to provide the Forum and Forum member agencies with 

expert advice to guide them on data activities related to health insurance for the elderly. 

This working paper -- Health Insurance for the Elderly - Issues in Measurement 

Workshop, April 2003: Meeting Summary, Commissioned Papers and Discussants’ 

Remarks -- comprises the proceedings from the workshop. The proceedings include 

recommendations (by the commissioned paper authors, workshop discussants and 

meeting participants) on indicators of health insurance coverage for inclusion in the 

Forum’s Older Americans: Key Indicators of Well-Being and highlight data gaps in the 

Federal Statistical System’s measurement of health insurance for the elderly. 

The first section of the proceedings summarizes the morning presentations by Mary 

Laschober (Overview of Health Insurance Options for the Elderly), Paul Fronstin 

(Employer-Sponsored Insurance), Tom Rice (Medigap), Carlos Zarabozo (Medicare 

Managed Care), Judy Kasper (Medicaid), Bruce Stuart (Prescription Drug Coverage), and 

Marc Cohen (Long-Term Care Insurance). This is followed by the two workshop 

commissioned papers: “Data Sources and Measures of Coverage and Benefits” by John 

Czajka and “Data Sources and Measures of Access and Affordability” by Deborah 

Chollet. Data sources discussed include the Medicare Current Beneficiary Survey 

(MCBS), the Medical Expenditure Panel Survey (MEPS), the National Health Interview 

Survey (NHIS) and the Health and Retirement Survey (HRS), among others. The next 

section contains the workshop discussants’ written remarks; authored by Pam Farley 

Short, Melinda Beeuwkes Buntin and Jeannette A. Rogowski. An Epilogue (prepared by 

John Czajka) follows, focusing on the passage of the Medicare Prescription Drug, 

Improvement and Modernization Act (MMA). Also provided are Appendices: the agenda 

for the meeting; a summary of the major data sources available to measure health 

insurance for the elderly, including web links to each data source’s web page; 

biographical sketches of the workshop speakers; and glossary resources on health 

insurance terms, including those developed by the Federal Interdepartmental Committee 

on Employment-based Health Insurance Surveys. 

This working paper -- Health Insurance for the Elderly - Issues in Measurement 

Workshop, April 2003: Meeting Summary, Commissioned Papers and Discussants’ 

Remarks -- was edited by D.E.B. Potter and Jessica Vistnes. 

i
D.E.B. Potter and 

Jessica Vistnes, Ph.D. (editors) 

Center for Financing, Access and Cost Trends 

Agency for Healthcare Research and Quality 

540 Gaither Road, Suite 500 

Rockville, MD 20850 

Phone: (301) 426-1406 

E-mail DPotter@AHRQ.gov

E-mail JVistnes@AHRQ.gov

Kristen Robinson, Ph.D. 

Staff Director 

Federal Interagency Forum on Aging-Related Statistics 

3311 Toledo Road, Room 6227 

Hyattsville, MD 20782 

Phone: (301) 458-4460 

E-mail: kgr4@cdc.gov 

Web site: http://www.agingstats.gov

ii
Table of Contents 

Acknowledgements ........................................................................... v 

About the Workshop and this Report ................................................ 1 

Summary of Morning Presentations ................................................ 4

Welcome and Introduction........................................................................ 5 

Overview of Health Insurance Options for the Elderly......................................... 5 

Employer-Sponsored Insurance................................................................ 10 

Medigap .............................................................................................. 13 

Medicare Managed Care........................................................................... 15 

Medicaid............................................................................................. 18 

Prescription Drug Coverage....................................................................... 19 

Long-Term Care Insurance....................................................................... 21 

Morning Question-and-Answer Session and Discussion...................................... 23 

Afternoon Session ........................................................................... 26

Commissioned Papers 

Data Sources and measures of actual coverage and benefits, John Czajka ...............27 

Data sources and measures of accessibility and affordability, Deborah Chollet..... 49

iii
Table of Contents 

Discussants’ Remarks 

Pamela Farley Short.........................................................................65 

Melinda Beeuwkes Buntin and Jeannette A. Rogowski ..............................72 

Closing Comments 

Questions-and-Answers ....................................................................77 

Recommendations and Facilitated Discussion ..........................................78 

Epilogue 

Passage of the Medicare Modernization Act (MMA), John Czajka.................80 

Appendices 

1. Meeting Agenda.............................................................................82 

2. Summary of Major Data Sources Available to Measure Health Insurance 

 for the Elderly .............................................................................85 

3. Biographical Sketches of Workshop Speakers..........................................97 

4. Glossary Resources on Health Insurance Terms ....................................103 

iv
Acknowledgements 

The Health Insurance for the Elderly: Issues in Measurement Workshop held April 29, 

2003, was sponsored by the Federal Interagency Forum on Aging-Related Statistics (The 

Forum) in partnership with the Agency for Healthcare Research and Quality (AHRQ). 

The workshop and the subsequent proceedings would not have been possible without the 

efforts of many. 

Planning for the meeting was provided by the Forum’s health insurance working group 

whose members included D.E.B. Potter (Chair) and Jessica P. Vistnes, Agency for 

Healthcare Research and Quality; Ryan Helwig, Bureau of Labor Statistics; Franklin 

Eppig, Centers for Medicare & Medicaid Services; Robin Cohen and Margie Goulding, 

National Center for Health Statistics; Hunter McKay, Office of the Assistant Secretary 

for Planning and Evaluation, U.S. Department of Health and Human Services; Brian 

Harris-Kojetin, Office of Management and Budget; Charles T. Nelson, U.S. Census 

Bureau; Donald Stockford, Veterans Health Administration; and the Forum’s Staff 

Director, Kristen Robinson, National Center for Health Statistics. Lori Whitten, Cygnus 

Corporation, Inc served as the Executive Secretary for the planning group. 

The Forum would like to give special thanks to the commissioned paper authors John 

Czajka and Deborah Chollet; the discussants Pamela Farley Short, Melinda Beeuwkes 

Buntin and Jeannette A. Rogowski; the meeting presenters Mary Laschober, Paul 

Fronstin, Tom Rice, Carlos Zarabozo, Judy Kasper, Bruce Stuart and Marc Cohen; and 

the session chairs Steven B. Cohen and Jon R. Gabel for their enumerable contributions. 

Without their expertise and professionalism the meeting would not have been possible. 

Special thanks are also given to the meeting participants, far too numerous to mention, 

without whom a successful meeting would not have been possible. 

The Forum is grateful to the Agency for Healthcare Research and Quality’s Center for 

Financing, Access and Costs Trends for the financial support provided for the meeting. 

Special thanks are also given to the Bureau of Labor Statistics and staff for their hosting 

of the meeting at the Bureau of Labor Statistics’ Conference Center, in Washington, D.C. 

The Forum is also indebted to Lori Whitten, Molly Wolfe, Raquel McConnico and Mary 

Bedford at Cygnus Corporation, Inc., who provided expert meeting support services. 

v
About The Workshop And This Report 

The Health Insurance for the Elderly: Issues in Measurement Workshop held April 29, 

2003, was sponsored by the Federal Interagency Forum on Aging-Related Statistics 

(Forum) in partnership with the Agency for Healthcare Research and Quality (AHRQ). 

The purpose of the workshop was to inform the Forum and Forum member Agencies on 

data needs surrounding the measurement of supplemental health insurance for people age 

65 and over. 

Although most people age 65 and over receive their primary health insurance through 

Medicare, the services covered under Medicare Parts A and B are limited primarily to 

acute care services such as inpatient hospital care, physician visits, stays in skilled 

nursing facilities, and hospice care. To cover the remaining health care costs, Medicare 

enrollees can obtain supplemental health insurance either privately (e.g., employersponsored coverage or self-purchased Medigap) or publicly (e.g., Medicare HMO 

policies or Medicaid). Without this insurance, older Americans would be paying a higher 

percentage of their health care costs out-of-pocket. 

The workshop was designed to provide the Forum and Forum member agencies with 

expert advice to guide them on data activities related to health insurance for the elderly. 

The short-term objectives were to: 1) to obtain information on emerging trends in 

supplemental health insurance, particularly with respect to the data needs and 

measurement issues, and 2) develop recommendations for a supplemental health 

insurance indicator(s) for the Forum’s chartbook Older Americans: Key Indicators of 

Well-Being. Another objective was to identify any important holes in the information on 

supplemental insurance to set the stage for future discussion of a possible longer-term 

effort by Forum member agencies to try to improve the measurement of supplemental 

insurance. 

The morning session of the workshop focused on providing an overview of coverage 

options and specific aspects of health insurance for the elderly. Each presenter addressed 

the following questions: 

• What are the current issues related to coverage? 

• What are the most likely future issues related to coverage? 

• What should be measured?

Presenters reviewed employer-sponsored insurance, Medigap, Medicare managed care, 

Medicaid, prescription drug coverage, and long-term care. The question-and-answer 

period focused on technical clarifications. 

The afternoon session centered on the presentation of two commissioned papers 

describing data sources and measures on (1) actual coverage and benefits and (2) the 

accessibility and affordability of coverage. The authors made recommendations on 

chartbook indicators related to insurance coverage and highlighted data gaps. Discussants 

1
commented on the papers and remarked on the key issues presented. The workshop 

concluded with a facilitated discussion on the intersection of policy issues and data needs. 

In addition to the invited presenters and Forum members’ Agency staff, workshop 

participants included representatives from private and public organizations in the 

Washington, D.C., area with an interest in health care policy and insurance issues. 

Workshop attendees included representatives of the Congressional Budget Office, the 

Medicare Payment Advisory Commission, Actuarial Research Corporation, the Lewin 

Group, the National Association of Insurance Commissioners, the Urban Institute, the 

Commonwealth Fund, the Kaiser Family Foundation and research scientists involved 

with major surveys of the elderly population. Approximately 80 people attended the 

Workshop held at the Bureau of Labor Statistics Conference Center, Washington, D.C. 

This working paper -- Health Insurance for the Elderly - Issues in Measurement 

Workshop, April 2003: Meeting Summary, Commissioned Papers and Discussants’ 

Remarks -- comprises the proceedings from the workshop. 

The first section of the proceedings summarizes the morning presentations by Mary 

Laschober (Overview of Health Insurance Options for the Elderly), Paul Fronstin 

(Employer-Sponsored Insurance), Tom Rice (Medigap), Carlos Zarabozo (Medicare 

Managed Care), Judy Kasper (Medicaid), Bruce Stuart (Prescription Drug Coverage), and 

Marc Cohen (Long-Term Care Insurance). Presenters reviewed the summary of their 

respective presentations prior to the release of these proceedings. The section concludes 

with a summary of the facilitated floor discussion that followed the presentations. 

The next section contains the two commissioned papers, authored by John Czajka and 

Deborah Chollet, respectively. Prior to the workshop, earlier versions of the 

commissioned papers were reviewed by Pam Farley Short, Melinda Beeuwkes Buntin 

and Jeannette A. Rogowski, who served as workshop discussants, and by the Forum’s 

health insurance working group. The papers were revised by the authors after the 

workshop and subsequently reviewed and edited by the proceedings’ editors as necessary. 

The commissioned papers include some of the changes in questionnaire content that have 

occurred since the workshop was held in 2003. 

The next section contains discussants’ written remarks. The written remarks were based 

on an earlier version of the commissioned papers and the workshop presentations. The 

next section is a summary of the closing session and includes recommendations for future 

Forum chartbooks on Older Americans: Key Indicators of Well-Being. 

The last section is an Epilogue (prepared after the workshop) and speaks to the passage of 

the Medicare Prescription Drug, Improvement and Modernization Act (MMA) and it’s 

potential impact on health insurance (and the measurement of health insurance) for the 

elderly. 

The Appendices section contains: the agenda for the meeting; a summary of the major 

data sources available to measure health insurance for the elderly, including web links to 

2
each data source’s web page; biographical sketches of the workshop speakers; and 

glossary resources on health insurance terms, including those developed by the Federal 

Interdepartmental Committee on Employment-based Health Insurance Surveys. 

Prior to the final release of the workshop proceedings, this working paper was reviewed 

by AHRQ senior staff as part of the AHRQ Working Paper peer review process. AHRQ 

Working Papers provide preliminary analysis of substantive, technical and 

methodological issues. They are distributed to share valuable experience and research. 

Comments are welcome and should be directed to the corresponding author of the 

section. The views expressed are those of the authors and no official endorsement by the 

Agency for Healthcare Research and Quality, the Department of Health and Human 

Services, or the member Agencies of the Federal Interagency Forum on Aging Related 

Statistics is intended or should be inferred. 

Since the workshop was held, the Federal Interagency Forum on Aging-Related Statistics 

published a new version of Older Americans: Key Indicators of Well-Being. As a result 

of the Health Insurance for the Elderly - Issues in Measurement Workshop the Forum’s 

recent publications include new indicators on health insurance coverage. For the most up

to date version of the Forum’s Older Americans: Key Indicators of Well-Being, or for 

more information about the Forum, see the Forum’s web site http://www.agingstats.gov.

Web site addresses provided in these proceedings were valid as of March 7, 2006. 

Comments on this working paper should be addresses to the corresponding author of the 

commissioned paper or to below: 

D.E.B. Potter and 

Jessica Vistnes, Ph.D. (editors) 

Center for Financing, Access and Cost Trends 

Agency for Healthcare Research and Quality 

540 Gaither Road, Suite 500 

Rockville, MD 20850 

Phone: (301) 426-1406 

E-mail DPotter@AHRQ.gov

E-mail JVistnes@AHRQ.gov

Kristen Robinson, Ph.D. 

Staff Director 

Federal Interagency Forum on Aging-Related Statistics 

3311 Toledo Road, Room 6227 

Hyattsville, MD 20782 

Phone: (301) 458-4460 

E-mail: kgr4@cdc.gov 

Web site: http://www.agingstats.gov

3
Summary of Morning Presentations

Overview and Key Issues in Health Insurance Options for the 

Elderly 

Lori Whitten, Cygnus Corporation, Inc

Presentations prepared for the 

Health Insurance for the Elderly: Issues in Measurement Workshop, April 2003 

 

Sponsored by the Federal Interagency Forum on Aging-Related Statistics 

And the Agency for Healthcare Research and Quality 

April 29, 2003, Washington, DC 

Suggested citation: Whitten, Lori. “Summary of morning presentations: Overview and key issues in health

insurance options for the elderly.” In Potter, D.E.B., and Vistnes, Jessica (editors). Health Insurance for the 

Elderly - Issues in Measurement Workshop, April 2003: Meeting Summary, Commissioned Papers and

Discussant’s Remarks. Agency for Healthcare Research and Quality Working Paper No. 06003, March 

2006, http://www.gold.ahrq.gov. 

AHRQ Working Papers provide preliminary analysis of substantive, technical and methodological issues. 

The papers are works in progress and have not undergone a formal external peer review. They are

distributed to share valuable experience and research. Comments are welcome and should be directed to the

authors. The views expressed are those of the authors and no official endorsement by the Agency for

Healthcare Research and Quality, the Department of Health and Human Services, or the member Agencies 

of the Federal Interagency Forum on Aging Related Statistics is intended or should be inferred. 

Corresponding author:

D.E.B. Potter (editor) 

Center for Financing, Access and Cost Trends 

Agency for Healthcare Research and Quality 

540 Gaither Road, Suite 500 

Rockville, MD 20850

E-mail: DPotter@AHRQ.gov 

4
Morning Presentations 

Welcome and Introduction 

Speaker: Steven B. Cohen, Ph.D. 

Director, Center for Financing, Access and Cost Trends, AHRQ 

Dr. Steven Cohen welcomed the participants and reviewed the agenda. He commented 

that the impetus for the workshop came from discussions among members of the Aging 

Forum about statistics that reflect the well-being of the elderly. The Aging Forum

updates its indicators regularly and recognizes the increasingly important role of 

insurance and supplemental coverage for elderly as a quality-of-life issue. There is a 

need for Federal agencies to reassess data sources that inform health care policy, given 

the current context for health insurance coverage. The Federal statistical community 

needs to identify data gaps and determine how agencies might improve data sources to 

provide a more complete picture of health insurance for the elderly. 

Dr. Cohen thanked the members of the workshop planning committee and acknowledged 

the Jackson Foundation for providing support for refreshments and Cygnus Corporation 

for providing logistical facilitation. 

Overview of Health Insurance Options for the Elderly 

Presenter: Mary Laschober, Ph.D.

BearingPoint, Inc. 

Dr. Mary Laschober described the Medicare program, including eligibility requirements, 

services covered, and expenditures. Medicare does not cover all health care services

needed by the elderly and eligible disabled persons, and she reviewed options for 

supplemental insurance. Dr. Laschober also described the demographic characteristics of 

Medicare beneficiaries and reviewed the sources of payment for Medicare beneficiaries’ 

medical services. Medicare is a complex program, and beneficiaries are often confused 

about their options and coverage. Unfortunately, beneficiary confusion about Medicare 

coverage affects the accuracy of self-reported data collected from national surveys. 

Verification of survey data using administrative claims data enhances the measurement of 

health insurance coverage. 

Congress established the Medicare program in 1965 to protect the elderly (defined as 

individuals aged 65 years and older) from financial ruin due to high medical expenses. 

U.S. citizens or permanent residents are automatically eligible for Medicare benefits if

they are aged 65 years or older and have paid into Social Security (or the Railroad 

Retirement Board retirement program) for 40 quarters. A U.S. citizen or permanent 

resident aged 65 years or older whose spouse or former spouse receives Social Security 

(or Railroad Retirement benefits) also is eligible for Medicare. Some individuals who do 

not meet these requirements can purchase Medicare coverage if they are U.S. citizens or 

legal residents who have resided in the United States for at least 5 years. The cost of 

purchasing Medicare is based on the number of quarters the individual has contributed to 

5
Social Security. For example, the Part A premium in 2003 was $174 per month for 

people contributing between 30 and 39 quarters and $316 per month for people 

contributing fewer than 30 quarters. 

In 2002, about 97 percent of the resident U.S. population aged 65 years or older were 

covered by the Medicare program (about 34.5 million people). Medicare benefits also

cover some permanently disabled individuals under age 65 years and people with end 

stage renal disease, but the large majority of Medicare beneficiaries (85 percent) are 

elderly. 

Medicare has three parts—Hospital Insurance (HI or Part A), Supplementary Medical 

Insurance (SMI or Part B), and Medicare+Choice (a managed care program or Part C). 

Medicare Part A provides hospital insurance and pays for care provided by inpatient 

hospitals, skilled nursing facilities, some home health care providers, and hospice care. 

Eligible persons are enrolled automatically at no cost. The HI Trust Fund, which is 

derived primarily from a payroll tax paid by workers and employers, finances Medicare 

Part A. Part A constituted about 51 percent of Medicare expenditures in 2002. Many are 

concerned about the financial strain on Medicare Part A. Demographic shifts, including 

the aging of the baby boom generation and a reduction in the worker-to-retiree ratio, have 

significant implications for the future financing of Medicare Hospital Insurance. 

Medicare Part B covers physician services, rehabilitation therapy, outpatient hospital, 

diagnostic tests, some home health care, outpatient therapy, outpatient mental health, and 

most medical supplies and services. Individuals who are eligible for Part A are enrolled 

in Part B automatically unless they opt out of supplemental coverage. Individuals 

covered by Part B pay a premium ($58.70 per month in 2003). The majority (95 percent) 

of new Medicare enrollees choose to keep Part B. Some data indicate that individuals 

who opt out of Part B do so because they do not understand Part B benefits and/or do not 

understand why they should pay a monthly premium for these benefits. The SMI Trust 

Fund—derived from a combination of beneficiary premiums, general tax revenues, and 

interest—finances Medicare Part B. In 2002, Medicare Part B expenditures constituted 

about 36 percent of the program’s total expenditures, but the costs associated with 

supplementary medical insurance are rising at a faster rate than those of hospital 

insurance. 

Medicare Part C, the Medicare+Choice (M+C) program, often offers enhanced benefits to 

beneficiaries who choose to enroll in an M+C plan when one is available in their area. 

Congress established the program under the Balanced Budget Act of 1997 to expand the 

types of private health plans available to beneficiaries. The Medicare program contracts 

with private managed care plans to provide Medicare Parts A and B services to Medicare 

beneficiaries. M+C plans are most often health maintenance organizations (HMOs), 

where beneficiaries covered under these plans are often limited to doctors in the HMO’s 

network and service area (and a referral is usually needed to see a specialist). Under 

M+C demonstrations involving preferred provider organizations (PPOs),1

 a beneficiary 

can see any doctor in the PPO’s network at any time (but costs are higher for non-

 1

 Not all PPOs, but most, are demonstration plans under the M+C program.

6
network provider visits). The M+C program also offers private fee-for-service plans. 

These plans cover services performed by any doctor willing to accept the plan’s fees, 

terms, and conditions. Other managed care health plan options available in some areas 

through the M+C program include provider-sponsored organizations, PACE plans ,2

point-of-service plans, and medical savings accounts (no medical savings accounts have 

been offered to Medicare beneficiaries to date). The Medicare+Choice program

accounted for 13 percent of Medicare expenditures in 2002. 

Medicare expenditures in total comprised 19 percent of U.S. health care expenditures (or 

about $247 billion) in 2002. To put Medicare expenditures in perspective, they 

represented 13 percent of the Federal budget in 2002 and 2.2 percent of the Nation’s 

gross domestic product in 2000. The average expenditure amount per beneficiary was 

about $9,573 in 1999. However, it is important to note that Medicare expenditures are 

concentrated on beneficiaries with the greatest medical need. Six percent of beneficiaries 

account for almost 50 percent of Medicare payments. Over the long term, per capita 

growth in Medicare spending has closely tracked that of private insurance. The Centers

for Medicare & Medicaid Services (CMS) administers the program through contracts 

with private carriers and fiscal intermediaries, and local offices of the Social Security 

Administration (SSA) implement Medicare enrollment. 

As noted previously, Medicare is not a comprehensive health care program. 

Beneficiaries pay deductibles, copayments, and coinsurance for both Part A and Part B 

services. For example, Part B has a $100 per-year deductible, and beneficiaries must pay 

20 percent coinsurance on Medicare-approved charges for most services. If the attending 

physician or other Part B provider does not accept Medicare assignment for the 

Medicare-covered service,3

 then the patient also is responsible for the amount above the 

Medicare-approved charge. Medicare does not cover some important medical services, 

such as most outpatient prescription drugs, long-term care (including custodial care at 

home or in a nursing home), routine examinations, or vision, dental, and hearing care. In 

1999, for example, Medicare paid only 53 percent of Medicare beneficiaries’ health care 

costs. Not including premium payments, beneficiaries themselves paid for almost onefifth of their health care costs out of their own resources. 

Because Medicare does not pay for all health services or all costs for Medicare-covered 

services, in 1999, beneficiaries aged 65 years and older spent a projected average of 

about $2,430 (19 percent of their income) on health care needs. This figure excludes 

those needing home care or long-term care. A quarter of Medicare beneficiaries aged 65 

years or older spent more than $3,000 on out-of-pocket health care expenses. Out-ofpocket spending on prescription drugs represents a significant portion of the health care 

 2

 PACE stands for “Program of All Inclusive Care for the Elderly.” The PACE program is a unique

capitated managed care benefit for frail elderly Medicare beneficiaries provided by a not-for-profit or 

public entity that features a comprehensive medical and social service delivery system. It uses a 

multidisciplinary team approach in an adult day health center supplemented by in-home and referral 

service in accordance with participants’ needs. 

3

 Part B providers who agree to accept the Medicare-approved amount as payment in full for the Medicarecovered service agree to “accept assignment” for that service. 

7
expenditures borne by Medicare beneficiaries. In 2001, beneficiaries spent about $848 

on prescription medications, with 9 percent spending more than $2,500. 

To help protect beneficiaries from out-of-pocket health care costs not paid for by 

Medicare, most beneficiaries (87.5 percent of non-institutionalized beneficiaries in 1999) 

rely on supplemental insurance to fill gaps in Medicare’s coverage. They obtain 

supplemental insurance from a variety of sources, but 12.5 percent had no insurance to 

supplement their Medicare benefits in the fall of 1999. In the fall of 1999, about 5.1 

percent of those aged 65 years or older had health insurance coverage from a current 

employer. If a Medicare beneficiary (or his/her spouse) works beyond age 65 for an 

employer with 20 or more employees, by law the elderly employee must be offered the 

same health insurance package as all other employees. Employer-sponsored health 

insurance benefit plans are often more generous than Medicare (e.g., cover routine dental 

and vision care). If an individual accepts the employer’s insurance and joins Medicare, 

Medicare is the secondary payer. If the individual rejects the employer’s offer of 

insurance, Medicare becomes the primary insurance program. 

In the fall of 1999, about 28 percent of beneficiaries living in the community relied on 

retiree employer-sponsored coverage to supplement Medicare. This coverage is provided 

by a beneficiary’s (or his/her spouse’s) former employer or union. For retirees aged 65 

years or older, retiree employer-sponsored insurance supplements Medicare benefits. 

Employee-sponsored retiree coverage acts as the primary payer for retirees under age 65. 

Employers have considerable flexibility in designing their retiree health benefits, which 

results in a wide variation in actual benefits and out-of-pocket expenses. Many 

companies require the beneficiary to pay a premium for this supplemental coverage, 

which in general though is more generous than Medigap or Medicare+Choice plans. 

Some employers contract with Medicare+Choice plans to provide retiree health benefits, 

which may be different from the Medicare+Choice plan benefits offered to other 

Medicare enrollees. 

About 24 percent of non-institutionalized beneficiaries held an individually-purchased 

supplemental policy (i.e. Medigap plan) in the fall of 1999. Private insurance companies 

sell such plans to fill the “gaps” in Medicare. In 1992, the federal government mandated 

that only 10 standardized Medigap plans (A through J) could be sold in most States, with 

each plan offering a different set of benefits and varying in price. All plans with the same

letter provide the same benefits regardless of the insurance company that is selling it. 

Some plans offer minimum coverage (e.g., Medicare Part A and/or Part B deductibles 

and coinsurance only), but others offer more extensive benefits (e.g., they pay for limited 

home care, some prescription drugs, Part B excess charges, and foreign travel 

emergencies). No Medigap plan covers long-term custodial care at home or in a nursing 

facility, vision or dental care, hearing aids, private-duty nursing, or unlimited prescription 

drugs. Any standardized policy may be sold as Medicare SELECT—a PPO for Medigap. 

Participants in Medicare SELECT must use specific hospitals and doctors to receive full 

benefits. Medigap plans offer an open enrollment period for those turning age 65 (and 

some special enrollment periods) when underwriting and coverage denial are not allowed. 

After the open enrollment period, companies may restrict coverage, deny coverage, or 

8
base an individual’s premium on his/her health status (i.e., underwrite the policy). 

Recent data indicate that about 5 percent of Medicare beneficiaries may be 

overinsured—that is, they keep their Medigap policy even after enrolling in an M+C plan 

so they can still retain their Medigap coverage if they leave the M+C plan.

About 17 percent of beneficiaries relied on Medicare+Choice (or another type of 

Medicare HMO that is not an M+C plan) for primary supplemental coverage in the fall 

of 1999. Private managed care companies contract with CMS to provide Parts A and B 

services to enrolled Medicare beneficiaries. Medicare pays M+C plans a fixed monthly 

payment per member to provide all services based on a county payment rate. To be 

eligible, one must have Medicare Parts A and B, live in the plan’s service area, and not 

have end-stage renal disease or receive hospice care at the time of enrollment. Extra 

benefits covered might include prescription drugs, vision, hearing, or dental services, 

Medicare deductibles, and reduced copayments. M+C plans might offer these additional 

health services at no additional charge to the beneficiary or they might charge enrollees a 

monthly plan premium for these extra services. M+C plans are mainly offered in urban 

areas, although private fee-for-service plans and PPO demonstrations are expanding into 

rural areas. 

About 11 percent of Medicare beneficiaries living in the community in the fall of 1999 

relied on Medicaid for their supplemental insurance. These individuals are called “dual 

eligibles,” because they are eligible for Medicaid benefits as well as the Medicare 

program. Some are eligible for their State’s full set of Medicaid benefits if they meet their 

State’s income, asset, or other eligibility requirements that apply to all individuals 

residing in the State. Those receiving full Medicaid benefits represent 42 percent of dual 

eligibles. Other Medicare beneficiaries are “dual eligibles” because their income

qualifies them for one of the Medicare Savings Programs: under the Qualified Medicare 

Beneficiary (QMB) program, the State pays the beneficiary’s Medicare Part A and B 

premiums, deductibles, and coinsurance amounts. QMBs have an annual income no 

higher than 100 percent of the Federal poverty level and many must meet the criteria of 

an asset test (if the State has not waived this requirement). QMBs represent 48 percent of 

dual eligibles. For Specified Low-Income Medicare Beneficiaries (SLMBs)—individuals 

with an annual income no more than 120 percent of the Federal poverty level and that 

meet the criteria of an asset test—the State pays Medicare Part B premiums. SLMBs

represent 8 percent of dual eligibles. The Medicare Savings Programs also require 

limited State assistance for other low-income populations and some Medicare 

beneficiaries outside of the aged 65 years and older category (e.g., qualified disabled and 

working individuals). 

State pharmacy assistance programs can be another source of supplemental benefits for 

Medicare beneficiaries. In 2000, 28 states offered assistance with outpatient prescription 

drug costs through coverage of copayments and deductibles is counted prices from

participating pharmacies, or payment for certain drugs to poor and “near poor” 

beneficiaries. Some of these programs charge beneficiaries a monthly fee. In 2000, these 

programs covered about 1.2 million individuals representing 3 percent of Medicare 

beneficiaries. Approximately 1.6 million of the nation’s federally recognized American 

9
Indians and Alaska Natives obtain health care through the Indian Health Service. The 

Veterans Health Administration (VA) provides supplemental benefits to military 

veterans. Access to VA benefits are based on priority group, with the highest priority 

given to individuals with a service-connected disability. Medicare beneficiaries usually 

obtain health care services at a VA facility. In 2001, TRICARE for Life began offering 

supplemental insurance coverage for Medicare-eligible uniformed services retirees aged 

65 years and older who have Medicare Part A and Part B. Some family members are also

eligible for TRICARE for Life benefits, which include coverage for outpatient 

prescription drugs (but which do not include coverage for routine dental care, hearing 

aids, or eyeglasses). Single service insurance policies to supplement Medicare coverage 

may also be available for long-term care insurance, cancer care, dental care, and care for 

other specific health events. 

Dr. Laschober described the demographic characteristics of Medicare beneficiaries in 

2001. More than half (57 percent) of beneficiaries were female, and 19 percent selfidentified as belonging to a racial or ethnic minority group. The fastest growing group of 

beneficiaries is those aged 85 years or older, representing 11 percent of all beneficiaries 

in 2001. The health status of beneficiaries varies, with 13 percent categorized as disabled 

or having end-stage renal disease and 28 percent reporting their health as only fair or 

poor. Six percent of beneficiaries resided in long-term care facilities (most in nursing 

homes). The majority (77 percent) of beneficiaries lived in urban areas. A significant 

proportion of beneficiaries (40 percent) had an income at or below 200 percent of the 

federal poverty level. A critical policy issue is the lack of prescription drug coverage: for 

example, approximately 38 percent of Medicare beneficiaries had no type of outpatient 

prescription drug benefits in the fall of 1999. 

Dr. Laschober referred the participants to various Henry J. Kaiser Family Foundation 

materials (www.kff.org) and the CMS Web sites (www.cms.hhs.gov and 

www.medicare.gov) for additional information on Medicare and supplemental insurance. 

Retiree Health Benefits: Savings Needed To Fund Health Care in Retirement 

Presenter: Paul Fronstin, Ph.D. 

Employee Benefit Research Institute (EBRI)

Dr. Paul Fronstin described current trends in employment-based retiree health benefits 

and presented EBRI’s retiree health savings model, which estimates the amount of 

savings an individual or couple will need to purchase health benefits on retirement. He 

briefly reviewed options for public policy and the implications for workers. 

Fewer employers offer retiree health benefits than in the past. The shift in employersponsored retiree health insurance benefits started in the early 1990s, after a major 

change in the accounting standards for post-retirement benefits other than pensions. The 

standards required companies to include the expense of such benefits in their profit and 

loss calculations, thereby negatively shifting companies’ views on offering retiree health 

insurance. Companies began to perceive offering retiree health benefits as a long-term 

10
liability. Combined with the increasing cost of providing such benefits (due to increasing 

health care costs and longer life expectancies), the new accounting standards markedly 

changed the benefits offered by employers. In 1997, 20 percent of employers in the 

private sector offered retiree health benefits. This number fell to 11 percent in 2000. 

When employers do offer such benefits, retirees are paying more for both benefits and 

health care services. Employers are reaching spending caps for health insurance benefits 

and are attempting to reduce the expense in a number of ways. They are increasing the 

age and service requirements for retiree benefit eligibility and eliminating retiree health 

benefits for new hires. Some employers are taking defined contribution approaches or 

adopting access-only plans, which allow employees to buy into the health plan but do not 

provide retirees with a subsidy. 

Retirees are assuming an increasing amount of their health insurance and expenses, yet 

tax treatment of these expenses is different from that of an active employee. 

Employers can claim health insurance costs as a business expense, and such benefits are 

not counted towards employee taxable income. For the active employee, the employer’s 

and in some cases the employee’s contributions are not counted toward taxable income. 

Some active employees who pay out-of-pocket expenses can do so out of flexible 

spending accounts (if their employers offer such a plan), which permit payment of such 

expenses on a pretax basis. Retirees face a different situation. Employer-sponsored 

retiree health insurance is not counted as taxable income for the employee, although it is 

a deductible business expense for employers. Yet, retirees making premium

contributions and paying out-of-pocket health care expenses must meet the 7.5 percent 

adjusted gross income test to deduct these expenses from taxable income. However, only 

the portion spent above the 7.5 percent level is tax deductible. 

As indicated in Dr. Fronstin’s presentation, Medicare benefits are not comprehensive. 

Major issues include the lack of a prescription drug benefit and long-term care coverage. 

Medicare has no out-of-pocket maximum, and deductibles and copays can be significant. 

For example, the deductible for days 1–60 of inpatient care is $840. Medicare 

beneficiaries pay a $210/day copay for days 61–90, a $420/day copay for days 91–150, 

and the full cost thereafter. Concerns about the financing of the Medicare Trust Fund are 

widespread. As a result, future retirees may be responsible for even greater cost sharing. 

Because Medicare covers only 53 percent of the health care costs of the elderly 

population, many individuals purchase Medigap insurance. The 10 standardized plans do 

not offer much flexibility for consumers to tailor insurance to meet individual needs. 

Medigap Plan I—the most frequently offered plan with some prescription drug 

coverage—pays a maximum of $1,250 per year for prescriptions. This plan pays a 

maximum of $1,600 per year for at-home recovery care, does not cover nursing after 100 

days, pays no hospital expenses after the lifetime reserve is depleted, and limits lifetime 

foreign care payments to $50,000. Medigap plan availability varies geographically, and 

not all 10 plans are available in each State. 

Clearly, individuals will need to save a considerable amount of money for health care 

expenses on retirement. EBRI developed a retiree health savings model to help people 

11
estimate how much they will need, based on various assumptions related to insurance

premium levels (i.e., the individual’s source of insurance and the benefits covered), 

annual premium increases, and age at the time of death. Model users also can assume

retirement age, rates of return on savings, out-of-pocket expenses, and Medicare Part B 

premium amount. Dr. Fronstin showed the amount of savings needed for employmentbased retiree benefits and for Medigap coverage, given various assumptions about rates 

of return on investments (4 percent), employment-based premiums, and out-of-pocket 

expenses. For example, the savings needed by employment-based benefits for a person 

retiring at age 65 in 2003 (including premiums and Medicare Part B premiums) would be 

$62,000, assuming a 7 percent annual increase in costs and death at age 80. If the current 

rate of a 14 percent annual increase in health care costs holds, the same individual would 

need $100,000 assuming death at age 80. The savings needed for Medigap coverage for 

a person retiring at age 65 in 2003 (including premiums and Medicare Part B premiums) 

would be $115,000, assuming a 7 percent annual increase in costs and death at age 85. If 

the current rate of a 14 percent annual increase in health care costs holds, the same

individual would need $230,000, assuming death at age 85. 

Individuals will need to consider other factors when estimating the amount of savings

needed for health care insurance on retirement. A lower return on investments than 

assumed in the model would require a higher level of savings. Another important 

consideration is the amount of out-of-pocket expenses, given substantial individual 

market variation in benefits. Individuals who take advantage of group coverage 

purchasing power will realize substantial benefits in terms of lower needed savings. 

A public policy change on tax treatment of health care insurance and expenses might help 

the elderly. Possible beneficial changes might include allowing retirees to exclude their 

contributions toward health insurance from taxable income. Extending flexible spending 

accounts to retirees would help the elderly pay out-of-pocket health care expenses. 

Finally, retirees would benefit from a policy allowing tax-free distributions from

retirement plans (e.g., 401K plans) for qualified health insurance and health care service 

expenses. A combination of these policy changes would maximize assistance to the 

elderly. For example, the savings needed for employment-based benefits for an 

individual retiring in 2003 at age 65 would be $73,000 (assuming that the 14 percent 

annual increase in health care costs eventually decreases to 5 percent), if the age of death 

is 80 years. The $73,000 needed, given no tax deductibility, decreases to $62,000 if 

premiums were tax deductible. The savings amount needed decreases further to $58,000 

if individuals could deduct premiums and use tax-free distributions from savings plans to 

pay for health insurance and health care expenses. 

Other options for public policy changes that might alleviate the financial burden on the 

elderly population include the expansion of public programs. Expanding the eligibility to 

purchase Medicare, prescription drug coverage, changing the eligibility age, and reducing 

the Medicare out-of-pocket maximum would improve the situation for retired individuals. 

Another option is employer mandates for the provision of retirement health care benefits. 

12
Public education is key to ensuring that people have sufficient savings for health care 

costs on retirement. Workers need to understand the available options and consider their 

health status and potential out-of-pocket expenses when planning for retirement. To fully 

grasp the savings amount required, individuals should consider how pre-existing 

conditions affect insurance availability and calculate their personal life expectancy. 

In conclusion, Dr. Fronstin stressed that if the current trends continue, few future retirees 

will qualify for subsidized retiree health benefits. Workers retiring today will need a 

large sum of money, depending on factors such as age at time of retirement, age at death, 

and return on investment. An individual’s insurance premium and benefits covered, 

insurance premium inflation rates, and age effects on insurance also determine the 

savings amount required for health care on retirements. Future retirees will need even

more money to cover their health insurance and health care expenses. The projections 

and assumptions presented actually underestimate the amount needed, because they do 

not account for the long-term care that many will need. Even for access-only plans, 

retirees realize substantial savings from employment-based plans compared with 

individual market plans. In response to the need for higher savings amounts on 

retirement, labor market dynamics may change. Workers might defer retirement age 

beyond the time planned originally. Current data demonstrate that the labor force 

participation rate among males aged 60–64 years is already increasing (reversing a prior 

trend). 

Dr. Fronstin referred the participants to the following EBRI Web sites, which offer 

visitors the facility to model the savings amount needed for health insurance and health 

care costs upon retirement: 

• www.ebri.org

• www.ourhealthbenefits.org

• www.choosetosave.org

• www.asec.org

Medigap 

Presenter: Tom Rice, Ph.D. 

University of California at Los Angeles

Dr. Tom Rice discussed measurement issues in Medigap insurance coverage. He 

presented key questions as a framework for his presentation. 

Who has Medigap coverage? Who does not? As Dr. Laschober’s presentation indicated, 

survey data provide good information on the prevalence of coverage among the elderly 

and the characteristics of individuals with and without coverage. Generally, the 

information on Medigap coverage is reliable. However, survey respondents might not 

know whether they own a Medigap product as defined by the research community. 

Investigators have changed the definition of Medigap products to only include 

individually purchased policies. Researchers do not consider employer-based coverage, 

13
participation in an HMO, or stand-alone policies (e.g., those covering only long-term

care; cancer policies) as Medigap products, but respondents probably do not make these 

distinctions. 

What benefits are contained in Medigap? Unfortunately, the data on the benefits offered 

by Medigap policies owned by elderly individuals are not very good. Dr. Rice 

commented that information on Medigap benefits held represents the largest data need in 

this area. Surveys report on a limited number of benefits covered by Medigap policies 

(e.g., prescription drugs and nursing home coverage). The information collected is 

probably not accurate because respondents are not aware of the benefits offered under 

their policies. As an example of the need to enhance the data, Dr. Rice focused on 

determining the number of elderly people with prescription drug coverage. Consumer 

surveys have typically reported that 20–30 percent of Medigap owners have prescription 

drug coverage. However, the actual figure is more likely about 10 percent. Data from 

the National Association of Insurance Commissioners (NAIC) show that 8 to 9 percent of 

standardized Medigap polices in force for 2001 were plans H, I, or J. The discrepancy 

between the 20–30 and 10 percent estimates are not due to high rates of prescription drug 

coverage before standardization of Medigap plans. In 1991, the year before 

standardization, only 13–14 percent of Medigap policies offered drug coverage. Several 

data enhancements are ongoing. For example, CMS now asks MCBS survey respondents 

to distinguish drug coverage and drug discount cards offered through various state 

pharmacy assistance programs. Improved data are an essential aspect of the debate on a 

Medicare drug benefit. 

Less is known about other benefits, so the data needs on the specific benefits held by 

Medigap policy owners are significant. NAIC might provide more accurate information 

on benefits, because it counts the number of Medigap policies (distinguishing plan letter 

A–J) sold by the insurance industry annually. There are some concerns with this 

potential approach to obtaining benefit data. NAIC data do not include individual 

information, which precludes linkage to enrollee characteristics. The data also are 

limited because they do not provide information on individual policy premiums. 

Although NAIC does calculate average premiums, researchers desire information at the 

individual level. The NAIC database does not include some large insurance carriers and 

is costly for non-academic researchers ($2,500 per year). 

What does Medigap cost beneficiaries? Information on policy premiums is available 

from consumer surveys and from state insurance department Web sites. These surveys 

provide reasonable estimates from policies that consumers have purchased. Although 

most state web sites offer premium information, not all states post policy premium data. 

CMS’s web site, Medigap Compare, does not provide premium information itself but 

rather links to state insurance department sites. 

What does Medigap cost Medicare? Medigap affects Medicare costs, because Medicare 

subsidizes Medigap premiums by inducing greater utilization. Medicare covers most of 

the increased utilization resulting from Medigap in a ratio of 4 to 1. It can be useful to 

estimate the subsidy and determine how much Medicare bears the cost of extra 

14
utilization. One can estimate the subsidy from generally available information by 

estimating the impact of policy ownership on utilization (controlling for other factors). 

Dr. Rice suggested that knowing the magnitude of Medicare’s subsidy of Medigap is an 

important area for future research and might provide a basis for critical policy decisions 

(e.g., taxation of Medigap). 

How does ownership of a Medigap policy affect health status? It is important to analyze 

the increased utilization brought about by Medigap coverage—the extra services used as 

a result of owning a Medigap policy. Further, it is critical for the field to determine how 

Medigap services affect the health status of the beneficiary. Researchers might obtain 

such information from the medical literature or from national surveys containing health 

status information. Endogeneity, the effect an individual’s health status has on the 

amount of coverage they seek, is a major challenge to this important area of investigation. 

The extra services used as a result of Medigap ownership might be related to the 

tendency for individuals with a need for more health services to buy Medigap policies. 

Although there are many confounding variables, it is critical to understand the 

relationship between supplemental insurance coverage and health status. 

Is the protection provided by Medigap adequate? Analysts can estimate the cost 

implications of the inadequacies of Medigap coverage. One approach is to develop 

utilization profiles of individuals with hypothetical diseases. An alternative approach is 

to use national surveys to examine out-of-pocket costs for people who own different 

types of supplemental coverage (controlling for other factors). Endogeneity presents a 

challenge to analysts taking these approaches. 

Medicare+Choice: Access and Benefits 

Presenter: Carlos Zarabozo 

Centers for Medicare & Medicaid Services 

Mr. Carlos Zarabozo described the Medicare+Choice program including enrollment 

requirements, access among the Medicare population, and the effect of geography on 

access. He explained the benefits offered by the program, changes in coverage, and 

premiums. Mr. Zarabozo identified the demographic profile of Medicare+Choice 

enrollees and future directions for the program. 

The Balanced Budget Act of 1997 (BBA) introduced the Medicare+Choice program as a 

replacement for the Medicare private health plan program in existence since 1985, the 

year in which Medicare implemented the risk contracting provisions of the Tax Equity 

and Fiscal Responsibility Act of 1982 (TEFRA). Under TEFRA, only Federallyqualified health maintenance organizations (HMOs) or a similar type of entity, 

competitive medical plans, could have Medicare risk contracts. The BBA extended 

Medicare to include “coordinated care plans,” defined as HMOs, preferred provider 

organizations (PPOs), and provider-sponsored organizations (PSOs). Although the BBA 

also specifically authorized coordinated care plans to have point-of-service (POS) 

options, Medicare had already permitted POS plans under TEFRA. The BBA also 

15
authorized medical savings account demonstration programs and introduced private feefor-service plans into the Medicare program. 

In the Medicare+Choice program, private health plans enter annual contracts with 

Medicare on a risk basis. The number of risk contracts and associated enrollment has 

decreased steadily to 148 contracts enrolling 11 percent of the population in 2003 from a 

peak of 309 contracts enrolling 16 percent of the population in 1999. 

Medicare beneficiaries with Part A and B of Medicare who reside in the service area of a 

health plan and do not have end-stage renal disease are eligible to enroll in

Medicare+Choice. The percentage of the Medicare population with access to at least one 

Medicare+Choice plan—including private fee-for-service plans—increased between

1993 and 2000 (from 49 to 84 percent), but that figure has dropped over the past 3 years 

to 79 percent. Access to Medicare coordinated care plans has declined from a high of 74 

percent of the total Medicare with access to at least one plan in 1998, to 59 percent in 

2003. Furthermore, the number of coordinated care plan options also has fallen recently. 

For example, the percentage of the Medicare population with four or more coordinated 

care plan options decreased from 50 in 1998 to 16 percent in 2003. Residents of rural 

areas do not have the same level of access to Medicare+Choice coordinated care plans as 

those who live in urban areas (about 13 percent compared with 72 percent respectively), 

and the choice of plans in rural areas is more limited. 

Plans participating in Medicare+Choice are required to provide the Medicare benefit 

package. They may charge a premium in lieu of cost sharing for Medicare-covered 

services (e.g., in lieu of Medicare’s 20 coinsurance for physician services). Plans may 

also have a combination of a premium and cost sharing for Medicare-covered services. 

CMS sets a dollar limit on a Medicare+Choice plan’s cost sharing for Medicare-covered 

services, representing the actuarial value of cost sharing that Medicare beneficiaries face 

in fee-for-service Medicare. However, the limit does not apply to the premium charged 

by private fee-for-service plans. For private fee-for-service plans, the limit applies only 

to any actual cost sharing (on a service by service basis) that the plan imposes. 

The majority of Medicare+Choice plans provide their enrollees with extra benefits. Such 

benefits include reduced cost sharing for Medicare-covered services (as is the case with 

“zero premium” plans that have no premium charge for enrollees), as well as the 

provision of extra health care benefits at no charge to enrollees. Perhaps the most 

significant extra benefit that plans provide is the coverage of outpatient drugs not covered 

by Medicare. 

The coverage of extra benefits has changed since the inception of Medicare+Choice in 

1997. Both cost sharing and premiums have increased, and some benefit erosion has 

occurred. For example, while in the early years of the TEFRA program, plans generally 

did not provide drug coverage, by 1998 the majority of plans provided generous drug 

coverage. However, the most recent trend has been towards reducing drug coverage. 

The percentage of the Medicare population with access to any coordinated care plan with 

drug coverage has fallen from 65 percent in 1999 to 50 percent in 2003. If PPO 

16
demonstration plans and private fee-for-service plans are included, 60 percent (an 

additional 10 percent) of the Medicare population had access to a private plan with drug

coverage in 2003. The level of drug benefits is diminishing, with the number of enrollees 

with no dollar caps on generic and brand-name drug coverage (i.e., unlimited drug 

coverage) declining significantly, and the percentage of beneficiaries with only generic 

drug coverage increasing. 

Most people who enroll in Medicare+Choice are lower-middle- to middle-income

beneficiaries reporting better health status. Hispanics are more likely to be 

Medicare+Choice enrollees than participants in fee-for-service plans. African Americans 

enroll in Medicare+Choice at a level similar to fee-for-service enrollment levels. 

Disabled individuals tend to enroll in fee-for-service plans at a higher level than 

coordinated care plans (about 18 percent of the fee-for-service population are 

beneficiaries entitled to Medicare because of disability (under age 65) compared with

about 7 percent in private plans). 

In the near term, analysts of the Medicare+Choice will examine disenrollment patterns 

and the effects of premium and cost sharing changes on beneficiary decisions to disenroll 

from plans or to newly enroll. There also is interest in enrollment patterns for the PPO 

demonstration plans and various other types of plans (including private fee-for-service 

plans and “sub-zero” plans, which are plans that offer a reduction in a beneficiary’s 

Medicare Part B premium as an extra benefit). The decreasing prevalence of employersponsored retiree health insurance highlights the need to monitor the status of employer 

Medicare+Choice arrangements. Investigators should examine the impact of general 

Medicare reforms, particularly the addition of a Medicare drug benefit and Medigap 

reform. Analysts also might identify the effects of competitively determined premiums

and benefits on the Medicare+Choice program. 

Mr. Zarabozo referred the participants to the following sources for more information on 

the Medicare+Choice program:

• Medicare Compare (or Health Plan Management System [HPMS]) 

• CMS Plan Information Control System (PICS) 

• Medicare Current Beneficiary Survey 

• Adjusted community rate proposals submitted by plans (proprietary information) 

• Monthly reports (enrollment, plan characteristics), penetration reports, geographic 

service area reports (posted at www.cms.gov) 

• Actuarial Research Corporation survey data (one-time only on employer group 

enrollment, individual choices) 

• Consumer Assessment of Health Plans Surveys, Health Outcomes Surveys, 

disenrollment surveys 

• Physician incentive plan reporting 

• CMS/SSA enrollment databases 

17
Medicaid Coverage Among Elderly People 

Presenter: Judith D. Kasper, Ph.D. 

The Johns Hopkins University Bloomberg School of Public Health 

Dr. Judith Kasper explained the importance of data on the elderly Medicaid population, 

described the characteristics of dual enrollees (individuals eligible for both Medicare and 

Medicaid health benefits), and identified key measures that will inform policy on health 

insurance for the elderly. 

The nation invests a great deal of resources in both the Medicare and Medicaid programs. 

The Medicaid population is vulnerable and has extensive health care needs. Many 

Medicaid beneficiaries are disabled, and almost 25 percent reside in nursing homes. Half 

of poor Medicare beneficiaries are dual enrollees. State and Federal Governments share 

the responsibility for dual enrollees. For all these reasons, this population is of special 

interest in current health policy discussions. 

A higher percentage of dual enrollees are over age 85 (17 percent) compared with the 

Medicare and general U.S. population (12 and 2 percent respectively). Dual enrollees 

represent 19 percent of Medicaid enrollment and 35 percent of Medicaid expenditures. In 

both the over-age-65 and over-age-85 categories, a higher percentage of dual enrollees

reside in nursing homes compared with other Medicare beneficiaries. The percentage of 

dual enrollees over age 85 in nursing homes is 55 percent compared with 13 percent of 

other Medicare beneficiaries. More dual enrollees have fair/poor health status and a 

higher number of limitations in activities of daily living compared with other Medicare 

beneficiaries. Finally, a higher percentage of dual enrollees are poor, with 71 percent 

having an annual income of less than $10,000. 

Medicare beneficiaries can be eligible for Medicaid through several pathways, based on 

income eligibility and an asset limit. By law, certain individuals are entitled to Medicaid. 

Individuals with an income at or below 73 percent of the Federal poverty level (the level 

for Social Security Insurance [SSI] income eligibility) and assets up to $2,000 are eligible 

for wrap-around Medicaid benefits and Medicare Part B premium and cost sharing 

through the SSI Cash Assistance pathway. However, States may set lower levels 

(invoking the 209b option) and have the authority to expand the income level for SSI 

Cash Assistance to 100 percent of the Federal poverty level. Individuals categorized as 

QMBs with an income at or below 100 percent of the Federal poverty level and assets up 

to $4,000 are eligible for Medicare Part B premium and cost sharing. Individuals 

categorized as SLMBs with an income at 100–120 percent of the Federal poverty level 

and assets up to $4,000 are eligible for the Medicare Part B premium. 

Medicare beneficiaries may be eligible for Medicaid if they are medically needy—

individuals who spend their income down to a specified level and assets up to $2,000—

but the benefits may be more limited than those provided under SSI Cash Assistance. 

Individuals in institutions with an income at or below 300 percent of the SSI level and 

assets up to $2,000 are eligible for wrap-around Medicaid benefits and Medicare Part B 

premium and cost sharing under the Special Income Rule for Nursing Home Residents. 

18
Individuals who would be eligible if they resided in an institution but remain in the 

community are eligible for home- and community-based services. 

To address policy issues for dual enrollees, analysts need to monitor use and expenditures 

to determine the unmet needs of this resource-intensive and vulnerable population. Good 

information is needed about Medicaid coverage, because the program fills in Medicare’s 

gaps. For example, information on copayments/deductibles and services not covered by 

Medicare (especially long-term care and medications) would be instrumental in 

improving Medicaid’s services. Analysts should monitor the effects of state policy 

changes driven by budget constraints. For example, budget constraints might result in 

gains in community-based care options or reduced access to vital services (e.g., 

medications). Investigators should examine the effects of such state policy changes on 

health outcomes and family functioning. 

Given the informational needs described above, a key measurement issue is identifying 

elderly dual enrollees. The identification of elderly dual enrollees through surveys is 

problematic for several reasons. Respondents tend to underreport Medicaid because they 

confuse it with Medicare. Survey participants are generally unable to identify themselves 

as a QMB or SLMB and may not be aware of the sources of their Medicaid eligibility 

such as the HCBS waivers. Determining whether individuals have full Medicaid benefits 

also is complicated. Many people receiving full benefits do not receive SSI, including 

some nursing home residents, and persons covered under home- and community-based 

waiver programs. 

Another key measurement issue is obtaining information on home-and community-based 

long-term care. Long-term care provides a wide range of services that includes in-home 

personal care, home and vehicle modifications, assistive devices, respite services for 

caregivers, case management, and psychiatric rehabilitation. Analysts need information 

on the use of these services and sources of payment to assess the role of Medicaid, and 

the overall effectiveness and costs of long-term care services. 

The current approaches to measurement link survey data and Medicare enrollment files 

for the elderly population, which facilitates the identification of dual enrollees. Although 

surveys are a source of information on Medicaid-covered services and sources of 

payment, it currently is not feasible to link national, population-based survey data and 

Medicaid files. Current measurement approaches have not solved the problem of 

identifying different eligibility groups (e.g., QMB, SLMB, and full benefits). 

Trends in Prescription Coverage of Medicare Beneficiaries, 1996 to 2000: 

It Depends on How Benefits are Measured 

Presenter: Bruce Stuart, Ph.D. 

University of Maryland School of Pharmacy

Published estimates of the proportion of Medicare beneficiaries with various types of 

prescription coverage vary widely. The discrepancies are not due to different data 

sources—virtually all estimates are based on the MCBS. Wide discrepancies arise 

19
because there is no standardized method for measuring prescription coverage in the 

MCBS. 

Dr. Bruce Stuart described the various approaches that analysts use to measure 

beneficiary drug coverage using MCBS data and demonstrated the differences in 

estimated coverage rates for 1996 and 2000 based on the various approaches. He 

discussed the policy implications of using the various measurement methods. It is 

important to note that all coverage estimates derived from the MCBS address the noninstitutionalized Medicare population. Although there is some information on Medicare 

beneficiaries in nursing homes, there is a general lack of data on insurance coverage for 

elderly individuals in institutions. 

Estimates of prescription drug coverage among Medicare beneficiaries are highly 

sensitive to basic measurement issues. The duration of coverage affects estimates. In 

2000, 21 percent of non-institutionalized Medicare beneficiaries had no drug coverage,

18 percent had part-year coverage, and 61 percent had full-year coverage. The 

percentage of non-institutionalized Medicare beneficiaries with drug coverage in the fall 

is lower than those covered at anytime during the year (e.g., 62 compared with 74 percent 

in 1999). Point estimates for the fall rounds are available through the MCBS Access to 

Care files. Multiple-round estimates (over three rounds of the survey) are also available 

from the MCBS Cost and Use files. Multiple-round estimates are used to construct 

annual coverage estimates. It is possible to develop longer-term duration of coverage 

estimates by linking two or more years of MCBS Cost and Use files. 

Estimates of prescription drug coverage among Medicare beneficiaries also are affected 

by the strength of self-report data compared with inferences drawn from service activity. 

The MCBS asks detailed questions about Medicare supplemental health insurance for up 

to five private plans. It collects data on start and end dates and whether the plan provides 

prescription benefits. Some beneficiaries report that they have coverage but are unsure of 

the source. Others report that they have no coverage, but a review of their servicesummary data on self-reported medication events suggests third-party payment. When 

the percentage of beneficiaries with coverage is measured using the MCBS plus servicesummary data, the proportion is higher compared with data collected from only the 

survey. 

Whether beneficiaries with multiple policies are counted also complicates the estimates 

of prescription drug coverage. Although most beneficiaries with drug benefits rely on a 

single source of coverage with defined periods of entitlement (67 percent in 2000), some

beneficiaries rely on two or more sources of prescription coverage with overlapping 

periods of entitlement. 

Beneficiaries with sequential coverage move from one to another source of benefits with 

or without a gap in coverage. Other beneficiaries have sporadic coverage—they make 

occasional use of one or more sources of drug benefits with unknown periods of 

entitlement. Another group of beneficiaries reports having private drug coverage, yet 

there is no evidence of a specific payer from the service summary records. In 2000, 12 

20
percent of non-institutionalized Medicare beneficiaries had multiple sources of coverage 

or ill-defined coverage. This percentage is significant enough to affect estimates of 

prescription drug coverage. 

New retirees are increasingly at risk for lack of prescription drug coverage. Employersponsored health insurance is generally considered the most stable form of private 

prescription coverage for eligible Medicare beneficiaries. The number of employers 

offering retiree coverage is declining, yet overall rates of employer-sponsored health 

insurance reported in the MCBS have remained stable. This seems like a paradox, but it 

reflects two offsetting demographic trends —declining retiree coverage among younger 

Medicare beneficiary population (ages 65–69) and increasing rates of coverage among 

older beneficiaries (an artifact of the very low rates of retiree coverage among decedents). 

The percentage of the younger Medicare beneficiary population with retiree health 

insurance, and drug coverage in particular, fell by about 5 percent from 1996 to 2000. 

Dr. Stuart noted that almost all of the declines in prescription drug coverage occurred 

among males receiving health benefits from their own policies. The data indicate that 

many men in the younger Medicare beneficiary population now have prescription drug 

coverage from their spouses. The overall decline in employer-sponsored health insurance 

among retirees and the need for prescription drug coverage have significant implications 

for workforce trends. 

Long-Term Care Insurance: The Data Challenge 

Presenter: Marc A. Cohen, Ph.D. 

LifePlans, Inc.

Dr. Marc Cohen summarized the current information on long-term care insurance and the 

long-term care insurance market. He highlighted data challenges regarding 

benchmarking of market growth, claims payments, and policyholders. Good data in this 

area rely on the advancement of accurate tracking mechanisms. The field seems to be 

moving in the right direction, but demographic trends indicate a need to facilitate the 

accurate measurement of long-term care coverage. 

Long-term care insurance policies typically reimburse the costs associated with skilled 

and custodial care services performed by a variety of providers, such as nursing homes 

and assisted living centers, home care agencies, and adult day care. Most long-term care 

insurance is sold to individuals, but employment-based plans are growing dramatically. 

Currently, long-term care policies feature reimbursement of the costs of chronic care in 

both institutional settings and home and community-based care. Beneficiaries have

access to a pool of benefits based on measurable and observable levels of disability. 

Most policies include inflation-protection features and care management and make 

lifetime coverage available. Insurers are moving toward rate guarantees and the 

stabilization of rates. 

The long-term care insurance market is growing rapidly. To date, companies have sold 

more than 8 million policies and an estimated 7 million individuals have long-term care 

21
coverage. The premium volume of long-term care policies is greater than $5 billion per

year. From 1987 to 2001, the annual rate of growth has been 18 percent. About 100 

companies offer long-term care policies, so the market is competitive. However, the 

market is somewhat consolidated, with 20 companies accounting for more than 80 

percent of policies. There have been more than 250,000 applications for the long-term 

care insurance program offered to Federal employees. Despite the growth of the private 

long-term care insurance market, these policies pay less than 10 percent of the U.S. longterm care costs. 

The target market for long-term care insurance comprises middle- to upper-income

elderly individuals who would not immediately qualify for Medicaid. This group 

represents between 25 and 35 percent of the elderly population. People who purchase 

long-term care insurance tend to have few available informal supports or worry about not 

having them at the potential time of need. A growing number of younger adults view 

long-term care insurance as an integral part of retirement planning. The optimum age for 

purchasing a long-term care policy is between age 55 and 60. 

There is a great deal of untapped market potential for long-term care insurance, and 

analysts expect continued growth in sales. The current public policy environment 

encourages growth in the market. Given the demographic trends, long-term care 

insurance will play a growing role in financing the nation’s health care costs. Until 2001, 

companies had paid out $5.6 billion in long-term care claims. However, claims are now 

running at $1 billion per year and growing rapidly. 

The growing demand for long-term care insurance indicates a need to include it in the 

measurement of supplemental insurance coverage for the elderly. Private sources of 

information about long-term care insurance include industry associations such as the 

Health Insurance Association of America’s annual surveys and sponsored studies. The 

Life Insurance Marketing Research Association also studies long-term care insurance 

activity. The Society of Actuaries sponsors various intercompany studies, and private 

research firms also investigate the dynamics of the long-term care insurance market. 

Public sources of information about long-term care insurance include specialized studies 

sponsored by the Department of Health and Human Services and the Robert Wood 

Johnson Foundation. Only one national survey, the Assets and Health Dynamics Among 

the Oldest-Old, focuses on long-term health insurance coverage. Unfortunately, the 

prevalence rates observed by this survey did not accord with data from insurers. 

Estimating the prevalence for long-term care insurance policy ownership is challenging. 

Respondents often demonstrate confusion about their current coverage for long-term

care. About 40 percent of individuals over age 55 believe, mistakenly, that their current 

health insurance pays for, or they do not know who would pay for, long-term care. Many 

respondents identified their health insurance carrier as their long-term care insurance 

provider even though many of the identified carriers did not provide the insurance. There 

also is confusion about the payer for services. The national records of insurance 

companies sometimes categorize a payment made to a beneficiary who then pays a 

provider as an “out-of-pocket” payment. Thus, it can be difficult to separate out what 

22
beneficiaries actually pay for such services. Reliable payment data could come from

industry claims payments, which are reported at the state level. 

In conclusion, Dr. Cohen stressed that long-term care insurance is growing. There is a 

need to collect reliable and detailed information on the market, the product, and its uses. 

Current data collection efforts do not adequately capture prevalence data. Therefore, the 

field should identify the appropriate recurring national survey to address long-term care 

insurance coverage. Investigators might modify the survey to include questions specific 

to long-term care and develop a strategy to verify self-report data. The field will need to 

overcome challenges related to confusion about current coverage for long-term care. 

Public education on long-term care should make national data collection efforts more 

reliable. 

Morning Question-and-Answer Session and Discussion 

Dr. Steven Cohen asked Dr. Fronstin about the uncertainty bounds on premium estimates 

for the EBRI model presented. Dr. Fronstin replied that model developers did not have 

time to generate a data set on Medigap premium estimates. Rather, they selected certain 

states for specific purposes. The model is available on the Web so users can enter 

different premium estimates into the model. The AARP health care Web site provides 

useful premium information for different markets. Dr. Cohen asked for clarification as to 

whether the current proposed individual tax credits for retiree contributions toward health 

insurance would assist Medicare beneficiaries with Medigap coverage. Dr. Fronstin 

commented that the proposals are designed to expand coverage among uninsured 

individuals and do not cover supplemental insurance. 

In response to a participant’s question, Dr. Rice noted that it is difficult to determine the 

extent to which drug coverage estimates reflect selective renewal of older Medigap 

policies (i.e., ones bought before plan standardization). It is possible that some

proportion of Medicare beneficiaries hold policies from the prestandardization period, but 

the drug benefits from those policies were not generous so it is unlikely that most people 

would keep them. 

The participants discussed the great need for accurate data on prescription drug coverage 

among the elderly. The current context for insurance coverage is dynamic, with many 

changes occurring in the past 5 years. Multiple sources of coverage for an individual 

present a challenge in the translation of data to policy. Knowing how individuals 

coordinate their insurance coverage would facilitate the creation of a database comprising 

multiple data sources. Analysts need access to a synthesis of all data sources to measure 

coverage in an environment of multiple coverage sources. 

Dr. Steve Cohen stressed the need for more information on the interaction of policy and 

individual characteristics (e.g., socioeconomic status). Although there are several 

potential vehicles to advance such information, those vehicles have problems with scale 

and response rates. The field requires a creative approach to generating information that 

23
will support policy analysis. Statistical standards would ensure the integrity of the data 

sources underlying policy. 

Dr. Kasper emphasized the difficulty of keeping data systems current in a dynamic 

insurance environment. New Medicaid programs add to the complexity. For example, 

states may use savings from the Medicaid program to purchase drug coverage. Some

states have done so, but others have not. Many states are implementing new programs, 

which has implications for insurance data systems. 

Dr. David Weir noted that access to information on health care insurance and pension 

benefits is limited. Information on pensions can be obtained from firms, but federal rules 

restrict the disclosure of health insurance information. Dr. Fronstin commented that the 

level of access depends on the information sought. Although it is a slow process, 

researchers can obtain data from employers and financial service organizations on plan 

participants. 

Dr. Scott Harrison, of the Medicare Payment Advisory Commission, asked Dr. Fronstin 

to estimate the percentage of non-public-sector employees with retiree health insurance 

coverage. Dr. Fronstin replied that such estimates were difficult to determine. Many 

individuals do not know whether they qualify for such benefits. Further, a dynamic 

workforce with a high job turnover contributes to a lack of awareness about benefits. 

However, most experts believe benefit knowledge will increase among workers. EBRI 

has not attempted to estimate the number of future workers without employer-sponsored 

retiree health insurance, but there is no doubt that the prevalence of such coverage will 

decrease. Dr. Harrison wondered if workers receive other benefits to compensate for the 

lack of a retiree health insurance benefit. Dr. Fronstin noted great variability among 

employer benefits. It is much easier for employers to cut retiree health insurance benefits 

for future retirees compared with current retirees who have promises of coverage in 

writing. In general, companies that have successfully cut health benefits among current 

retirees have not offered other benefits in compensation. 

A participant commented that Medicaid eligibility is inconsistent across states. States 

differ in asset examination aggressiveness. Some elderly people deplete their assets to 

levels that make them Medicaid-eligible. Dr. Kasper acknowledged the state variation in 

Medicaid eligibility groups. Individuals who spend down their assets would fall into the 

medically needy category, yet only 36 states have Medicaid programs for this group. Dr. 

Kasper emphasized the need for longitudinal studies on the medically needy population. 

The MCBS and MEPS have followup periods of 3 and 2 years respectively, but 

longitudinal data are essential to understanding the relationship between health care 

insurance and asset depletion. Most studies on medically needy individuals focus on 

particular special populations. 

Dr. Kasper also commented that state variation adds to the complexity of data collection 

and analysis. During times of budget constraints, states change their programs to address 

financial shortfalls. National population-based surveys are key insurance data sources, 

24
but their samples are not drawn at the state level. Thus, analyzing the effects of different 

state policies is a challenge. 

Dr. Rice focused on the data sources that permit analyses of prescription drug coverage 

adequacy. Most researchers use survey data and examine out-of-pocket expenditures as a 

measure of coverage adequacy. However, the appropriate interpretation of low-level 

expenditures is not clear. Drug coverage offered in the private market varies, and it is 

difficult to determine benefit generosity from out-of-pocket spending estimates. 

Additionally, the generosity of drug benefits has decreased over the past few years. Data 

systems must be able to measure the adequacy of coverage in an insurance context where 

quality is changing in a nonuniform way. A participant added that there is no consensus 

on the appropriate level of beneficiary burden for prescription drug costs. 

Mr. Jon Gabel asked about the availability of data on the loss ratio and actuarial value of

long-term care policies (i.e., the amount of benefits received from the policy compared 

with how much has been paid into it). Dr. Marc Cohen commented that such issues are 

regulated at the state level, thus data are available from NAIC. Most states require longterm care policies to pay a certain amount (usually 60–65 percent) of premiums out in 

benefits. Therefore, states require insurance companies to pay 60 to 65 cents in benefits 

for every dollar paid in premiums. Loss ratios are public information, but as lifetime 

ratios, they are difficult to determine. 

A participant inquired about the gender difference in prescription drug coverage among 

new retirees aged 65–69 years. Dr. Stuart commented that the data showing constant 

coverage for women but not men were preliminary. His research team is following up on 

some well-known changes in labor market participation rates among individuals aged 65–

69 years. He remarked that their goal is to develop additional data sources that predict 

who receives benefits and the sources of those benefits. 

Dr. Marsha Gold focused on the implications of part-year insurance coverage as reported 

in the MCBS. Generally, Medicare beneficiaries do not change policies, so it is possible 

that some are reporting part-year coverage because they have reached their benefit limit 

rather than because they lack coverage. Dr. Stuart commented that the only way to 

obtain information on the duration of coverage is to compare plan start and end dates. 

Although those two data elements are not validated, the start- and end-date patterns seem

to reflect actual changes in coverage (i.e., changing plans and gaps in plans). The most

common days for changes are at the end and middle of the year when people are allowed 

to change their plans. Further, the shifts correlate with payment data. People change 

health insurance plans more frequently than most policymakers think. Mr. Zarabozo 

added that many beneficiaries in the Medicare+Choice program disenroll rapidly, which 

might account for some of the observed coverage instability. 

Dr. Steve Cohen thanked the presenters for crystallizing the major policy issues and 

identifying data needs. He encouraged them to contribute recommendations for 

Chartbook health insurance indicators during the afternoon session. 

25
Afternoon Session 

Commissioned Papers, Discussants’ Remarks 

And Closing Comments 

Jon R. Gabel, M.A., Health Research and Educational Trust (Session Chair)

John L. Czajka, Ph.D., Mathematica Policy Research, Inc. (Paper Author)

Deborah J. Chollet, Ph.D., Mathematica Policy Research, Inc. (Paper Author)

Pamela Farley Short, Ph.D., The Pennsylvania State University (Discussant)

Jeannette Rogowski, Ph.D., RAND (Discussant)

Melinda Beeuwkes Buntin, Ph.D., RAND (Discussant)

Mr. Jon Gabel introduced the panel members and described the afternoon agenda. The 

facilitated discussion focused on short- and long-term data needs and measurement issues 

facing the Federal statistical system. Panelists and participants from Forum member 

agencies discussed data activities related to health insurance for the elderly. Conference 

organizers intended the discussion to assist the Forum in developing recommendations 

for health insurance coverage measures for its Chartbook. 

26
27

Data Sources and Measures of Coverage and Benefits 

John Czajka, Mathematica Policy Research 

Paper prepared for the 

Health Insurance for the Elderly: Issues in Measurement Workshop, April 2003 

 

Sponsored by the Federal Interagency Forum on Aging-Related Statistics 

And the Agency for Healthcare Research and Quality 

April 29, 2003, Washington, DC 

Suggested citation: Czajka, John. “Data sources and measures of coverage and benefits.” In Potter, D.E.B., 

and Vistnes, Jessica (editors). Health Insurance for the Elderly - Issues in Measurement Workshop, April 

2003: Meeting Summary, Commissioned Papers and Discussant’s Remarks. Agency for Healthcare 

Research and Quality Working Paper No. 06003, March 2006, http://www.gold.ahrq.gov. 

AHRQ Working Papers provide preliminary analysis of substantive, technical and methodological issues. 

The papers are works in progress and have not undergone a formal external peer review. They are 

distributed to share valuable experience and research. Comments are welcome and should be directed to 

the authors. The views expressed are those of the authors and no official endorsement by the Agency for 

Healthcare Research and Quality, the Department of Health and Human Services, or the member Agencies 

of the Federal Interagency Forum on Aging Related Statistics is intended or should be inferred. 

Corresponding author: 

John Czajka 

Research Division 

Mathematica Policy Research 

600 Maryland Ave., SW, Suite 550 

Washington, DC 20024-2512 

E-mail: jczajka@mathematica-mpr.com
 

28

 

Introduction 

In striking contrast to the 12 percent of children and 50 percent of poor full-time workers who 

lack any form of health insurance, the very low uninsured rate among the nation’s elderly 

population, measured at 1 percent in recent surveys, attracts little attention.1

 Indeed, it is quite 

common for health policy researchers to report uninsured rates that exclude the population 65 

and older. Yet this low uninsured rate among the aged draws attention away from two important 

facts: (1) not all of the aged are covered by Medicare, and (2) most of those who are covered 

find it necessary to supplement their Medicare coverage with one or more other forms of 

insurance. 

This paper examines issues related to the measurement of health insurance coverage and benefits 

among older Americans, reviews the most promising data sources, and presents 

recommendations regarding the specification of indicators of coverage and the establishment of 

priorities for data development. These recommendations are addressed to members of the 

Federal Interagency Forum on Aging-Related Statistics (The Forum), which sponsored the paper. 

The next section presents basic information on health insurance among the elderly and discusses 

implications for measuring coverage and benefits. We then give an overview of the principal 

data sources on health insurance for this population. Next we assess what these data can tell us 

about health insurance for the elderly and present some illustrative statistics. Finally, we present 

recommendations for possible expansion of the indicators of health care used in the Forum’s 

chart book on older Americans and discuss priorities for data development to better address the 

measurement needs that we have identified. 

Health Insurance Coverage and Benefits Among 

The Elderly: Implications for Measurement 

Persons who have established eligibility for social security or railroad retirement benefits at age 

65 become eligible for Medicare, whether or not they elect to begin receiving retirement income. 

With Medicare eligibility they are entitled to receive Hospital Insurance (HI), also known as Part 

A, at no cost and can purchase Supplemental Medical Insurance (SMI), or Part B, at a low 

monthly premium, which is deducted from their retirement income checks if they receive them. 

Aged citizens and permanent residents who are not eligible for Medicare can buy into Part B 

with a larger premium, and those who do so can also purchase the Part A coverage that they were 

not entitled to receive for free. Previous estimates indicate that, including those who buy in, 

between 95 and 97 percent of the aged are covered by Medicare. 

A comparison of the most recent decennial census data and Medicare administrative data for the 

same period is consistent with these estimates. Of the 35.0 million elderly U.S. residents 

enumerated in the 2000 census, Medicare administrative data indicate that 33.5 million or 95.9 

percent were covered by Part A or B, and 31.8 million, or 90.9 percent, were covered by both 

1

 Estimates are from the March 2002 Current Population Survey (U.S. Census Bureau 2002). 
 

29

 

(Table 1).2 The flip side is that 4.1 percent of the aged were either ineligible or chose not to 

purchase the Medicare coverage that was available as a buy-in, and another 3.8 percent limited 

their Medicare coverage to the Hospital Insurance that was provided at no cost. 

Medicare and Supplemental Coverage 

While 90.9 percent of the aged carry full Medicare coverage, Medicare benefits are significantly 

more limited than the benefits that younger persons obtain from their private and government 

health plans. In addition to paying higher coinsurance and deductibles and, in some cases, 

doctors’ charges above Medicare-approved amounts, Medicare beneficiaries receive fewer 

services. In particular, Medicare does not cover most outpatient prescription drugs; nor does it 

cover general preventive care, both of which are common features of health insurance coverage 

among the nonelderly.3

 And while relatively few plans routinely provide younger persons 

coverage for dental and vision care, hearing aids, and long-term care, their exclusion from 

Medicare coverage is far more significant because of the larger fraction of Medicare 

beneficiaries who have need for such services. 

Because of these limitations in what Medicare covers, most aged Medicare beneficiaries 

supplement their Medicare coverage with additional coverage—principally from private sources. 

In doing so they have a number of options. They can purchase, from private insurers, “Medigap” 

policies that supplement the basic Medicare coverage in various ways. There are 10 standard 

Medigap policies, which are identified by the letters A through J, and an individual insurer may 

offer one or more of these plans.4

 Table 2 summarizes basic features of these plans, which 

enrolled about 11 million Medicare beneficiaries in 2001. Note that only three plans provide 

prescription drug coverage, and only two plans cover general preventive care. 

An alternative to purchasing a Medigap policy, depending on where a person lives, is to enroll in 

a managed care plan that provides the basic Medicare benefits with reduced coinsurance costs 

and deductibles and may include additional services. The Balanced Budget Act of 1997 

established the Medicare+Choice program, which formalized arrangements that were developed 

as demonstrations between the Medicare program and a number of Health Maintenance 

Organizations (HMOs) and encouraged the provision of Medicare services through other types of 

managed care organizations. Enrollment in Medicare+Choice, which encompasses nearly all of 

the managed care offered under Medicare, reached 6.3 million in 1999 but then fell off, dropping 

below 5 million by 2002 (Gold 2003). 

Elderly persons who are still employed may choose to remain covered by private insurance 

obtained through their employers. In addition, some employers provide health insurance benefits 

to their retirees. Medicare assumes the role of secondary insurer as soon as these employees and 

2

 These estimates assume that all decedents have been removed from the Medicare counts. If some decedents 

remain, the estimates will overstate Medicare coverage by a slight amount. 

3

 Coverage for routine mammography screenings was introduced in 1991. Coverage was extended in 1997 to 

include a set of additional specific preventive services—mostly related to cancer screening (Social Security 

Administration 2001). 

4

 A substantial fraction of Medicare beneficiaries with Medigap coverage still have policies that predate these 10 

standard plans. 
 

30

 

retirees become eligible while the private plan remains the primary insurer. What this means to 

the employee or retiree will depend on the individual plan. For example, aged military retirees 

may qualify for TRICARE for Life, which Congress legislated in 2000 and which provides 

particularly good benefits, including prescription drug coverage. Other retiree plans may not be 

as generous. 

Low-income aged may qualify for Medicaid, which provides nursing home coverage and 

prescription drug coverage to dual eligibles in most states. Nursing home residents with 

sufficiently low income but with assets above a state limit may have to spend down their assets 

to qualify for the nursing home benefits. Some states supplement their Medicaid programs with 

their own health insurance programs that have higher eligibility levels but provide less generous 

benefits—often limited to specific services. A number of states have pharmaceutical programs 

for the low-income aged, for example. 

Elderly Persons without Medicare Coverage 

The 4 percent of elderly persons without Medicare coverage are ineligible because they or their 

spouses accumulated too few credits for employment covered by the social security, railroad, or 

civil service retirement systems. In addition, they were either ineligible to buy in to coverage, 

being neither citizens nor permanent residents, or elected not to do so—perhaps because of the 

cost or because they had other coverage. Survey data suggest that 20 to 25 percent are 

uninsured, although there is reason to suspect that this may be an underestimate, as we discuss 

below.5

 For the remainder, the private or public coverage that they purchase or qualify to receive 

constitutes their primary insurance. 

Implications for Measurement 

To provide an adequate summary of health insurance coverage among the elderly requires that 

we know, first, who has Medicare coverage and who does not. Among those who do have 

Medicare coverage, we need to know who has both Part A and Part B and who has only one of 

the two—particularly just Part A. It would also be useful to know who among those with Part B 

acquired such coverage by buying in rather than qualifying for retirement benefits. 

Next, we would like to know how many Medicare beneficiaries elected to supplement their 

coverage with additional coverage from another source—and what source. How many chose to 

purchase a Medigap plan, and how many opted instead to enroll in a managed care plan under 

Medicare+Choice? What fraction of beneficiaries qualified to receive supplemental coverage 

under Medicaid or a state plan, and what fraction obtained coverage through an employer 

(current of former) or a direct purchase? 

Among those without Medicare coverage, how many were ineligible to buy in, and how many 

were eligible but chose not to do so? How many of each group obtained coverage from another 

source, and how many were simply uninsured? For those who obtained coverage, how were the 

5

 The March 2002 Current Population Survey estimated an uninsured rate of .8 percent among the elderly. The 1999 

National Health Interview Survey estimated 1.0 percent. 
 

31

 

sources of coverage distributed, and how did this distribution differ across the two groups? In 

particular, how important was Medicaid? 

For those with Medicare and those without, what did their basic and supplemental coverage 

provide? In particular, how often did it include prescription drug benefits, and what did these 

benefits cover? How often were expenses for long-term care covered; what did this coverage 

include; and how did this vary across plans? 

Integration Issues 

Finally, with many of the aged holding coverage from two or more sources, and some receiving 

their health care benefits from facilities operated by the Department of Veterans Affairs, the 

integration of services becomes an issue that is present to only a very limited degree among the 

nonelderly population, where it occurs mainly among couples with both partners holding family 

coverage. Are there factors that affect awareness of or full utilization of benefits? Estimates of 

how many older persons have coverage from various combinations of sources would reveal the 

potential for such issues to develop. 

Principal Data Sources on Health Insurance 

For The Elderly: An Overview

There are a number of federal and privately sponsored surveys that collect data on a recurring 

basis on the health insurance coverage of the aged population. Most of these surveys cover the 

general population, but some have a much narrower focus that gives prominence to the aged. 

We reviewed all of these surveys for their ability to provide the information on health insurance 

coverage and benefits outlined in the preceding section. From these surveys, we identified four 

that collect much of the information that we discussed. These four surveys are the Medicare 

Current Beneficiary Survey, the Health and Retirement Study, the National Health Interview 

Survey, and the Medical Expenditure Panel Survey. Surveys judged less useful for examining 

the health insurance coverage and benefits of the elderly were the March supplement to the 

Current Population Survey, the Survey of Income and Program Participation, the Community 

Tracking Study, the Panel Study of Income Dynamics, and the National Long-term Care 

Survey.6

 

Administrative data from the Medicare program also have a role to play in assessing the health 

insurance coverage of the elderly. These data are a source of very precise estimates of the 

number of aged who are enrolled in the Medicare program, the type of coverage they hold, the 

basis for their eligibility, and their ages and geographic dispersion. Medicare also collects 

voluminous cost and payment data. Data from Medicare administrative records are routinely 

linked to sample members in the Medicare Current Beneficiary Survey to enrich the database for 

analysis and provide a resource for validating and editing a number of the data items collected in 

the personal interviews. 

6

 The National Long-term Care Survey, which collects data from a sample of aged Medicare beneficiaries with 

chronic functional impairments, is particularly well suited to research on the health care needs and services 

received by older persons with disabilities. 
 

32

Considerations Regarding Survey Samples 

In addition to the survey content, the quality of the questions used to elicit the information 

collected from the respondents, the mode of administration, and whether responses are validated 

in any way, several characteristics of a survey sample are important in assessing the overall 

strength of the survey as a source of estimates of the health insurance coverage of the elderly. 

These include the size of the elderly sample (number of observations 65 and older), whether or 

not the institutional population is included, the response rate among the elderly and, closely 

associated, the coverage of this population. The size of the elderly sample is either readily 

available or can be estimated with reasonable accuracy from the total sample size and an 

independent estimate of the aged share of the survey universe. Similarly the inclusion of the 

institutional population, who made up about 5 percent of the elderly at the time of the 2000 

census, is easily discerned from the survey description. Elderly response rates and population 

coverage are not usually reported, however. The overall response rate may provide a good 

indication, but to the extent that the aged are more cooperative than younger sample members, 

the overall response rate will tend to underestimate the elderly response rate. 

Population coverage refers to the completeness of the sample frame and the listing of individuals 

within housing units. Omissions from either will contribute to an understatement of the 

population. Coverage is sometimes assessed, if at all, by comparing population controls used in 

weighting to preliminary survey estimates of the population (broken down by age, race, and sex, 

typically) immediately prior to the application of these controls. Caution is advised in 

interpreting such coverage estimates, however. The demographic characteristics of 

nonrespondents are often not known, making the nonresponse adjustment process less than 

perfect, and this may result in coverage estimates that overstate or understate the survey 

coverage of particular demographic groups. 

Medicare Current Beneficiary Survey (MCBS) 

The MCBS is an ongoing survey of a representative sample of Medicare beneficiaries. The 

survey is longitudinal, with an overlapping panel design. A new panel is introduced each fall, 

drawn from the administrative records of Medicare beneficiaries enrolled as of January 1. The 

members of each panel are interviewed 12 times over a four-year period. The survey collects 

data on the expenditures and sources of payment for services; health insurance coverage; 

changes in health status; and the impact of program changes. Data released from the survey 

utilize the overlapping panel design by including information collected from all four panels 

active at one time. Administrative data from Medicare records are combined with the survey 

data in order to assemble the most accurate information available on beneficiary status and a 

number of outcome variables (Centers for Medicare & Medicaid Services 2002). Plan names are 

collected for all forms of insurance coverage, creating at least the possibility of editing coverage 

and adding plan characteristics. 

Because the MCBS sample is drawn from Medicare records, undercoverage is not an issue. But 

as a survey of beneficiaries, the MCBS does not represent non-beneficiaries—an estimated 4 

percent of the aged, as we have noted. Furthermore, while coverage is not a problem, 

nonresponse is an issue that had to be addressed. The survey sample is sized to take into account 

both the initial nonresponse and the cumulative attrition due to refusals, loss of contact, and 
 

33

mortality. Each new panel includes about 6,000 members in order to maintain an ongoing 

annual sample of more than 16,500 interviewed beneficiaries (of whom about 14,000 are aged) 

spread across the four panels. The rotating panel design eliminates a potential trend bias from 

the cumulative nonresponse within panels. 

The survey is conducted under contract by Westat. Interviews are conducted in person with 

laptop computers, using the Computer Assisted Personal Interviewing (CAPI) methodology. 

Beneficiaries living in institutional settings are included in the initial sample, and 

institutionalized sample members are included in all interview rounds, with facility staff 

providing the responses to a separate interview protocol. The survey also includes periodic 

supplements designed to address specific analytic issues, as funds permit. Data from the survey 

are released in two types of files: (1) an Access to Care file, which includes health insurance 

coverage and other data collected in the fall of each year (rounds 1, 4, 7, and 10 for the four 

panels) and is representative of those enrolled continuously during the year and (2) a Cost and 

Use file, which contains one, two, and three years of data from the four panels and is 

representative of those ever enrolled during the year. 

Health and Retirement Study (HRS) 

The HRS, which is also a panel study, is sponsored by a consortium of federal agencies led by 

the National Institute on Aging and is conducted by the Institute for Social Research at the 

University of Michigan. The HRS began with a sample of households containing at least one 

individual born between 1931 and 1941. Sample members were first interviewed in 1992 and 

have been reinterviewed every two years since. A second cohort of “war babies,” born 1942 to 

1947, was added in 1998. A companion survey, the Asset and Health Dynamics Among the 

Oldest Old Survey (AHEAD), was started in 1993 with a sample of persons born in 1923 and 

earlier. A third HRS cohort of “children of the depression,” born from 1924 through 1930, was 

introduced in 1998 to fill the gap, and all of the cohorts have since been shifted to the same 

interview schedule to facilitate pooling of the data across cohorts. With these additions the 

HRS/AHEAD sample is representative of the U.S. resident population born before 1948—that is, 

50 and older in 1998. Sample members will be interviewed every two years. The sample 

interviewed in 2000 included between 11,000 and 12,000 persons 65 and older. Response rates 

of eligible individuals in the first round of interviews ranged between 70 and 82 percent over the 

four cohorts. The response rates for reinterviews have been between 92 and 95 percent. 

Over time the representativeness of the HRS sample will diminish slightly, as there is no 

mechanism for adding birth cohort members who migrated to or returned to live in the U.S. after 

the sample for that cohort was drawn. In addition, people who enter institutions are retained in 

the sample but are not interviewed for as long as they remain institutionalized. But in 2004 a 

sample of persons born in the six years preceding 1948 will be added to the survey, and this type 

of expansion will be made every six years so that at each such point the sample will represent the 

population 50 and older. 

As the name suggests, health is a major focus of the HRS, and the survey has collected detailed 

information on health insurance coverage since the earliest interviews. The health insurance 

section was expanded significantly for the 2002 survey. The HRS has benefited from 

comparatively low item nonresponse, and has used the method of “unfolding brackets” to obtain 
 

34

approximate dollar amounts for expenditure, income, and asset items for which the respondents 

could not provide answers to the initial questions. Its strong data on income and wealth make the 

HRS particularly well suited to analyses of the economics of health insurance coverage among 

the aged (and the near aged as well). 

National Health Interview Survey (NHIS) 

The NHIS is an annual survey of about 40,000 households drawn to represent the civilian 

noninstitutionalized population of the U.S. The survey is administered over the course of a year 

using independent weekly samples so that it can provide unbiased estimates of the incidence and 

prevalence of many health conditions. Data are collected by the Census Bureau with in-person 

interviews using CAPI, which was introduced as part of a major redesign in 1997. The NHIS 

has collected data on health insurance coverage every year since 1989, with less regular data 

collection dating back to 1960 (Cohen 2000). 

A comparative strength of the NHIS is its high response rate. Even with recent declines, 

interviews are collected from over 90 percent of the eligible sample households, and item 

nonresponse to the health insurance questions is only 1 percent. Another strength is the use of 

reported health insurance plan names to edit the reported sources of health insurance coverage 

and improve the classification of managed care. With the low nonresponse, annual frequency, 

high quality coverage data, and a representative elderly sample of about 11,000, the NHIS 

provides a good source for monitoring the health insurance coverage of the entire elderly 

population. Its extensive data on health conditions will also support detailed analysis of the 

relationship between health insurance coverage and health care needs. 

Medical Expenditure Panel Survey (MEPS)

Cosponsored by the Agency for Healthcare Research and Quality (AHRQ) and NCHS, MEPS 

consists of three component surveys: (1) a household component (HC), which is representative 

of the civilian, noninstitutionalized population of the U.S.; (2) a medical provider component, 

which collects information from medical providers identified by household survey respondents 

in order to validate and supplement the data reported by those respondents; and (3) an insurance 

component (IC), which collects data from a representative sample of insurers (Cohen 1997). The 

initial MEPS in 1996 included a fourth component, which collected information on nursing home 

residents from a representative sample of nursing homes, but this component has not been 

repeated. The household component and the insurance component are relevant to measuring the 

health insurance coverage of the elderly. 

The MEPS-HC consists of a series of independent, annual panels that run about two-and-ahalf years in length. This overlapping panel design improves the precision with which 

MEPS can produce not only cross-sectional estimates but calendar year longitudinal 

estimates as well. Public use files combine the overlapping rounds of consecutive panels, 

which approximately doubles the sample size relative to a single panel and, as we noted 

with the MCBS, eliminates the effects of attrition bias on estimates across years. Data are 

released in the form of cross-sectional “point-in-time” files, which include fairly limited 

variables, and longitudinal full year files. For example, the 2002 file released in July 2003 
 

35

contains data collected in round 1 of panel 7 and round 3 of panel 6. The full year files 

(there are several) for 2001, which were released later in 2003, contain calendar year data 

collected in rounds 1, 2, and 3 from panel 6 and in rounds 3, 4, and 5 from panel 5. MEPSHC sample sizes declined during the late 1990s but have returned to their 1997 levels, with 

each panel including about 7,000 households. The point-in-time and full year files contain 

data for about 35,000 persons, nearly 4,000 of them aged. 

The MEPS-HC sample is drawn from households that responded to the previous year’s NHIS. 

The NHIS records provide a rich source of additional data on sample households prior to their 

selection into MEPS. A drawback of subsampling NHIS respondents to obtain the MEPS 

sample is that the unit nonresponse to the NHIS, low as it is, is built into the MEPS sample, 

compounding the nonresponse to MEPS itself. The cumulative response rate to the first round 

MEPS interview in the spring of 1996 was 78 percent (Vistnes and Monheit 1997). Response 

rates have dropped slightly since then. The 1999 panel achieved a response rate of 73 percent in 

the first round (Rhoades and Chu 2000). 

As the name suggests, the major focus of MEPS is medical expenditures. The HC collects two 

full calendar years of expenditure data with five in-person interviews and a sixth, very brief 

interview conducted by telephone. Health insurance coverage is a high priority area, given its 

relevance to medical expenditures, and MEPS collects detailed health insurance data for the 

entire two-year reference period. Each interview collects information on the coverage held by 

household sample members since the last interview (or, in round one, the beginning of the first 

calendar year). Like the MCBS, the HC interviews are conducted by Westat using the CAPI 

methodology. 

The MEPS-IC is a survey of employers and insurance providers. It collects information on the 

health insurance plans that are offered to employees and, for the provider sample, individuals 

who purchase coverage directly. The instruments include questions relating to coverage 

provided to retirees as well as current employees. 

What Can the Data Tell Us About Health 

Insurance for the Elderly?

Interest in the health insurance coverage of the elderly ranges across several dimensions. To 

adequately address the needs of policymakers and researchers, our data sources must be able to 

answer the following kinds of questions: 

• Who has what coverage and benefits? 

• What are the demographic and economic characteristics of those who have and those 

who do not have particular types of coverage and benefits? 

• How have coverage and benefits changed, and what is their current trend? 
 

36

 

• To what extent do individuals maintain their coverage and benefits over time? 

• What role does geography play in the availability of supplemental coverage? 

We compare the coverage and benefits data collected by the four surveys and then consider to 

what extent these surveys enable users to address the additional questions.

Coverage and Benefits 

All four of the surveys identify Medicare enrollees and capture Part B coverage (Table 3). Three 

of the four—all but the HRS—capture Part A as well. For the HRS, most of the missing Part A 

coverage can be inferred from the overall Medicare indicator and the reported Part B coverage. 

We say “most” because persons who buy in to Part B may choose not to purchase Part A. The 

NHIS and MEPS have a different limitation. Part A and Part B are determined from the 

respondent’s Medicare insurance card, and if this is unavailable—as it was for about 20 percent 

of Medicare beneficiaries in the 2000 NHIS—no information is obtained. 

Only the MCBS obtains the information needed to differentiate between enrollees who are 

automatically eligible for Medicare and those who buy in. These data are taken directly from 

Medicare administrative records, and their accuracy is presumably very high. The other three 

surveys capture the receipt of social security benefits, which can serve as a proxy for 

eligibility—but with limitations. Social security benefit receipt among persons 65 and older will 

identify most but not all of the elderly who are eligible for Medicare. Furthermore, social 

security benefits are subject to misreporting, which introduces additional error into the estimates 

of eligibility. The substitution of administrative data on social security benefit receipt, which 

may be possible for the HRS, addresses the possible misreporting of this proxy for Medicare 

eligibility but not the other limitations. 

All four surveys capture the presence or absence of Medigap coverage, and all but the NHIS 

obtain the plan letter, but the quality of reported plan letters is not high, and none of the surveys 

collects information on older plans.8

 The MCBS, the NHIS, and MEPS identify enrollment in a 

Medicare+Choice plan. While the HRS does not identify such coverage explicitly, it can 

approximate such enrollment with the information reported on managed care, as HMOs and 

PPOs account for most of the plans offered through Medicare+Choice. 

Both the MCBS, and beginning in 2004, the NHIS ascertain whether the respondent is entitled to 

VA care.9

 The MCBS also captures both the use of and expenditures for VA services. If a 

8

 The MCBS finds that a majority of those who report Medigap coverage cannot provide a valid plan letter. MEPS 

also obtains a lot of responses outside the A to J range. 

9

 As late as 2003, the NHIS listed "military health care/VA" and "TRICARE/CHAMPUS/CHAMP-VA" as two of 

the possible choices in response to a question asking what kind of health insurance or health care coverage each 

family member had. While persons with access to VA care might be picked up by the first category, persons with 

more comprehensive military coverage not identified as TRICARE, CHAMPUS, or CHAMP-VA could be 

included as well. Beginning in 2004, the NHIS includes a single category for military health care as a source of 
 

37

 

respondent is eligible for VA services, the MCBS will probe to determine if each reported 

medical services was provided by a VA facility or physician. 

With respect to additional data on coverage and benefits (Table 4), all four surveys identify 

whether or not Medicare coverage is obtained through an HMO, but only the MCBS 

distinguishes risk HMOs from non-risk HMOs. This is done with Medicare administrative data. 

MEPS asks respondents who report coverage through an HMO to identify the HMO from a list 

of Medicare HMOs in their area. This information is stored but not coded. All but MEPS 

identify PPO plans and whether they include point of service options, with the MCBS providing 

the most explicit and, possibly, the most accurate identification of such plans. 

Medicaid is an important source of supplemental coverage for low-income beneficiaries, and 

managed care is playing an increasingly more significant role in the delivery of Medicaid 

services. All four surveys identify Medicaid HMOs explicitly, with the HRS and NHIS 

capturing somewhat more detail on other types of managed care for private plans. 

With respect to prescription drug coverage, the MCBS, HRS, and MEPS obtain general reports 

of such coverage without probing for coverage limits, coinsurance or other costs. Medigap plan 

letters, collected by all but the NHIS, can indicate whether such coverage was obtained from 

Medigap and, if so, what such coverage includes, but as we have noted, the reliability of the 

reported plan letter is low. The NHIS obtains reports of prescription drug coverage only if such 

coverage is reported in a single service plan. 

Long-term care insurance is reported in the MCBS and the HRS both as a stand-alone and as part 

of a comprehensive private plan. MEPS captures nursing home coverage as part of a private 

plan as well. As with drug coverage, the NHIS captures long-term care insurance only if it is 

reported as a single service plan. Also like prescription drugs, none of the four surveys collects 

information regarding the scope of the coverage, which varies widely across plans. 

Data to Address Additional Questions 

Demographic and Economic Characteristics 

All four of the surveys capture standard demographic characteristics. The NHIS and MEPS, 

because they include the full household as sample members, have more extensive data on 

nonelderly members (other than spouses) than the HRS and the MCBS, but all four capture 

family and household composition. Economic characteristics are strong in both the HRS and 

MEPS, which capture assets as well as income. The MEPS devotes a substantial number of 

questions to income and assets. The HRS has considerably fewer asset questions, but its 

estimates of net worth, based on questions used in the PSID, compare favorably to those 

obtained for elderly persons in the PSID and the Federal Reserve Board’s Survey of Consumer 

Finances. Neither the NHIS nor the MCBS collects any information on assets, and their income 

data are very limited. 

coverage but follows up with questions that allow the respondent to identify one or more specific types of military 

health care, including VA. 
 

38

 Change in Coverage and Benefits Over Time

In selecting all of the surveys that we examined, it was a prerequisite that they provide repeated 

measures over time. The MCBS, MEPS, and the NHIS can provide nationally representative 

annual estimates because new samples are drawn each year. The HRS was designed with a 

different purpose than cross-sectional representation, but it, too, will be able to provide 

reasonably representative estimates of changes in patterns of coverage over time, given the 

introduction of six new birth cohorts every six years. Its limitations in this regard are its 

exclusion of immigrants and persons returning to the U.S. after the selection of each group of 

cohorts plus the attrition that the panel will experience over time. 

Continuity of Coverage and Benefits 

It is coincidental that three of the four surveys are longitudinal because all four were selected on 

the basis of their data on coverage and benefits. Yet the longitudinal aspect of their designs is 

critical to being able to provide data on the continuity of coverage and benefits among 

individuals. Do individuals change their coverage and, if so, why do they do so? MEPS will 

support estimates of continuity over a two-year period, and the MCBS will allow estimates of 

continuity over a period of up to four years. The HRS is open-ended, so it will support long-term 

analysis of changes in coverage, which is particularly important for investigating the impact of 

new policies affecting coverage, as interventions may take several years to achieve their full 

effects. At the same time, however, the two-year span between interviews limits the HRS’s 

utility for analysis of short-term impacts of changes in coverage and benefits. 

Geography 

Geographic location or, in particular, state of residence, is an important component of any 

measure of health insurance coverage. Plans vary across states, so knowing each respondent’s 

state of residence can be informative with respect to the characteristics of both private and public 

plans. Such information can also help with validation as well. If a respondent reports plan 

features that do not exist in the state, the responses can be edited. Of the four surveys, however, 

only the MCBS includes a state identifier in its public use files. State identifiers are suppressed 

in the public use files for the HRS, NHIS and MEPS in order to protect the confidentiality of the 

respondents, and it is unlikely that this will be changed. Users can make arrangements to work 

with non-public use MEPS and NHIS data in a secure site maintained by their sponsoring 

agencies, but this can be cumbersome and costly. All analysis of microdata utilizing the state 

identifiers or any information derived from them (including plan characteristics) must be 

conducted on-site. We are not aware of any option to obtain state identifiers for the HRS. 

Estimates of Coverage and Benefits

This paper was not intended to develop new estimates of coverage and benefits among the 

elderly, but for illustrative purposes we have assembled two tables that address key aspects of 

supplemental coverage. The first shows the extent to which Medicare beneficiaries draw on 
 

39

 

supplemental sources for their health insurance coverage. The second shows where Medicare 

beneficiaries obtain at least some coverage for the outpatient prescription drugs that are not 

covered by Medicare. 

Supplemental Coverage 

All but 10 percent of aged Medicare beneficiaries in 1999 had some form of supplemental 

coverage beyond basic fee-for-service Medicare Part A and/or B (Table 5). The reliance on 

supplemental coverage varied little by age group, but the sources differed.10 Persons 65 to 74 

were more likely to have employer-sponsored private insurance (37 percent including the 5 

percent who also purchased additional private coverage directly) and more likely to be enrolled 

in a risk HMO (21 percent) than older beneficiaries. Beneficiaries 85 and older were the least 

likely to be enrolled in a risk HMO or to have employer-sponsored private coverage and the most 

likely to have purchased individual private coverage (34 percent) or be covered by Medicaid (13 

percent). Nevertheless, the differences across age groups are not as striking as the similarities. 

Even among beneficiaries 85 and older, 30 percent still had employer-sponsored insurance—

only 7 percentage points lower than beneficiaries 65 to 74, who were much more likely to be still 

employed. 

Prescription Drug Coverage 

Including the non-aged with disabilities, nearly three-quarters (73 percent) of Medicare 

beneficiaries had at least some level of outpatient prescription drug coverage in 1998 (Table 6). 

While employer-sponsored insurance was the dominant source of prescription drug coverage, 

accounting for nearly 14 million of the 35.5 million who had supplemental insurance, the 

fraction of beneficiaries with prescription drug coverage was essentially the same (roughly 90 

percent) among those who were enrolled in any form of supplementation other than individually 

purchased coverage. Beneficiaries with individually purchased coverage were less than half as 

likely (43 percent) to have any kind of prescription drug coverage. 

Recommendations 

Our recommendations regarding the data we have discussed address possible expansion of the 

Forum’s chart book on older Americans and future data development. 

Expanding the Chart Book Indicators? 

The chart book, Older Americans 2000: Key Indicators of Well-being, includes seven health 

care indicators, but none of these involves health insurance coverage. Does our review of 

supplemental coverage provide grounds for expanding this set of indicators to include at least 

one measure of coverage? We believe that it does. Specifically, the large fraction of older 

Americans who supplement their Medicare coverage with one or more other forms of coverage 

10 Entries in Table 5 were calculated from Table 1.6 in a 1999 compilation published by CMS. Standard errors were 

reported in the published table, but standard errors for the statistics reported in Table 5 cannot be derived from 

those values. Because of this, the text highlights the largest differences. 
 

40

 

suggests a statistic or set of statistics worth charting. We expect that both the overall percentage 

who choose to supplement their coverage and how they elect (or are able) to do so will change 

over time, which makes this a useful indicator to watch. 

The fact that five of the seven current indicators refer to Medicare beneficiaries, and we have just 

proposed a sixth, invites us to consider whether there might also be grounds for developing an 

indicator based on the four percent of older Americans who are not covered by Medicare. While 

the argument for such an indicator is a reasonable one, however, the small size of this population 

prevents our saying anything interesting about its composition or characteristics that would be 

sufficiently reliable statistically to produce a good indicator. The NHIS, for example, might 

have no more than 500 observations on this population while the MEPS would have about 160 

(and the MCBS, of course, would have none). Compounding this problem is the fact that 

household surveys may very well underrepresent segments of this population, which would 

introduce a bias into estimates of the characteristics of this group. Until both problems can be 

solved in some way, we recommend against attempting to develop an indicator based onthe aged 

who lack Medicare coverage. 

Longer Term Priorities for Data Development 

The highest priority for improving the data on health insurance benefits among the elderly is an 

area of data development that has been a top priority among researchers for many years but one 

with which little progress has been made. There continues to be a need to find effective ways to 

incorporate information on the benefits included under private and public insurance plans into 

the key person-level databases. This would provide researchers direct access to the data they 

need to analyze the heterogeneity of benefits among the insured elderly. Variation in benefits is 

almost certainly greater among this population than among younger persons, so the potential 

value that would come from improving these data is correspondingly greater as well. 

Public plans provide a good place to start. For Medicaid and many state-only plans, it may be 

sufficient to know a beneficiary’s state of residence in order to attribute the details of the 

coverage that such plans provide. Similarly, much can be determined about Medigap policies 

from their plan letter and their state.11 At present, however, state data are available from only the 

MCBS, and this is unlikely to change in the near future. Including direct measures of state plan 

characteristics as an alternative to the state identifiers on public use files from the other three 

surveys is not a realistic alternative, as the uniqueness of particular benefit combinations would 

reveal the state identities that their suppression was intended to protect. But perhaps the surveys’ 

sponsoring agencies could contribute to the development of either a limited set of benefit codes, 

that would provide useful information without uniquely identifying states, or a more extensive 

set of codes that they could add to their restricted-use files, sparing researchers the need to create 

their own codes independently. 

Coding the benefits data from private plans is a much more substantial undertaking. We have 

noted the low reliability with which respondents with Medigap coverage can report their plan 

letters. What is needed here is a new approach, perhaps building on the successes that some 

surveys have had with coding information from plan descriptions. Both MEPS and the 

11 Three states deviate from the benefit packages summarized in Table 2. 
Community Tracking Study have obtained benefits data in this manner, and the information has 

proved useful to analysts, but in neither case did this become a routine component of data 

collection. A greater contribution from the respondent may ultimately be essential. Ascertaining

what additional data on benefits are most critical and how much of this respondents are likely to 

know are key steps in the path toward capturing useful benefits data. 

Other improvements in our data resources are suggested by the pattern of missing or qualified Xs 

in Tables 3 and 4. For example, both NHIS and MEPS could obtain more complete information 

on enrollment in Medicare Parts A and B by directly asking respondents what type of coverage 

they have if they cannot produce their Medicare cards. 

Lastly, while the fraction of elderly persons who lack Medicare coverage is small, and survey 

estimates suggest that most of these have other coverage, we could stand to learn more about this 

population. For example, to what extent is the lack of both Medicare and other coverage 

associated with undocumented immigration or, more broadly, employment not reported to the 

Social Security Administration? And what role does survey undercoverage play in hiding, in 

effect, some of the immigrant population from our view? To address these questions will require 

new data collection or a creative approach to combining information from existing data sources, 

as the answers cannot be obtained from any single survey or administrative database at present. 

Conclusion 

Acknowledging the role of supplemental coverage among Medicare beneficiaries is a partial step 

toward attaining a more comprehensive understanding of the health insurance coverage of the 

elderly. The limitations of Medicare coverage create the need to understand how the aged 

supplement their Medicare coverage—or substitute other coverage if they cannot qualify for 

Medicare. But the benefits provided by supplemental coverage vary widely. We need to set our 

sights on developing a more complete description of the aged population’s health insurance 

coverage that takes account of what, precisely, is included in the plans in which the elderly 

enroll. 

 

41
REFERENCES 

Centers for Medicare & Medicaid Services. 2003 Guide to Health Insurance for People 

with Medicare: Choosing a Medigap Policy. Baltimore, MD, 2003. 

------------. “Survey Overview.” MCBS home page. Baltimore, MD, 2002. 

Cohen, Joel. “Design and Methods of the Medical Expenditure Panel Survey Household 

Component.” MEPS Methodology Report No. 1. AHCPR Pub. No. 97-0026. 

Rockville, MD: Agency for Health Care Policy and Research, 1997. 

Cohen, Robin A. “Coding of Health Insurance Data on the National Health Interview 

Survey.” Hyattsville, MD: National Center for Health Statistics, 2000. 

Gold, Marsha. 2003. 

Poisal, John A. and Lauren Murray. “Growing Differences Between Medicare 

Beneficiaries with and without Drug Coverage.” Health Affairs Vol. 20, No. 2 

(March/April) 2001. 

Rhoades, Jeffrey A. and May C. Chu. “Health Insurance Status of the Civilian 

Noninstitutionalized Population: 1999. MEPS Research Findings No. 14. AHRQ 

Pub. No. 01-0011. Rockville, MD: Agency for Healthcare Research and Quality,

2000. 

Social Security Administration. Annual Statistical Supplement, 2000, to the Social 

Security Bulletin. Washington, DC: 2001. 

U.S. Census Bureau. “Health Insurance Coverage: 2001,” by Robert J. Mills. Current 

Population Reports, P60-220. Washington, DC: U.S. Department of Commerce, 

September 2002. 

--------------. “The 65 Years and Over Population: 2000,” by Lisa Hetzel and Annetta

Smith. Census 2000 Brief, C2KBR/01-10. Washington, DC: U.S. Department of 

Commerce, October 2001. 

Vistnes, Jessica P. and Alan C. Monheit. “Health Insurance Status of the Civilian 

Noninstitutionalized Population: 1996.” MEPS Research Findings No. 1. AHCPR 

Pub. No. 97-0030. Rockville, MD: Agency for Health Care Policy and Research, 

1997.

 

42
TABLE 1

MEDICARE AGED BENEFICIARIES, JULY 2000, BY TYPE OF MEDICARE COVERAGE

Number Percent Percent

of of of

Beneficiaries Total Aged

Type of Medicare Coverage (1,000s) Beneficiaries Population

Part A and/or Part B 33,548 100.0 95.9

Part A 33,130 98.8 94.7

Part B 32,235 96.1 92.1

Part A and Part B 31,816 94.8 90.9

Part A alone 1,313 3.9 3.8

Part B alone 419 1.2 1.2

SOURCE: Centers for Medicare & Medicaid Services, July 1, 2000 Medicare enrollment data and

 U.S. Census Bureau (2001).

 

43
TABLE 2

BENEFITS INCLUDED IN 10 STANDARDIZED MEDIGAP PLANS, A THROUGH J

Benefit A B C D E F G H I J

Basic benefitsa XXXX X X XXXX

Part A inpatient hospital deductible X X X X X XXXX

Part A skilled nursing facility coinsurance X X X X XXXX

Part B deductible X X X

Foreign travel emergency X X X X XXXX

At home recovery X X X X

Part B excess charges 100% 80% 100% 100%

Preventive care X X

Prescription drugs Basic Basic Extended

SOURCE: Centers for Medicare & Medicaid Services (2003).

a

 Includes: the cost of Part A coinsurance and 365 extra days of hospital care after Medicare coverage ends, the Part B coinsurance

 or copayment amount, and the first 3 pints of blood each year.

 

44
TABLE 3 

COLLECTION OF DATA ON MEDICARE AND SUPPLEMENTAL OR 

ALTERNATIVE COVERAGE: FOUR SURVEYS 

 

Source of Primary or 

Supplemental Coverage MCBS HRS MEPS NHIS 

Medicare Xa X X X

Part A Xa Xb Xb

Part B Xa X Xb Xb

Eligible vs. Buy-in Xa

Medigap X X X X

Plan Letter X X X

Medicare+Choice X a c X X

Medicaid X X X X

Private X X X X

Group X X X X

Non-group X X X X

Military d X X X

Other Public X X X X 

Entitled to VA Care X e X f

 

SOURCE: Survey instruments for the four surveys. 

a

 Obtained from Medicare administrative records. 

b

 Obtained from Medicare card presented by respondent; not collected 

if

the respondent was unable or unwilling to produce the card. 

c Not identified explicitly, but most participation in M+C can be inferred from 

reported enrollment in a Medicare HMO or PPO. 

d

 Not reported as a separate source; may be included in other public. 

e

 Those who reported having served in the Armed Forces are asked if they 

have received health care or health services through the Department of 

Veterans Affairs or V.A. since the reference date. This is separate from 

and generally less comprehensive than health insurance coverage

described as military and provided by the Department of Defense. 

f

 Beginning in 2004, the NHIS identifies "VA" as a distinct type of military 

health care. Previously, VA health care was combined with military

health care not reported as TRICARE, CHAMPUS, or CHAMP-VA.

 

45
TABLE 4 

COLLECTION OF ADDITIONAL DATA ON COVERAGE: FOUR SURVEYS 

 

Additional Data 

on Coverage MCBS HRS MEPS NHIS 

Medicare Managed Care Type 

HMO X X Xd X 

 Risk vs. non-risk Xa

 POS option X X 

PPO Xa Xb

Prescription drug coverage X X X Xc

Long-term care insurance X X X Xc

 

SOURCE: Survey instruments for the four surveys; Poisal and Murray (2001). 

a

 Obtained from Medicare administrative records. 

b

 Reduced fee for doctors on list; no explicit mention of PPO. c

 Captured only for persons who first report having a single service 

plan. 

d In 2004, the MEPS questionnaire was changed. The question now ascertains if the 

individual was enrolled in a managed care plan, but not the particular type of plan. 

 

46
TABLE 5

SUPPLEMENTATION OF BASIC MEDICARE SERVICES BY TYPE OF SUPPLEMENTAL COVERAGE

FOR NON-INSTITUTIONALIZED, AGED MEDICARE BENEFICIARIES, 1999

Total

Supplemental Coverage Aged 65-74 75-84 85+

Total Number (1,000s) 32,996 17,520 11,960 3,516

Total Percent 100.0 100.0 100.0 100.0

Medicare Risk HMO 19.2 20.8 18.1 14.9

Medicaid 9.0 8.5 8.5 12.9

Employer-sponsored private insurance 30.9 32.2 30.4 26.2

Individually-purchased private insurance 25.1 21.6 28.6 30.8

Both types of private insurance 4.8 4.7 5.1 3.7

Other 1.4 1.6 1.0 1.8

Medicare fee-for-service only 9.6 10.6 8.2 9.8

SOURCE: 1999 MCBS, Centers for Medicare & Medicaid Services.

 

47
TABLE 6

DRUG COVERAGE AMONG NONINSTITUTIONALIZED MEDICARE AGED AND DISABLED

BENEFICIARIES, BY SUPPLEMENTAL INSURANCE COVERAGE, 1998

Total Percent Percent

Beneficiaries With Drug Without Drug

Supplemental Insurance Coverage (1,000s) Coverage Coverage

All 38,109 73 27

No supplemental coverage (Medicare FFS only) 2,602 0 100

Any supplemental coverage 35,507 78 22

 Medicare risk HMO 6,282 92 8

 Medicaid 5,026 89 11

 Employer-sponsoreda 13,770 90 10

 Individually purchased only 8,999 43 57

 All other 1,431 89 11

SOURCE: Poisal and Murray (2001).

a Includes those with both employer-sponsored and individually purchased coverage.

 

48
Data Sources and Measures of Access and Affordability 

Deborah Chollet, Mathematica Policy Research 

Paper prepared for the 

Health Insurance for the Elderly: Issues in Measurement Workshop, April 2003 

 

Sponsored by the Federal Interagency Forum on Aging-Related Statistics 

And the Agency for Healthcare Research and Quality 

April 29, 2003, Washington, DC 

Suggested citation: Chollet, Deborah. “Data sources and measures of access and affordability.” In Potter, 

D.E.B., and Vistnes, Jessica (editors). Health Insurance for the Elderly - Issues in Measurement Workshop, 

April 2003: Meeting Summary, Commissioned Papers and Discussant’s Remarks. Agency for Healthcare 

Research and Quality Working Paper No. 06003, March 2006, http://www.gold.ahrq.gov. 

AHRQ Working Papers provide preliminary analysis of substantive, technical and methodological issues. 

The papers are works in progress and have not undergone a formal external peer review. They are

distributed to share valuable experience and research. Comments are welcome and should be directed to 

the authors. The views expressed are those of the authors and no official endorsement by the Agency for

Healthcare Research and Quality, the Department of Health and Human Services, or the member Agencies 

of the Federal Interagency Forum on Aging Related Statistics is intended or should be inferred. 

Corresponding author:

Deborah Chollet, Ph.D. 

Research Division 

Mathematica Policy Research 

600 Maryland Ave., SW, Suite 550 

Washington, DC 20024-2512 

E-mail: dchollet@mathematica-mpr.com

 

49
Introduction 

 

An estimated 61 percent of Medicare beneficiaries over age 65 had health insurance from

a private source in 1999 – from a current employer, a past employer, or an individually 

purchased plan (CMS 2001). For the vast majority of the elderly with private insurance 

or Medicaid, the coverage supplements traditional Medicare and is “second payer” for 

Medicare-covered services. For persons who are enrolled in a Medicare+Choice plan,

supplemental private insurance is presumably rare, although there may be reasons that the 

elderly would have supplemental private coverage even in that circumstance. 

 

As health care costs have risen, both the importance and cost of supplemental coverage 

also have risen. The growing cost of supplemental coverage may have caused some

employers to abandon offers of coverage for retirees. It may also have caused Medicare 

beneficiaries to drop coverage that is available, or to alter their coverage to reduce their 

contribution or premium. 

 

This paper considers what available survey data can reveal about elderly Medicare 

beneficiaries’ access to health insurance coverage to supplement Medicare benefits and 

the affordability of that coverage. For the purpose of this paper, access is defined as the 

offer of coverage distinct from the actual purchase or take-up of coverage. 

Affordability is a more complex issue, encompassing at least three considerations: 

personal income, the price of coverage, and the value of coverage (considering both 

benefits covered and cost sharing for covered benefits). This paper focuses on the price 

of coverage available either to persons with coverage or to those without coverage. Price 

is defined as either what covered participants actually pay for coverage or (consistent 

with the concept of access) the market price of available coverage regardless of whether 

coverage is taken. 

 

The following four sections of this paper consider (1) employer sponsored coverage for 

elderly workers and retirees – including military coverage; (2) private Medigap coverage; 

(3) Medicare managed care; and (4) private coverage for long term care. Each section 

first reviews emerging issues of concern to public policy makers and then considers the 

information national surveys – including household and employer – or by administrative 

data offer to inform these issues. Finally, the paper then turns to recommendations in two 

areas: expansion of the Chart Book indicators of well-being among older Americans 

(Federal Interagency Forum on Aging Related Statistics, Older Americans 2002: Key 

Indicators of Well Being); and longer-term priorities for data development. 

Two household surveys – the Health and Retirement Study (HRS) and the Medicare 

Current Beneficiary Survey (MCBS) are of particular relevance to questions of access to 

insurance and affordability.1

 One other survey, the Medical Expenditure Panel Survey 

 1

 Other national surveys judged less useful in measuring both access and affordability include the Current 

Population Survey (CPS), the National Health Interview Survey (NHIS), the Survey of Income and 

Program Participation (SIPP) the Community Tracking Study (CTS), the Panel Study of Income

Dynamics (PSID), and National Long-Term Care Survey (NLTCS). 

 

50
(MEPS) is of particular interest because of the ability it offers to measure the level of

premiums relative to insured expenditure at the individual or household level – an issue 

that is developed in the concluding section of the paper. 

The basic features of the national household surveys considered here are described in a 

companion paper and appendix (Czajka, J. and Appendix 2 in these Proceedings, 

respectively) and so are not reviewed again here. Discussion related to the HRS in each 

section below describes the information to be obtained in 2004, based on an expanded 

household sample and the preliminary survey instrument as of January 30, 2003.2

A. Employer-Sponsored Coverage 

Employer-sponsored coverage for retirees is, to many, considered an optimal way to 

obtain coverage to supplement Medicare. Provided as a group plan, it is presumed that 

the administrative costs of employer-sponsored coverage are much less than directmarketed individual plans and, therefore, that the value (measured as medical benefits 

paid) per premium dollar is higher. These plans generally provide coverage mirroring 

that for active workers, with Medicare as first payer. For elderly workers who remain 

employed, federal law (the Age Discrimination in Employment Act, ADEA) protects 

their eligibility for employer-sponsored coverage as for any other employee.3

1. Issues and Concerns 

The growing cost of employer-sponsored health insurance benefits, a series of court 

rulings protecting retirees’ contractual rights to continued benefits, and a change in the 

way that employers must account for future retiree health insurance obligations4

 have all 

corresponded to a decline in the rate at which employers offer retiree health insurance 

and the terms of offer when it is made available. Changes in the terms of offer include 

 2

 The HRS survey instrument was significantly expanded in 2002 to include more extensive questioning

about health insurance coverage. In 2004, the population sample also will be expanded, making it 

representative (with some caveats) of the population over age 50 at each point. 

3

 Although for active workers with employer coverage (and with Medicare), Medicare is second payer. 

4

 Financial Accounting Statement No. 106 (FAS 106), approved by the Financial Accounting Standards 

Board (FASB) in December 1990, requires most private companies to record unfunded retiree health 

benefit liabilities on their financial statements for fiscal years after Dec. 15, 1992, in accordance with

generally accepted accounting principles. FAS 106 requires employers to accrue and expense future

claims payments as well as actual paid claims. By affecting companies’ calculation of profit, recognition

of retiree health liabilities provides a strong incentive for companies to limit future expenses. In 2004, 

the Governmental Accounting Standards Board (GASB) directed state and local governments to 

document in their financial statements the full cost of health benefits for current and future retirees 

beginning July 1, 2007. Local officials report that the ruling (known as GASB 45) “could lead to reduced

benefits for retirees.” (Bill Turque, Washington Post, January 30, 2006, page B01). 

 

51
increases in participant contributions for coverage, increases in service requirements for 

coverage,5

 and reductions in the range of plan options available to retirees.

A 2001 district court interpretation of ADEA further narrowed the ability of employers to 

differentiate retiree health insurance benefits for retirees who are Medicare-eligible 

versus those who are not.6

 This ruling in effect restricts employers from requiring (older) 

Medicare-eligible retirees to pay a greater portion of their total cost of health insurance 

(including payment of Medicare Part B premiums) than younger retirees and from

offering different plan options (e.g., only HMO coverage) to Medicare-eligible retirees. 

As health care costs are again rising in excess of wages and pension payments, it seems 

likely that the offer of retiree health insurance will continue to decline, the terms of offer 

will continue to narrow, and the cost to retirees will rise. In 2000, an estimated 62 

percent of large firms offered health insurance benefits to Medicare-eligible retirees, 

compared to 80 percent in 1991 (Fronstin 2001). Among large employers that offered 

retiree health benefits to Medicare-eligible retirees, approximately one third required 

retirees to pay the full cost of coverage in 2000 (Wm. A. Mercer, 2001). A similar 

percentage of large employers limited their obligations to a defined-dollar contribution 

irrespective of the cost of the plan; beyond that limit, retiree contributions rise directly 

with further increases in the cost of the plan (Hewitt Associates 2001). 

2. Household Surveys

While the major national household surveys identify current coverage from a present or 

past employer, two are attuned specifically to retirees and may offer a richer context for 

understanding coverage choices: the Health and Retirement Study (HRS), the Medicare 

Current Beneficiary Survey (MCBS). These surveys also offer information about the 

dollar amount that covered retirees contribute for coverage. Other major household 

surveys, such as the MEPS, also contain information on retirees’ premium contributions 

for coverage.7

 

 5

 In 2000, 49 percent of large employers reported that they required at least 10 years of service and 

attainment of age 55 to qualify for retiree health insurance benefits; in 1996, just 35 percent 

required as much as 10 years of service (McArdle et al. 2000). 

6

 Erie County Retirees Association v. Erie County Employees’ Retirement Board, 140 F. Supp. 2d

466, 474 (April 16, 2001). This ruling applies only to employers located in the Third Circuit,

including Pennsylvania, New Jersey, Delaware, and the Virgin Islands. On August 20, 2001 the 

U.S. Equal Employment Opportunity Commission (EEOC) rescinded Section IV (B) of EEOC 

Compliance Manual Chapter on "Employee Benefits" regarding the Age Discrimination in

Employment Act (ADEA) and (retiree) health insurance benefits 

(http://www.eeoc.gov/policy/docs/benefits-rescind.html). In March 2005, the AARP won a 

Federal court decision to block the rule. The issue is still under appeal. For a summary of the 

litigation over the EEOC ruling see Law and the Workplace, Vol. XIV, Fall/Winter 2005, p. 7-8,

Proskauer Rose LLP, www.proskauer.com.

7

 Although the sample size for the population 65 and older is smaller in the MEPS, than in the HRS and 

MCBS. 

 

52
a. The Health and Retirement Study (HRS)

The HRS survey instrument asks about current coverage from the respondent’s current 

employer, and separately about coverage from a past employer, a spouse’s current 

employer, or a spouse’s past employer. If a spouse is not covered by the respondent’s 

plan, it asks whether the spouse was eligible to be covered. In addition, it asks whether 

respondents participating in an HMO had to join in order to obtain benefits from another 

supplemental plan (for example, a drug benefit), indicating whether their enrollment 

decision was forced by the terms of their retiree coverage. Finally, it asks how much the 

covered individual contributes for coverage and how much, using its characteristic 

“unfolding brackets” approach to elicit a response. The HRS includes various questions 

about the form and extent of benefits covered (e.g., whether the plan is an HMO or uses a 

preferred or required panel of providers), but most other questions related to benefit 

design are so broad that they probably are unhelpful in understanding why participants’ 

contributions to a retiree health insurance plan would vary. 

The HRS also asks a number of questions about prospective eligibility for retiree health 

insurance of respondents under age 65.8

 However, it asks about eligibility for coverage 

not taken or reasons for not accepting coverage only if either current coverage does not 

cover a spouse or if the respondent is employed but not covered by their employer. 

Similarly, the HRS asks whether the respondent is currently covered by TRI-CARE, 

CHAMPUS, CHAMP-VA, or any other military plan (separately or in addition to 

Medicare or Medicaid), but it does not ask about eligibility for coverage that is not taken. 

b. The Medicare Current Beneficiary Survey (MCBS) and the Medical 

Expenditure Panel Survey (MEPS)

The MCBS and the MEPS share much in common. Like the HRS, the MCBS and the 

MEPS are panel surveys. The MCBS uses a longitudinal, overlapping sample of 

Medicare beneficiaries, questioning each panel 12 times over a 4-year period. The MEPS 

uses a longitudinal, overlapping sample of the civilian non-institutionalized population, 

questioning each panel five times over a two year period. 

Like the HRS, the MCBS offers information about private insurance options not taken 

only with respect to coverage from a current employer. The MEPS contains information 

on why workers were not eligible for health insurance offered by their employer. The 

longitudinal structure of these surveys offer at least a glimpse of changes in retiree 

coverage that relate to affordability. 

 The MCBS and the MEPS ask whether the sample person(s) is currently covered by a 

supplemental plan, whether the plan is an HMO, whether it was obtained from a current 

 8

 For respondents younger than age 65 with coverage from a former employer, the HRS asks whether the 

coverage could be continued until age 65, and separately whether it could be continued after age 65. If 

the respondent is currently employed, the HRS asks whether coverage could be extended to age 65 if they

left that employer now, and (separately) whether it could be continued after age 65. Each of these 

questions is asked again with respect to coverage for the respondent’s spouse. 

 

53
or (separately) a former employer or a deceased spouse’s employer, how much the 

respondent (or primary insured person) pays for coverage, and whether a current or 

former employer contributes to the cost of coverage.9

 The MCBS also contains a 

question for individuals’ whose coverage has changed from the prior interview, asking 

why the change occurred. Response categories for this question include “too expensive” 

and “could not afford premiums, deductibles, or copayments.” 

3. Employer Surveys

Several private surveys of employers have asked about retiree health insurance benefits – 

whether coverage is offered and the terms of offer to retirees. Because these surveys are 

private, the data are proprietary although tabulations of the data have been made public. 

The MEPS-Insurance Component (MEPS-IC) is an annual survey of employers, 

sponsored by the Agency for Healthcare Research and Quality (AHRQ) and conducted 

by the U.S. Bureau of the Census. 

With respect to measuring access to coverage or affordability among current retirees each 

of these surveys offers the same dilemma: it is impossible to relate information about 

changes in offer or participant cost to the number of current retirees affected. However, 

each offers information that may be useful in understanding how important it is and will 

be to ask clearer questions about access (not just current coverage). They also suggest 

the potential value of asking clearer questions about participant cost sharing (not just

contributions to premium) to understand affordability. 

Among the ongoing private employer surveys is the Employer Health Benefits Survey, 

conducted by Kaiser Family Foundation and the Health Research and Education Trust 

(KFF/HRET).10 The KFF/HRET survey has been conducted each year since 1999, and 

follows a longer series of surveys conducted by KPMG periodically between 1988 and 

1998. The survey instrument includes questions about health insurance benefits for 

active workers, as well as a series of questions about benefits available to pre-65 and 

Medicare-eligible retirees. The sample frame includes all nonfederal employers, 

including private employers, state governments and local governments. It is stratified by 

employer size and industry, whether the employer’s workforce is unionized, and 

geographic region. 

The KFF/HRET survey asks about current offer as well as recent changes in retiree 

benefits. The latter include changes in the share of premium paid by retirees, elimination 

of retiree coverage for new hires or employees not yet retired, and changes in cost sharing 

 9

 The MCBS also asks a separate panel of questions about enrollment in a Medicare HMO – including

whether a current or past employer contributes to premiums, and whether an employer paying the

premiums is the most important reason for their participating in a Medicare HMO. 

10 William A. Mercer, Inc. also conducts an annual survey of employer health plans, and asks a 

series of questions about retiree health insurance benefit offer, terms of offer, and retiree 

contributions for coverage. The Mercer survey uses an augmented convenience sample which 

consists heavily of large firms. Mercer also has developed several metropolitan-area samples to 

develop estimates for those locales. 

 

54
for prescription drugs. The survey instrument also includes questions about changes that 

responding employers expect to make over the next two years, including changes in cost 

sharing for prescription drugs, the share of premiums paid by retirees, or elimination of 

coverage for current or future retirees or for new hires. 

The MEPS-IC, conducted since 1996, is a national survey of establishments that collects 

information on employer sponsored health insurance. Among the data collected are 

active employment, active enrollments, active plans, active plan enrollments, premiums, 

employer and employee contributions, self funding information and plan characteristics. 

Also collected are data that describe the employer, such as, firm size, industry, general 

wage levels, percentages of part time employees and presence of unions. Retiree 

information collected includes whether health insurance is being provided to some

current retirees above and below the Medicare eligibility age, whether the same coverage 

is provided for new retirees, enrollments, enrollments, premiums and contributions for 

retirees above and below the Medicare eligibility age. 

The MEPS-IC has a sample of over 47,000 business establishments and governments and 

covers all US employers except the Federal Government. The response rate is over 80%. 

Samples sizes currently are large enough to produce estimates for all 50 states and the 

District of Columbia. Results from the survey are used to support National Health 

Account Estimate made by the Centers for Medicare and Medicaid Services and Gross 

Domestic Product Estimates made by the Bureau of Economic Analyses. 

B. Medigap Insurance 

Federal law standardizes the design of all newly issued Medigap products as well as 

Medigap insurer practices regarding issue of new coverage.11 Insurers may continue to 

renew nonstandard products issued before July 1992, but otherwise they may sell only 10 

standard products. These products are designed to eliminate the redundant coverage that 

insurers and agents had marketed to the elderly, and to promote competition in the 

Medigap market. Under federal law, all Medigap insurers must sell the most basic 

Medigap product (Plan A), and in addition may sell any of the 9 more comprehensive 

products defined in law. In 1999, 64 percent of Medigap policyholders were one of the 

10 standard policy designs; 33 percent were prestandard, and 3 percent were HMO 

contracts as Medigap policyholders. 

Federal law requires Medigap insurers to sell all of the standard products that they offer 

to any applicant at age 65 (guaranteed issue) and to renew any policy in force except for 

nonpayment of premiums (guaranteed renewal). After age 65 (unless further constrained 

 11 OBRA-90 standardized Medigap policies and practices in nearly all states. Only Massachusetts, 

Minnesota and Wisconsin regulate Medigap plans under a waiver of Federal law. Each has a different set 

of standard policy options. Massachusetts has three standard policies, one of which covers prescription 

drugs. In Minnesota, prescription drug coverage is sold either as an optional rider to the basic policy, or

as a covered expense in extended basic policies. In Wisconsin, the basic benefit covers prescription drugs 

with a $6,250 drug deductible; additional drug coverage may be purchased as an optional rider. 

 

55
by federal law), Medigap insurers may underwrite coverage. That is, they may deny 

coverage to high-risk applicants and price coverage according to their assessment of the 

applicant’s risk and various other rating factors (such as age and geographic location) 

unless restricted by state law. 

Most Medigap insurers sell only a few of the 10 standard policy forms (though all must 

offer plan A). It is unclear from any available data whether all plans are available to 

Medicare beneficiaries from some Medigap insurer in every geographic location. But it 

is clear that individuals who would want to change plan types could have very little 

choice of plan type from their current insurer, and they would be underwritten if they 

attempted to change insurers. 

Medigap insurers rate Medigap coverage in any of three ways: by age at issue or attained 

age, or they may community rate. Various state legislatures have felt strongly enough 

about Medigap rating practices to require all insurers to rate using one of these rating 

methods, but there is no consensus among the states about which preferred.12 Under 

federal law, all insurers must community rate (that is, they may not rate to reflect health 

status) at first issue; the states generally prohibit insurers from underwriting for health 

status at renewal. 

1. Issues and Concerns 

While insurers have been able to issue only standardized products since mid-1992, in 

1999 one-third of policies currently in force were prestandard – that is, policyholders had 

continuously renewed them for at least 7 years. Some of these policies may cover very 

limited expenditures for prescription drugs (the prestandard AARP policy limited 

prescription drug coverage to $500 per year). This may explain why some elderly have 

retained prestandard policies in lieu of foregoing drug coverage (in standard plans A 

through G) or purchasing a standard policy that offers more (though still very limited) 

coverage for drugs (standard plans H, I, or J), presumably at a much higher price. 

However, other aspects of the Medigap market suggest that there is very little movement 

of policyholders among plans, suggesting that the elderly may review coverage 

infrequently, or that underwriting after age 65 may restrict Medigap policyholders’ ability 

to change plans. 

Available price information also suggests that there may be remarkably little competition 

in the Medigap market – even for Medicare beneficiaries at age 65, but also after age 65. 

Polling the available rates in the Medigap market within metropolitan areas, Weiss 

 12 Entry-age rating front-loads premiums in order to achieve lower cost increases over the life of the policy. 

Because attained-age premiums are not front-loaded, they may be lower than entry-age rates at age 65 (all 

else being equal), but they may rise more steeply over the policyholder’s lifetime. Community-rated

policies (such as those marketed through AARP) average the cost of coverage over the whole group 

(irrespective of health status) and they also may soften or eliminate the age gradient. Thus, communityrated policies may be either more or less expensive at age 65 than policies priced an entry-age (frontloaded) basis, but they probably are less expensive in later years than an attained-age-rated policy. Of 43

states that responded to a NAIC survey in 1999, six states prohibited Medigap insurers from using entryage rating, ten prohibited attained-age rating, and eight required community rating (NAIC, 2000). 

 

56
Ratings, Inc. (2002) found wide variation in premiums for identical plan designs 

available at to 65-year old men. Average premiums for standard products also vary 

widely across states (for both new issue and renewals combined), suggesting that many 

Medigap policyholders may be unknowledgeable about available alternatives or unable 

(given market underwriting) to change insurers to obtain a lower price for coverage 

(Chollet and Kirk 2001). 

2. Household Surveys 

All national household surveys of the population over age 65 obtain sufficient 

information about coverage to infer whether elderly individuals have individually 

purchased Medigap coverage. Most also seek information about the cost of those 

policies. However, two national surveys ask additional questions that may help to 

address public policy concerns about competition in the Medigap market – specifically, 

access to new coverage after age 65.

a. The Health and Retirement Study (HRS)

The HRS asks about respondents over age 65 about individually purchased coverage and 

also the cost of coverage to policyholders. However, HRS asks two additional questions 

of interest. It asks individuals enrolled in managed care whether they were enrolled 

principally because they could not obtain Medigap coverage – a question that may 

suggest problems of access. Also the HRS asks all respondents enrolled in a Medigap

plan how long they have held their current policy – a question that could help in 

understanding the relationship between mobility among Medigap carriers and premium 

levels – that is, whether there is competition in the Medigap market. 

b. The Medicare Current Beneficiary Survey (MCBS)

The MCBS also asks respondents about coverage from a Medigap plan, attempts to 

identify the plan type (A through J), and asks about premium payments. However, it asks 

virtually no questions that would help to identify or interpret problems of access or 

affordability for Medigap policyholders. Only one question in the MCBS instrument 

could hint at underwriting problems in the Medigap market: whether the most important 

reason that an individual joined a Medicare HMO13 related to an inability to buy a 

Medigap plan. However, responses to this question are ranked, so that if the respondent 

identifies any of eleven other reasons as more important, the respondent is not asked 

about the difficulty of obtaining a suitable Medigap plan.14

 13 MCBS has an unusual advantage in obtaining accurate information about HMO enrollment, in that it can

be linked to Medicare records. Household surveys asking type of plan in which respondents are enrolled 

have yielded rates of HMO enrollment that are infeasible. 

14 In addition to the HRS and MCBS, the Medical Expenditure Panel Survey (MEPS) obtains information

about individual coverage purchased by Medicare beneficiaries. MEPS asks both insured and uninsured 

respondents if they ever had been denied coverage because of health problems, but it does not ask when

the denial occurred, for what type of product, or under what circumstances. 

 

57
3. Administrative Data 

Every state requires health insurers to report extensive information about their Medigap 

business in that state. This information includes premiums earned and medical claims 

paid for the reporting year by standard policy form, as well as the number of 

policyholders covered in each policy form. Medigap insurers also must report the 

amount of premiums for new policies sold in the three prior years, thus indicating the 

extent to which they have been actively selling coverage versus renewing old business. 

While these data offer a much more detailed picture of Medigap markets than available 

household survey data, they also are very limited. They offer a much clearer picture of

access for Medicare beneficiaries at age 65 (when all Medigap policies are guaranteed 

issue), albeit at the state level, not at the local market level. They enable calculation of

average premiums, but they offer no information on actual rates or method of rating. 

Finally, they include the number of policyholders, but no information about the 

demographics of policyholders or the length of time that policyholders have renewed 

coverage. Consequently, they offer an intriguing glimpse of the market, but ultimately 

answer very few questions about how well the Medigap market serves Medicare 

beneficiaries. 

C. Medicare Managed Care 

Introduced in 1997, the Medicare+Choice program (M+C) introduced major changes in 

Medicare managed care.15 M+C expanded the types of managed care organizations 

eligible to contract with Medicare, changed the way they are paid, instituted greater 

quality assurance and improvement requirements, and increased the information offered 

to beneficiaries about their coverage choices. 

1. Issues and Concerns 

Expanding access to a choice of M+C plans and maintaining stable access to these plans 

are key concerns of the Medicare program, as is maintaining affordable premiums for 

participation. Before 1997, enrollment in Medicare managed care was growing steadily, 

although most participating HMOs offered only supplemental coverage (such as 

prescription drugs) at a low monthly premium, primarily in urban areas. In 1997 and the 

years that followed, many managed care organizations left the program. In 1999, 407 

thousand Medicare beneficiaries were affected by plan withdrawals; this number rose to 

934 thousand in 2001, and remained at 536 thousand in 2002. In 2002, 17 percent of 

affected beneficiaries had no alternative M+C option in their market area (Gold and 

McCoy 2002). In most rural counties, Medicare beneficiaries still do not have access to a 

Medicare managed care plan. 

 15 With the passage of the Medicare Prescription Drug, Improvement and Modernization Act (MMA) of

2003, the Medicare+Choice program (M+C) was renamed the Medicare Advantage (MA) program. 

 

58
Many of the managed care plans that remained in the M+C program raised premiums and 

reduced benefits. Average monthly premiums rose 16 percent between 2002 and 2003 

(to $37 per month), while the percent of M+C enrollees with prescription drug coverage 

dropped from 72 percent to 69 percent. In 2003, 60 percent of plans cover only generic 

drugs, compared to 55 percent in 2002 and 19 percent in 2001 (Achman and Gold 2003). 

Voluntary disenrollment from M+C plans, while fairly low (approximately 4 percent in 

2001) was nearly twice as high as in 1998 (2.1 percent). Nearly half of Medicare 

beneficiaries who withdrew from an M+C plan (45 percent) returned to traditional 

Medicare (Gold and McCoy 2002). These beneficiaries have constrained options for 

reenrolling in a Medigap plan to supplement Medicare benefits.16

The Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003 

changed the playing field for private plans participating in the Medicare program. MMA 

substantially raised monthly payment rates in 2004 and 2005 in an effort to stabilize the 

market and stem eroding benefits. In 2004, Medicare Advantage (MA) plans generally 

used the new funds to reduce premiums, restore brand-name drug coverage, or both 

(Achman and Harris 2005). 

2. Household Surveys 

Many (if not all) of the national household surveys of the population over age 65 obtain 

sufficient information about coverage to infer whether elderly individuals have HMO 

coverage. They also allow the data user to distinguish between whether the respondent’s 

HMO coverage is a benefit of present or past employment or an individual purchase, and 

they seek information about the cost of those policies. However, both the HRS and the 

MCBS ask more extensive questions about Medicare HMO enrollment. 

a. The Health and Retirement Study (HRS)

The HRS asks a number of questions about HMO enrollment that drive at questions of 

access and affordability. Of respondents enrolled in a Medicare (or Medicaid) HMO, it 

asks how long they have been enrolled in that specific HMO, and how much the 

respondent pays to participate net of deductions from their Social Security benefit. HRS 

also asks about recent exit (in the last two years) from a Medicare HMO and why. 

Responses include access to providers and services, as well as increased cost, that the 

plan encouraged them to leave, and that the plan itself became unavailable. 

b. The Medicare Current Beneficiary Survey (MCBS) 

The MCBS also asks about enrollment in a Medicare HMO, and confirms whether the 

respondent has changed plans since the previous interview. It asks participating 

respondents the most important reason that they (and/or their spouse) joined the Medicare 

 16 Under federal law, Medigap insurers may deny beneficiaries exiting M+C plans (or employer-sponsored

retiree coverage) coverage in any policy form except A, B, C or F (none of which cover prescription

drugs). They also may deny applicants any policy except A if more than 63 calendar days have elapsed

since disenrolling from an M+C plan. 

 

59
HMO; the first optional response category is lower cost. Among respondents who had 

been covered by a Medicare managed care plan at the previous interview (or who refute 

Medicare’s records indicating that they still are enrolled in a Medicare Managed Care 

plan), it asks the most important reason for disenrollment; optional response categories 

include “too expensive,” “the plan went out of business or stopped Medicare coverage,” 

and that the plan corporately changed (“plan name changed or plan was bought 

by/merged with another managed care plan”). MCBS also asks about coverage by any 

other Medicare managed care plan since the last interview. 

If the respondent is not enrolled in a Medicare managed care plan, the MCBS asks if the 

respondent had ever heard of such a plan; whether such a plan is available locally; and 

whether the respondent would prefer to have any, more, or different Medicare managed 

care plans available to them. Respondents also are asked about their satisfaction with the 

information available to them to make health coverage choices. 

3. Administrative Data 

CMS maintains Medicare Compare, a database that provides information about available 

M+C plans by market area, as well as the benefits they provide. When merged with 

enrollment numbers from CMS’s State/County/Plan Market Penetration file, this 

information can yield area-specific estimates of enrollment and disenrollment by plan 

feature, as well as enrollment-weighted estimates of plan features and changes within and 

across service areas.17

Once these data are merged to be useful in understanding local changes in the M+C 

program that affect beneficiaries, they offer considerable information about access to a 

local plan. Medicare Compare also offers information about offers and premium levels 

for individual Medicare beneficiaries by local area, although it is not generally accessible 

as a research database. 

D. Long-Term Care Insurance 

Despite decades of private long-term care insurance marketing, very little long-term care 

is yet privately insured. In 1999, Medicaid paid for half of the long-term care services 

used by Medicare beneficiaries, and beneficiaries paid 41 percent out-of-pocket. Less 

than 10 percent was paid by all other third-party payers combined, including private 

insurance (CMS, June 2002). 

1. Issues and Concerns 

Access to long-term care is a significant and growing issue for the United States, as the 

baby boom ages, the elderly population’s life expectancy increases, and the need for long 

term care services accelerates. The prevalence of moderate to severe and irreversible 

 17 For example, see Gold and Achman (2001) and Achman and Gold (2002). 

 

60
dementia increases exponentially with advancing age, as does the prevalence of disabling 

physical problems such as osteoarthritis, osteoporosis, diabetes, severe hearing and vision 

impairment, and Parkinson’s disease. Estimates of the baby boom’s future need for longterm care swamp those of current demand, as both a larger elderly population – and a 

larger share of them very old – require therapeutic and personal care services that 

Medicare does not cover. 

While the prevalence of long-term care purchase has remained low, it is expected to 

increase at least moderately over the next decade, as the baby boom pays greater attention 

to financing retirement, including health care and long-term care. Long-term care 

policies, like a large share of Medigap policies, typically are priced on an entry-age basis, 

but they have a larger asset component than entry-age Medigap policies. Policyholders 

are encouraged to buy policies much before they are likely to use long-term care services, 

and to maintain coverage (paying regular premiums to the same carrier) for many years – 

30 years or more for a woman who buys a long-term care policy at age 51. 

Policyholders who allow their policy to lapse (for nonpayment of premiums) lose not 

only current coverage, but also the asset value of their policy. They might look to buy 

another policy, but could pay a much higher premium associated with entering coverage 

at an older age. 

This structure of pricing makes both the stability of coverage and indexation of benefits 

extremely important. If elderly policyholders finally fail to maintain coverage – 

neglecting to pay regular premiums because of reduced income, confusion, or illness – 

they are likely to lose longstanding coverage at irreplaceable prices, just as their need for 

long term care materializes. If benefits are not indexed appropriately to the cost of care, 

most of the value of a policy held over 30 or 40 years could erode – so that the policy 

would become increasingly inadequate as the policyholder’s probability of needing care 

rose. 

2. Household Surveys 

The HRS asks respondents about coverage for long term care. The HRS asks about 

whether the policy covers institutional care, care at home, or both; how much re 

respondent pays for coverage; whether the respondent’s spouse also is covered; whether 

benefits are indexed; and the premium amount. It also asks whether the respondent ever 

had claimed payment for long-term care services under the plan, and whether the 

policyholder had ever been cancelled or let a policy lapse because payments were too 

high (or they no longer needed coverage). 

 

61
Recommendations 

3. Expanding the Chart Book Indicators 

The chart book, Older Americans 2000: Key Indicators of Well-Being, currently contains 

no measures of health insurance coverage, access to coverage, or affordability. It 

includes estimates of health-related expenditures by age (from the Consumer Expenditure 

Survey), but does not differentiate expenditures for premiums from direct (out of pocket) 

expenditures for health care services.18

The companion paper prepared for this Workshop (Czajka, 2006) suggests that private 

supplemental insurance is sufficiently prevalent and important to elderly Medicare 

recipients to warrant the addition of at least one indicator – measuring coverage by source 

of coverage. While that indicator would indeed be most fundamental, two others would 

also be very useful in assessing the elderly population’s well-being: direct payment (or 

contributions) for premiums as a proportion of (1) total health care expenditures and (2) 

personal income, among individuals that have supplemental private coverage. These 

measures would help to track changes in the value of coverage per premium dollar paid, 

and also the affordability of coverage as health care costs and premiums continue to rise. 

4. Longer-Term Data Development 

Our review of the current national household surveys indicates that they offer extremely 

little information about access to coverage (versus current coverage status) or options for 

alternative coverage. While it may be infeasible to obtain extensive information from 

respondents about insurance options not taken, it would be valuable to understand 

somewhat more about the respondent’s choice set. For example, respondents without 

retiree coverage might be asked whether they had in the last year looked or applied for 

(alternative) coverage and if so, whether they had been accepted or denied coverage. If 

they were accepted, they might be asked why they chose not to take that coverage. 

Problems of access are likely to differ among the major sources of supplemental coverage 

– retiree health coverage, Medigap coverage, and Medicare Advantage. But for each type 

of coverage, access problems are likely to be regional or local in nature – related to local 

labor markets and compensation norms, state regulation of insurance, managed care 

penetration, and insurance market structure. While geographic indicators create 

notorious problems of confidentiality for small samples, it may be very difficult to 

understand problems of access to insurance viewed only at a national level. Thus, to 

understand trends in private coverage, surveys based on samples representative at a 

market level (like the RWJF Community Tracking Survey) might offer the best 

information for understanding Medicare beneficiaries’ access to coverage. Linked to 

 18 Since the Workshop was held Older Americans 2002: Key Indicators of Well-Being has been republished. See the web site of the Federal Interagency Forum on Aging Related Statistics for the most upto-date information (http://www.agingstats.gov). 

 

62
local-market (or even state-level) administrative data measuring the supply of coverage, 

such information could offer a very rich picture of access. 

Several surveys – notably the HRS and MCBS, but also SIPP, MEPS, and NHIS – obtain 

information about premium or contribution levels. However, differences in premiums

paid are impossible to interpret without also knowing the proportion of health care 

expenditures that the policy covered or did not cover or, at minimum, some of the basic 

design features of the plan. Policies that cover fewer services or narrowly limit coverage, 

given the level of premium they require, may be as unaffordable as policies that cost 

much more but also cover more. A conventional accounting measure of insurance value 

is the ratio of benefits returned for premiums paid. While not all surveys are designed to 

capture health expenditure data, those that are (such as MEPS) are uniquely positioned to 

understand affordability much more clearly than information about only premiums and 

income permit. Efforts to collect policy booklets (such as MEPS did in 1996 and BLS 

had done for its discontinued Employee Benefits Survey) are more arduous, but may be 

worthwhile periodically to establish and update benefits benchmarks. 

Like changes in access, changes in the value of coverage might be best understood at a 

state or local level—where survey findings might translate to public policy. However, 

MEPS relies on a relatively small population sample – related to the complexity and cost 

of capturing expenditure information. Even so, greater attention to developing even 

national estimates of benefits changes, by type and source of coverage, would offer 

substantially more information about the affordability of coverage, and affordability 

trends, than is available today. 

Finally, it would be of considerable interest to obtain information from more than one 

source about whether elderly Americans hold long-term care insurance and some features 

related to the adequacy of coverage. At minimum, it would be useful to know whether 

the policy value was indexed, what event (e.g., one or more ADL impairments) would 

trigger payment, whether individuals hold more than one policy, and (if no coverage) 

reasons for not having purchased long-term care coverage. As the baby boom enters old 

age, a more detailed understanding of the demand for long-term care coverage will 

become increasingly important in developing national policy for financing their care. 

 

63
Additional References 

Achman, L. and L. Harris. (2005) Medicare Advantage (Medicare+Choice)

Early Effects of the Medicare Modernization Act: Benefits, Cost Sharing, and Premiums 

of Medicare Advantage Plans. Washington, DC: AARP, April 2005 

(http://assets.aarp.org/rgcenter/health/2005_02_mma.pdf). 

Czajka, J. (2006). “Data sources and measures of coverage and benefits.” In Potter, 

D.E.B., and Vistnes, Jessica (editors). Health Insurance for the Elderly - Issues in 

Measurement Workshop, April 2003: Meeting Summary, Commissioned Papers and 

Discussant’s Remarks. Agency for Healthcare Research and Quality Working Paper No. 

0???, xxx, 2006, http://www.ahrq.gov. 

Federal Interagency Forum on Aging Related Statistics. (2002). Older Americans 2002: 

Key Indicators of Well Being. Available at the web site of the Federal Interagency Forum

on Aging Related Statistics http://www.agingstats.gov. 

 

 

64
Discussant’s Remarks

Pamela Farley Short, Pennsylvania State University

Paper prepared for the 

Health Insurance for the Elderly: Issues in Measurement Workshop, April 2003 

 

Sponsored by the Federal Interagency Forum on Aging-Related Statistics 

And the Agency for Healthcare Research and Quality 

April 29, 2003, Washington, DC 

Suggested citation: Short, Pam Farley. “Discussant’s remarks: paper prepared for the 

Health Insurance for the Elderly: Issues in Measurement Workshop.” In Potter, D.E.B., 

and Vistnes, Jessica (editors). Health Insurance for the Elderly - Issues in Measurement 

Workshop, April 2003: Meeting Summary, Commissioned Papers and Discussant’s 

Remarks. Agency for Healthcare Research and Quality Working Paper No. 06003, March 

2006, http://www.gold.ahrq.gov. 

AHRQ Working Papers provide preliminary analysis of substantive, technical and 

methodological issues. The papers are works in progress and have not undergone a 

formal external peer review. They are distributed to share valuable experience and 

research. Comments are welcome and should be directed to the authors. The views 

expressed are those of the authors and no official endorsement by the Agency for 

Healthcare Research and Quality, the Department of Health and Human Services, or the 

member Agencies of the Federal Interagency Forum on Aging Related Statistics is 

intended or should be inferred. 

Corresponding author: 

Pamela Farley Short, Ph.D. 

Center for Health Care and Policy Research 

The Pennsylvania State University 

116/118B Henderson Building 

University Park, PA 16802-6500 

E-mail: pxs46@psu.edu` 

 

65
Discussant’s Remarks

The two papers written by John Czajka and Deborah Chollet offer an excellent 

description of the data that are available to describe the health insurance of elderly 

Americans. Czjaka’s overview concentrates on actual coverage and benefits, while 

Chollet’s concentrates on the availability and affordability of health insurance choices for 

people over age 65. In that sense, using concepts suggested 25 years ago by Andersen 

and Aday for thinking about access to health care,1

 one might say that Cjaka describes 

realized access to health insurance while Chollet describes potential access. 

Looking beyond realized access to potential access is just as important in studying health 

insurance as health care itself. Health insurance patterns among the elderly are the net 

result of two factors: (1) the menu of insurance options that are available to each person 

through public and private sources, and (2) the decisions made by each person in 

choosing from those options. 

There are a number of good reasons for distinguishing between potential and realized 

access in collecting data about the health insurance of elderly Americans. First, 

characteristics of the plans chosen by elderly consumers are not necessarily a good 

indication of the choices that were available in the first place. For example, average 

premiums will be lower for actual coverage compared to available coverage, if buyers are 

attracted to plans with lower premiums. Also, because potential access accounts for the 

number and affordability of the alternatives available to consumers, it is a good indicator 

of the competitiveness of health insurance markets. After all, where enrollees are locked 

into their current plans because of the uneven geographic distribution of Medicare + 

Choice products, for example, or by individual health problems that a new insurer would 

refuse to cover, incumbent plans are freer to charge higher prices or skimp on service. 

Finally, empirical studies that are aimed at predicting the effect of policy changes on 

insurance purchases are likely to reach false conclusions if they fail to account for 

differences in the choices that different people could make. 

Both Czajka and Chollet give particular emphasis to data that are available from

household surveys. However, as both mention, relevant data can also be obtained from

other sources, including administrative sources and employer surveys. Probably the most 

important administrative source is the Medicare program itself. Czajka makes use of 

administrative data from the Medicare program to compare the number of elderly 

Medicare enrollees to the number of elderly Americans, thereby calculating the number 

of elder people without Medicare. In addition, state Medicaid agencies have information 

about their enrollees and report some of it to the federal Center for Medicare and 

Medicaid Services. As Chollet notes, there are regulatory databases with information 

about Medigap products that private insurers must submit to state insurance 

commissioners. Finally, with about a third of beneficiaries currently supplementing 

Medicare with insurance obtained from employers, according to the figures in Czajka’s 

 1

 R. Andersen and L.A. Aday, Access to medical care in the U.S.: Realized and potential. Medical Care

16(7): 533-46, July 1978.

 

66
paper, employer surveys are another source of information about the health insurance of 

older Americans. 

Czajka offers a useful list of high-priority questions regarding health insurance for the 

elderly: 

• Who has what coverage and benefits?

• What are their demographic and economic characteristics?

• How have coverage and benefits changed?

• How continuous are coverage and benefits?

• What role does geography play?

To this list, Chollet essentially adds two more: 

• What health insurance choices are available to the elderly?

• How affordable are these choices? 

Household surveys are better suited to answering some of these questions than others. In 

the rest of my comments, I will discuss the relative strengths and weaknesses of

household surveys, administrative data, and employer surveys in obtaining different types 

of data regarding the health insurance of the elderly. I will also suggest that we need 

these data for at least four different uses. When I array the available data against the uses 

of data, I conclude that there are important limitations in the availability of data for some

purposes. However, some of these limitations may be difficult to overcome. 

As shown in Table 1, household surveys that ask about expenditures, as well as those that 

ask about insurance, are relevant in measuring health insurance. In particular, health care 

expenditures that are not paid by insurance, but are paid out-of-pocket, are a good 

summary indication of the overall generosity of an insured person’s coverage (or, more 

exactly, its inverse). Out-of-pocket expenditures are especially meaningful as a measure 

of insurance generosity when expressed as a share of total health care expenditures, as

advocated by Chollet, or as a measure of affordability when expressed as a share of 

income. Indeed, when analysts have had access to detailed health insurance provisions, 

they have used the information to calculate the share of total expenses that would be paid 

out of pocket in order to compare and summarize across a wide variety of policies2

Household respondents can provide reasonably good information about the sources of 

their insurance (for example, whether obtained from a current or former employer or 

directly from an insurance company). Over time, survey researchers have also developed 

acceptable approaches for identifying HMO enrollees in household surveys. Most 

household surveys also ask about covered services, particularly whether a person has 

insurance that covers prescription drugs. Expenditure surveys ask primarily about out-ofpocket expenses for health care and insurance premiums. The Medical Expenditure 

Panel Survey obtains information about total health care expenditures by supplementing 

 2

 P.F. Short and J. Banthin, New estimates of the underinsured younger than 65 years. JAMA

274(16):1302-06, October 25, 1995. 

 

67
household reports with data obtained from the sample’s health care providers, and the 

Medicare Current Beneficiary Survey combines household reports with Medicare claims

to estimate total health care expenditures. 

Household respondents cannot reliably describe their health insurance arrangements in 

any detail. Nor can they provide reliable data concerning the total cost of health 

insurance that is partly (or entirely) financed by employers. Household respondents are 

unlikely to know or remember much about the options that they did not select. 

Consequently, as indicated in detail in Table 1, administrative sources and employer 

surveys are virtually the only sources of detailed data concerning plan types and 

provisions, premiums for employer-sponsored insurance, and options or potential access. 

Corresponding to the columns of Table 1, there are at least four major uses for data 

concerning the health insurance of elderly Americans. The data are needed to monitor 

trends and to identify significant disparities across the population. Data are also needed 

for policy analyses and to estimate behavioral parameters (such as the responsiveness of 

health insurance choices to premium or benefit differences). From left to right across the 

table, these uses demand increasingly more of the data. To monitor trends requires only 

that health insurance data be collected consistently and repeatedly. Consequently, trends 

are available for every type of data shown in the table. 

To monitor disparities, health insurance data must be linked to individual characteristics 

or collected by geographic location, so the data available for this purpose are somewhat 

spottier. In particular, because administrative files contain only a limited set of 

individual characteristics (such as age) and employer surveys have no individual 

information, there is little information about individual disparities regarding aspects of 

health insurance that can only be monitored through these sources. On the other hand, 

because most surveys are not designed with samples large enough to make estimates for 

local areas, administrative sources are the main source of detailed information regarding 

geographic disparities. In addition, confidentiality concerns limit the release of survey 

data files with identifiers for geographic areas as small as states or metropolitan areas.

Like the monitoring of disparities, policy simulations require health insurance data that 

are linked to individual and geographic characteristics. However, policy analyses usually 

require many data elements of both types, in order to model the health insurance changes 

in the policy proposal and the number and characteristics of people who would be eligible 

for or affected by the policy. Luckily, it is often enough to get these relationships right 

“on average,” so policy simulations sometimes use imputation or statistical matching to

merge data originally collected from multiple sources. However, the feasibility and 

quality of these merges is limited by the lack of individual characteristics in data obtained 

from administrative records and employers and the lack of detailed geographic 

information in household surveys. 

Behavioral analyses also require a large number of health insurance details (to describe 

“the behavior”) and a large number of individual details (to describe the decision-maker 

and the decision-making context). However, for this purpose, all of the details for 

 

68
 

69

specific individuals must be linked together correctly. Errors or random variation in 

associating factors predicting behavior with the behavior itself will bias estimates of 

behavioral effects towards zero. No data source allows analysts to model the behavior of 

elderly individuals as they select a specific health insurance plan, described in terms of its 

price and benefit provisions, from an explicit set of alternatives (with their prices and 

benefit provisions). Nor are there data to support modeling of expenditures, the 

supplementation of Medicare from all sources, or other topics mainly covered in 

household surveys at the market level. 

Selective changes to existing data sources and creative use of available data could 

overcome some of these limitations. Out-of-pocket expenditures can often serve as a 

good substitute for detailed descriptions of plan benefits that cannot be obtained from 

household respondents. The utility of administrative data systems maintained by 

Medicare and Medicaid could be enhanced by adding a few more individual 

characteristics for direct analysis and statistical matching. Increasingly, statistical 

agencies are allowing users to link geographic identifiers to household surveys in 

controlled data centers. Multiple years of data can sometimes be combined to make 

estimates for smaller geographic areas. More can be done with statistical matching of 

data from different sources. Exact linkages of survey data with administrative records 

(for example, through the use of Social Security numbers) can also be pursued, although 

these linkages can be quite costly in terms of money and the timeliness of data. Exact 

linkages also raise confidentiality concerns and are prone to high levels of missing data 

when surveys are required to follow elaborate, legalistic procedures in asking respondents 

for permission to make the linkages. 

I conclude that existing data systems already provide good coverage of trends and 

disparities in the health insurance of the elderly. However, while we have a good picture 

of realized access, our view of potential access is somewhat cloudier. I also believe that 

behavioral analyses involving large-scale, national data sources will always be severely 

constrained by the inability of household respondents to report on their actual coverage or 

options in any detail. 
Table 1. Availability of data from different sources, by type of data and uses 

Uses of data

Type/source of data Trends Disparities Policy analyses Behavi

Household Surveys 

Insurance Yes

All sources of insurance (Medicare, Medicaid, empoyer, Medigap) 

According to manyindividual characteristics 

Involving individuals, butnot markets 

Involving not marke

HMO enrollment Covered services 

Usually only for largegeographic areas (census division, sometimes by state) 

Expenditures Yes

Out-of-pocket health care expenses 

According to manyindividual characteristics 

Involving individuals, butnot markets 

Involving not marke

Share of health expenses out of pocket

Difficult to account for changes in out-of-pocketexpenses associated with policy-induced changes in utilization or insurance. 

Out of pocket premiumsShare of income for out of pocket premiums and/or healthcare expenses 

Usually only for largegeographic areas (census division, sometimes by state) 

Administrative Data 

Public programs

Program enrollment in aggregate and by type 

Only for individualcharacteristics captured in enrollment files 

Involving markets, but not 

individuals

Involving 

individua

Choices and premiums forMedicare + Choice by local area 

Yes 

By geographic area 

70
71

Table 1. Availability of data from different sources, by type of data and uses (cont'd) 

Uses of data

Type/source of data Trends Disparities Policy analyses Behavi

Administrative Data (cont'd)

Insurance regulation

Medigap enrollment by plan type and prices 

Yes 

By state Unlikely Unlikely 

Employer Surveys 

Enrollment, premiums, coveredservices, benefit provisions ofcurrent retirees

By employer characteristics 

Options (premiums, coveredservices, benefit provisions)available to current retirees 

Not by individualcharacteristics 

Retirement benefits promised toactive workers

Usually only for very large geographic areas (census region) 

Yes Involving employers, but not

individuals or markets 

Involving individua
Discussants’ Remarks: Gathering Critical Information about 

the Health Coverage of the Elderly 

Melinda Beeuwkes Buntin and Jeannette A. Rogowski, RAND

Paper prepared for the 

Health Insurance for the Elderly: Issues in Measurement Workshop, April 2003 

 

Sponsored by the Federal Interagency Forum on Aging-Related Statistics 

And the Agency for Healthcare Research and Quality 

April 29, 2003, Washington, DC 

Suggested citation: Buntin, Melinda Beeuwkes and Rogowski, Jeannette A. “Discussants’ 

remarks: Gathering critical information about the health coverage of the elderly.” In 

Potter, D.E.B., and Vistnes, Jessica (editors). Health Insurance for the Elderly - Issues in 

Measurement Workshop, April 2003: Meeting Summary, Commissioned Papers and 

Discussant’s Remarks. Agency for Healthcare Research and Quality Working Paper No. 

06003, March 2006, http://www.gold.ahrq.gov. 

AHRQ Working Papers provide preliminary analysis of substantive, technical and 

methodological issues. The papers are works in progress and have not undergone a 

formal external peer review. They are distributed to share valuable experience and 

research. Comments are welcome and should be directed to the authors. The views 

expressed are those of the authors and no official endorsement by the Agency for 

Healthcare Research and Quality, the Department of Health and Human Services, or the 

member Agencies of the Federal Interagency Forum on Aging Related Statistics is 

intended or should be inferred. 

Corresponding authors: 

Melinda Beeuwkes Buntin, Ph.D. 

Jeannette A. Rogowski, Ph.D. 

Center for Employer-Sponsored Health and Pension Benefits 

RAND 

1200 South Hayes Street 

Arlington, VA 22202-5050 

E-mail: jar@rand.org 

E-mail: buntin@rand.org

 

72
Discussants’ Remarks: Gathering Critical Information about the Health Coverage 

of the Elderly 

Knowledge about the health insurance coverage, use of health care services, and health 

status of the elderly is critical for policymakers and providers. Much of the information 

that policymakers currently rely on comes from national surveys. But both decision 

makers and researchers are concerned that current knowledge levels are inadequate. Both 

groups have expressed a strong interest in gathering more information about consumers, 

utilization, and outcomes. In this context, the Federal Interagency Forum on Agingrelated Statistics workshop fostered an important discussion about the key indicators of 

trends in health and health insurance for the elderly. 

At first glance, it might seem that the easiest way to increase our knowledge about elders’ 

health care would be to expand existing surveys. Unfortunately, the current economic 

climate has made funders less willing to support expensive survey work. Further, data is 

becoming more difficult to collect as concerns grow about confidentiality and health care 

consumers and providers succumb to “survey fatigue.” A different approach is needed. 

In order to expand the amount of information collected about insurance coverage and the 

health status of the elderly, the research community will need to take better advantage of

the information collected about those topics for other reasons. 

Workshop participants identified three broad categories of questions about health 

insurance coverage for the elderly. They are: 

• What types of coverage do the elderly have?

• What are the characteristics of beneficiaries with each type of coverage? 

• What are the benefits covered by these policies?

These are all important questions, and such information clearly needs to be collected 

about nationally representative samples of the elderly. 

Of course, researchers and policymakers already have some information on these 

subjects. As Czajka and Chollet note in other papers in this volume, current national 

surveys do a good job of collecting information about the types of coverage held by the 

elderly. Surveys produce valuable information about enrollment in public programs such 

as Medicare and Medicaid and about privately purchased insurance – both individual 

coverage and employer-sponsored coverage. Surveys also quantify the extent to which 

the elderly are uninsured. 

 

This is no surprise as surveys are well positioned to collect information about the 

characteristics of the elderly. They can collect detailed self-reported demographic data 

about respondents. Some surveys (e.g. the Health and Retirement Survey [HRS]) collect 

extensive information on income and assets, others collect information about out-ofpocket spending for a wide variety of health care services (e.g. the Medicare Current 

Beneficiary Survey [MCBS]). They also collect information about respondents’ 

perceived access to care and unmet needs for care. 

 

73
 

However, researchers and policymakers need access to more than just a description of the 

health insurance coverage of the elderly. It is vitally important to better understand how 

health outcomes relate to that coverage. Some of the data needed to address that question 

is already available. The national surveys of the elderly discussed at the workshop do 

collect good information about respondents’ health status and functioning. This 

information includes self-reported health status, self-reported diagnoses, and self-reported 

functional limitations. All of the surveys will, therefore, support observational studies 

that correlate insurance coverage with health status. 

Estimating a causal relation is difficult, however, due to the potential for endogeneity. 

These types of estimation problems have been successfully addressed in prior research on 

the use of medical services among the elderly by the use of historical information such as 

job histories to identify the effects of insurance coverage. A strength of longitudinal 

surveys such as the HRS and PSID is the direct observation of historical variables for 

respondents. For surveys that are not longitudinal in nature, this could be remedied by 

asking respondents a key set of historical questions. 

Survey data about the health outcomes of the elderly could be improved in two other 

ways as well. First, living arrangements are an important indicator of health outcomes 

for the elderly. Elderly persons generally prefer to remain in their homes if possible, and 

thus a transition to assisted living or a nursing home can represent an undesired outcome 

of a health decline in and of itself. A transition out of independent living in the 

community can also capture an overall decline in functioning past a point where a person 

can care for himself or herself. It can thus serve as a summary measure of health status 

and indicate a key change in health status that may not be captured by diagnoses or even 

measures of activities of daily living. In addition, the aging of the population has led to 

an explosion in the range of housing arrangements available to elders. Better 

identification of the living arrangements of the elderly, and the supportive services 

available to them in those locations, would be a valuable addition to national surveys. 

Second, the benefits provided by private health insurance plans are another area where 

improved data could be useful to researchers and policymakers. Given the debate about 

adding prescription drug coverage to Medicare, more information about the drug 

coverage and the use of pharmaceuticals by the elderly is needed to both shape federal 

policy and to track the effects of such coverage if it is offered. The other characteristics 

of supplemental insurance, especially managed care plans and employer-sponsored 

policies that differ from the standard Medigap policies, are also poorly understood. 

Agreement about a standard set of key characteristics of these plans would facilitate 

uniform data collection in this area. Offers of employer-sponsored retiree insurance that 

are turned down are another important dimension of coverage that should be added to 

national surveys– and one that only surveys can track (Chollet, 2003). 

In an era of diminishing resources and response rates it is not feasible to simply add 

questions to existing surveys. In order to collect information in these new areas, 

 

74
therefore, researchers need to look aggressively for ways to get the most information out 

of our limited budgets and time with respondents. 

One way to do this is to take greater advantage of existing administrative data sources 

that can be linked to national surveys. Data from Medicare and Medicaid administrative 

records as well as data collected about Medicare HMOs could be linked to survey 

responses. Social Security and public employee retirement benefit programs could 

provide data. The VA and the Department of Defense could also theoretically provide 

data. Linking information from these sources to data collected using surveys would 

reduce the amount of time that surveys must devote to collecting that information. 

Linked data from federal sources alone could provide information about personal 

characteristics, health status, health care use, and many sources of coverage. Most of the 

elderly are covered by Medicare, so basic information about their demographics is 

available in enrollment records. Social Security records contain data on income and 

earnings histories. These records may, in fact, be more useful than current self-reported

income among the elderly who may have low incomes but large assets such as an 

unmortgaged home. Medicare claims records can provide diagnostic information and 

information about types and amounts of care accessed. In addition, new patient

assessment instruments, such as the Minimum Data Set for nursing home residents 

(MDS), are being collected by the Centers for Medicare and Medicaid Services. These 

assessments capture information about patients’ health status and functioning, and are 

filled out for all residents of Medicare- or Medicaid-certified nursing homes, not just

those whose care is paid for by public programs. The Centers for Medicare and Medicaid 

Services has also developed a centralized dataset that includes Medicaid claims for 

beneficiaries in all 50 states. Finally, nearly a third of Medicare beneficiaries with 

supplemental coverage get it through Medicaid or a Medicare HMO. A significant 

fraction supplement Medicare with VA, military retiree, or public employee retirement 

programs. Enrollment in these sources of supplemental coverage and the benefits 

covered under them can be collected from government agencies. 

Linkages of this sort are feasible. Indeed, there are good precedents for them. The 

MCBS has always incorporated Medicare claims and administrative data into its public 

use files. The HRS has recently completed a successful effort to link Medicare claims to 

its survey responses. In order to do this it obtained permission to link the records from 

respondents. New CMS repositories of Medicaid data and nursing home patient 

assessment data will make linking these additional sources of administrative easier than it 

might have been in the past. 

In summary, surveys are absolutely necessary for collecting certain types of information 

— including many of the new data elements suggested at the workshop. However, they 

are expensive to field, place a burden on respondents, and are increasingly suffering from 

declining response rates. In addition, federal funding for expansions of these surveys is 

unlikely, so adding new questions will likely need to be balanced by eliminating others. 

 

 

75
Administrative data sources contain much of the information that researchers and 

policymakers seek about insurance coverage held by the elderly. They also contain 

largely untapped information about health status and functioning. Linking these data 

sources to national surveys would be a wise investment and could free up respondent 

time and survey resources for other items that only surveys can collect. 

 

76
Closing Comments 

Questions-and-Answers 

Dr. Thesia Garner expressed concern about privacy and the use of administrative data. Dr. 

Chollet noted that some administrative data sets are audited, but other data are suspect. 

Confidentiality issues depend on who matches the data and who has control over matched data. 

Source organizations can sequester databases and require researchers to use the data only in 

that setting. Generally, if the reasons for matching the data are compelling, the means for 

preserving confidentiality are compelling. Respondents are increasingly reluctant to give 

Social Security numbers, which are required for matching data. Dr. Buntin noted that 

respondents are more likely to provide Medicare numbers, which permits data linking. Dr. 

Judith Kasper commented on the technical difficulty of data matching. Fortunately, there is an 

established system for matching data and maintaining confidentiality through the use of data 

centers. A participant pointed out that providing a Social Security number and permitting a 

researcher to match your data are two different issues. It might be possible to match data using 

the last four digits of a Social Security number. 

Dr. David Weir remarked that more detailed consent forms reduce the response rate, and 

respondents do not necessarily feel more secure with more information. In general, survey 

response rates are declining, and empirical work is needed to determine the causal factors. Dr. 

Short suggested that researchers should consider carefully the occasions when linked data 

really are necessary. Data matching is not always essential, and there are many research 

questions for which obtaining an average estimate and a sense of the larger correlations is 

sufficient. 

Dr. Bruce Stuart remarked that the need to link data depends on their use. For policy research 

and some behavior research, data linking is critical. He observed that although the discussion 

has focused on insurance coverage, one way to achieve coverage for more elderly individuals 

is to reduce the transaction price. For example, drug discount cards often offer significant 

savings and confer value. Such programs might provide the services elderly people need 

without being insurance coverage per se. Lower prices are a substitute for insurance, and those 

interested in improving coverage among the elderly should consider alternative options. 

Dr. Marsha Gold commented on the need to consider the effect of health care system changes 

on administrative data sources. Administrative data on cost and use represent a relatively small 

piece of the data, but they are growing in importance. Federal agencies should consider 

coordinating data collection in a special sample survey. Such a survey would rotate through 

special questions asked every few years. 

 

77
Recommendations and Facilitated Discussion 

Dr. Czajka made the following recommendations for expanding the Chartbook indicators: 

• Include as an indicator the percentage of Medicare beneficiaries who supplement their 

coverage and in what ways—This indicator would highlight the limits of Medicare and 

would probably show a significant change over time. 

• Include as an indicator the coverage of persons without Medicare—Such an indicator 

would complement the current composition of the Chartbook. However, samples of about 

500 may not support analyses of interest with sufficient precision. Another potential 

problem is that survey undercoverage may be concentrated in this segment. 

Dr. Czajka presented the following recommendations for data development priorities: 

Incorporate more information on benefits into person-level databases—Although researchers 

have considered this a priority for many years, the obstacles have been difficult to overcome. 

To advance the issue, perhaps Federal agencies might lead an effort to identify what has 

worked, what has not worked, and what could work to enhance the insurance information in 

person-level databases. 

Fill the data gaps identified in the four key data sources for Medicare and supplemental 

insurance coverage among the elderly—It would be particularly helpful if both NHIS and 

MEPS obtained more complete information on whether individuals participate in Medicare 

Parts A and B. The NHIS should collect information on the Medigap plan letter and its 

associated enrollment. 

Learn more about the population without Medicare and identify additional data needs to 

advance our understanding of this group—Analysis of this population might reveal that 

undocumented immigration plays a role in lack of insurance coverage. Advancing this issue 

will probably require novel approaches to survey research. 

Dr. Chollet supported Dr. Czajka’s recommendations for the Chartbook indicators and added 

the following: 

• Current health insurance coverage by source (especially retiree health insurance benefits) 

• Premiums paid as a percentage of total health expenditures and personal income (i.e., 

financial burden on households) 

Dr. Chollet recommended the following data development priorities: 

• To better measure access:

– Examine new coverage in the last year and the type of coverage taken up 

– Ask whether coverage was offered or denied 

– Determine the respondent’s reasons for purchase/acceptance or rejection 

 

78
• To better measure affordability (the most proximate data need): 

– Examine the premium paid per total expenditures for health care 

• To better understand the impact of geography on access and affordability of health 

insurance among the elderly population, obtain regional, State, and market estimates. 

Facilitated Discussion 

Because identifying an individual’s state raises confidentiality concerns, Dr. Gold suggested 

categorizing states according to coverage availability and market characteristics. Such 

categorization might provide the necessary contextual variables without privacy violations. Dr. 

Jennifer Madans, Associate Director for Science at NCHS, noted that the number of useful 

categories would be too large. Unfortunately, it does not take much information to identify a 

state. Dr. Gold remarked that an interagency group might work on the issue. 

Several researchers commented that the amenities at and remote access to federal data centers 

could be improved. Obtaining access to the centers present practical and budgetary challenges 

to many investigators. 

A participant noted that survey respondents are often not accurate when they describe their 

insurance coverage. The field should develop a framework for addressing this issue and other 

challenges to conducting surveys on insurance. Dr. Steve Cohen commented that the data 

sources vary in accuracy. Substantive information is available to assess the accuracy of 

expenditure surveys. Generally, reports of insurance use and high-level coverage are fairly 

accurate, although the reports of benefit details are questionable. Administrative data can 

produce national estimates to benchmark survey results. 

Conclusion 

Ms. D.E.B. Potter, Chair of the Workshop Planning Committee, thanked the participants. She 

remarked that the Planning Committee would distribute the two commissioned papers with 

discussant comments incorporated. Dr. Steve Cohen expressed special appreciation to the 

speakers and thanked all participants for their contributions to a productive discussion. 

 

79
Epilogue 

Passage of the Medicare Modernization Act (MMA) 

John Czajka, Mathematica Policy Research 

Paper prepared after the 

Health Insurance for the Elderly: Issues in Measurement Workshop, April 2003 

 

Suggested citation: Czajka, John. “Epilogue - Passage of the Medicare Modernization Act 

(MMA). ” In Potter, D.E.B., and Vistnes, Jessica (editors). Health Insurance for the Elderly - 

Issues in Measurement Workshop, April 2003: Meeting Summary, Commissioned Papers and 

Discussant’s Remarks. Agency for Healthcare Research and Quality Working Paper No. 

06003, March 2006, http://www.gold.ahrq.gov. 

AHRQ Working Papers provide preliminary analysis of substantive, technical and 

methodological issues. The papers are works in progress and have not undergone a formal 

external peer review. They are distributed to share valuable experience and research. 

Comments are welcome and should be directed to the authors. The views expressed are those 

of the authors and no official endorsement by the Agency for Healthcare Research and Quality, 

the Department of Health and Human Services, or the member Agencies of the Federal 

Interagency Forum on Aging Related Statistics is intended or should be inferred. 

Corresponding author: 

John Czajka , Ph. D. 

Research Division 

Mathematica Policy Research 

600 Maryland Ave., SW, Suite 550 

Washington, DC 20024-2512 

E-mail: jczajka@mathematica-mpr.com

 

80
Epilogue 

On December 8, 2003, just seven months after the Workshop, the President signed into law the 

Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003 (P.L. 108-

173). The changes introduced into Medicare by the MMA will affect aspects of the health 

insurance coverage of the elderly discussed at the Workshop. Most notably, Title I of the Act 

establishes a significant prescription drug benefit that becomes available to Medicare 

beneficiaries on January 1, 2006. Identified as Part D, the new program is open to Medicare 

beneficiaries who are entitled to Part A or enrolled in Part B. Participants in Part D pay a 

discounted monthly premium, currently priced at just under $37.1

 Low-income beneficiaries 

pay lower premiums and lower coinsurance costs. In addition, the prescription drug coverage 

provided under Medicaid to full-benefit dual eligibles was converted to a Medicare drug plan. 

 

Title II of the MMA replaces the Medicare+Choice program (Part C) with the new Medicare 

Advantage (MA) program, intended to provide beneficiaries with greater access to coordinated 

private plans—particularly regional PPOs. Enrollees in MA are able to obtain Part D or even 

more comprehensive drug coverage through their individual plans. Medigap drug coverage 

was affected as well. The limited prescription drug coverage that was provided to beneficiaries 

holding Medigap plans H, I, and J is no longer offered to new enrollees in those plans, and it is 

anticipated that many enrollees will elect to replace their existing drug coverage with the more 

comprehensive and less costly Part D. Lastly, a separate retiree subsidy will enables 

employers and unions to provide prescription drug coverage to retirees at lower costs than they 

paid previously. 

 

The changes introduced by the MMA will generate new data needs as well. It will be

important to know which Medicare beneficiaries are enrolled in Part D or obtaining an 

equivalent or even greater level of coverage under an MA plan. Furthermore, knowing that a 

Medicare beneficiary is enrolled in one of Medigap plans H, I, or J will no longer be sufficient 

to document that individual’s drug coverage. The enrollment date will be needed to determine 

whether drug coverage is included in the plan. The prospective changes to private plan 

offerings under MA will increase the importance of documenting both access to such coverage 

and the types of plans in which Medicare beneficiaries choose to enroll. 

 

To the extent that beneficiaries’ choices are documented in the Medicare administrative files, 

this information will become available to the MCBS. The other surveys, however, will have to 

develop new questions to capture these same aspects of coverage that the MCBS can obtain 

from administrative data, and all of the surveys—including the MCBS—will be tasked to 

develop additional questions to capture nuances of coverage and, especially, access, that are 

not recorded in the administrative files. 

 1

 Current information on Part D premium costs is available from the Official U.S. Government Site for People 

with Medicare (http://www.medicare.gov/). 

 

81
Appendix 1: 

Agenda for the 

Health Insurance for the Elderly: Issues in Measurement 

Workshop, April 29, 2003 

 

82
Federal Interagency Forum on Aging-Related Statistics and the 

Agency for Healthcare Research and Quality

Health Insurance for the Elderly: Issues in Measurement Workshop 

Bureau of Labor Statistics Conference Center, 2 Massachusetts Avenue, NE, Basement–Floor G, Washington, D.C.

April 29, 2003 

FINAL AGENDA 

8:30–9:00 a.m. Continental Breakfast 

9:00–9:10 Welcome and Introduction 

Chair of Morning Session: Steven B. Cohen 

 Agency for Healthcare Research and Quality

9:10–9:30 Overview of Health Insurance Options for the Elderly 

Mary Laschober, BearingPoint, Inc. (formerly KPMG 

 Consulting)

INDIVIDUAL TALKS TO FOCUS ON THE FOLLOWING QUESTIONS FOR SPECIFIC TOPICS: 

Present issues related to coverage? Future issues? What should be measured? 

9:30–9:45 Employer-sponsored insurance 

Paul Fronstin, Employee Benefit Research Institute

9:45–10:00 Medigap 

Tom Rice, University of California at Los Angeles

10:00–10:15 Medicare Managed Care 

Carlos Zarabozo, Centers for Medicare and Medicaid Services 

10:15–10:30 Medicaid 

Judy Kasper, Johns Hopkins University 

10:30–10:45 Break 

10:45–11:15 Q&A/Discussion 

11:15–11:30 Prescription drug coverage 

Bruce Stuart, University of Maryland 

11:30–11:45 Long-term care 

Marc Cohen, LifePlans Inc. 

11:45 – 12:15 p.m. Q&A/Discussion 

 

83
(Agenda continued) 

12:15–1:30 Lunch (on your own) 

Chair of Afternoon Session: Jon Gabel

Health Research and Educational Trust 

1:30–2:30 Presentation and Discussion of Commissioned Paper #1— 

Data sources/measures on actual coverage and benefits 

John Czajka, Mathematica Policy Research 

Discussants: Pamela Farley Short, Pennsylvania State University 

 Jeannette A. Rogowski, RAND 

 Melinda Beeuwkes Buntin, RAND 

2:30–2:45 Break 

2:45–3:45 Presentation and Discussion of Commissioned Paper #2—

Data sources/measures on accessibility and affordability 

Deborah Chollet, Mathematica Policy Research 

Discussants: Pamela Farley Short, Pennsylvania State University 

 Jeannette A. Rogowski, RAND 

 Melinda Beeuwkes Buntin, RAND 

3:45–5:00 Facilitated discussion on the intersection of policy issues and data 

needs 

5:00 Adjourn 

 

84
Appendix 2: 

Summary of Major Data Sources Available To Measure 

 Health Insurance for the Elderly 

 

85
Summary of Major Data Sources Available to 

Measure Health Insurance for the Elderly 

Web site addresses provided in this Appendix were valid as of March 7, 2006. 

Federal Sources 

Agency for Healthcare Research and Quality (AHRQ) 

Medical Expenditure Panel Survey 

The Medical Expenditure Panel Survey (MEPS) is an ongoing annual survey of the civilian 

noninstitutionalized population that collects detailed information on health care use and 

expenditures (including sources of payment), health insurance, income, health status, access, 

and quality of care. MEPS, begun in 1996, is the third in a series of national probability 

surveys conducted by the Agency for Healthcare Research and Quality on the financing and 

use of medical care in the United States. To yield more complete information on health care 

spending and payment sources, followback surveys of health providers are conducted for a 

subsample of events in MEPS. 

Medical Expenditure Panel Survey–Household Component (MEP–HC) 

The HC collects data on a sample of families and individuals across the Nation, drawn from a 

nationally representative subsample of households that participated in the prior year's NCHS 

National Health Interview Survey. The objective is to produce annual estimates for a variety of 

measures of health status, health insurance coverage, health care use and expenditures, and 

sources of payment for health services. These data are used to generalize to people in the 

civilian noninstitutionalized population of the United States, as well as to conduct research in 

which the family is the unit of analysis. The panel design of the survey, which features several 

rounds of interviewing covering 2 full calendar years, makes it possible to determine how 

changes in respondents' health status, income, employment, eligibility for public and private 

insurance coverage, use of services, and payment for care are related. Because the data are 

comparable to those from earlier medical expenditure surveys, it is possible to analyze longterm trends.

Medical Expenditure Panel Survey–Insurance Component (MEP–IC)

The IC consists of two subcomponents, the household sample and the list sample. The 

household sample collects detailed information on the health insurance held by and offered to 

respondents to the MEPS HC.1

 The number of employers and union officials interviewed 

varies from year to year, as the number of respondents in the previous year's HC varies. These 

data, when linked back to the original household respondent, allow for the analysis of 

individual behavior and choices made with respect to health care use and spending. The list 

sample consists of a sample of business establishments and governments throughout the United 

 1

 The MEPS IC linked to the MEPS Household Survey is conducted periodically and was conducted in 1996-1999 

and again in 2001. 

 

86
States. From this survey, national, regional, and State-level estimates (for almost all States each 

year) can be made of the amount, types, and costs of health insurance available to Americans 

through their workplace. 

For more information, contact: MEPS Project Director 

Phone: (301) 427–1656 

E-mail: mepspd@ahrq.gov 

Internet: http://www.meps.ahrq.gov 

Bureau of Labor Statistics (BLS) 

Current Employment Statistics (CES) 

Each month the Current Employment Statistics (CES) program surveys about 160,000 

businesses and government agencies, representing approximately 400,000 individual worksites, 

in order to provide detailed industry data on employment, hours, and earnings of workers on 

nonfarm payrolls. 

For more information, contact: U.S. Bureau of Labor Statistics, Division of Current 

Employment Statistics 

Phone: (202) 691-6555 

Email: cesinfo@bls.gov 

Internet: http://www.bls.gov/CES 

National Compensation Survey (NCS)

The NCS provides data on employer expenditures for wages, salaries, and benefits, as well as 

details of employer-provided benefits. Data are shown by sector of the economy (private 

industry, and State and local government), occupational groups, selected worker characteristics 

(such as full time and part time, and union and nonunion), and establishment characteristics 

(such as number of employees and geographic area). NCS benefits measures cover the 

incidence and detailed provisions of selected employee benefit plans. Data are presented as the 

percentage of employees who have access to, or participate in, a broad selection of prevailing 

benefits. Limited provision data are available for benefits such as leave (paid vacations, and 

holidays), disability insurance (short-term and long-term), and life insurance. NCS provides 

extensive provision data for two major benefit areas: (1) health insurance and (2) retirement 

(both defined-benefit and defined-contribution plans) (Source: 

http://www.bls.gov/opub/hom/homch8_a.htm). 

For more information, contact: U.S. Bureau of Labor Statistics, Office of Compensation and 

Working Conditions 

Internet: http://www.bls.gov/ncs/home.htm 

 

87
Employee Benefits Survey (EBS) 

This survey has been discontinued. For additional information see “Employee Benefits Survey: 

A BLS Reader (February 1995) - (only in hard copy) (Source: 

http://www.bls.gov/ncs/ebs/home.htm). 

Centers for Disease Control and Prevention (CDC) 

Behavioral Risk Factor Surveillance System (BRFSS)

The BRFSS is a telephone survey conducted by the health departments of all states, the District 

of Columbia, Puerto Rico, the Virgin Islands, and Guam with assistance from CDC. The 

BRFSS is the largest continuously conducted telephone health surveillance system in the 

world. States use BRFSS data to identify emerging health problems, to establish health 

objectives and track their progress toward meeting them, and to develop and evaluate public 

health polices and programs to address identified problems. The BRFSS is the primary source 

of information for states and the nation on the health-related behaviors of adults. States collect 

data through monthly telephone interviews with adults aged 18 years or older. BRFSS 

interviewers ask questions related to behaviors that are associated with preventable chronic 

diseases, injuries, and infectious diseases (Source: 

http://www.cdc.gov/NCCDPHP/aag/aag_brfss.htm). 

For more information, contact: BRFSS 

Internet: http://www.cdc.gov/brfss/index.htm 

Centers for Medicare and Medicaid Services (CMS) 

Medicare Current Beneficiary Survey (MCBS)

The Medicare Current Beneficiary Survey (MCBS) is a continuous, multipurpose survey of a 

representative sample of the Medicare population designed to help the Centers for Medicare & 

Medicaid Services (CMS) administer, monitor, and evaluate the Medicare program. The 

MCBS collects information on health care use, cost, and sources of payment; health insurance 

coverage; household composition; sociodemographic characteristics; health status and physical 

functioning; income and assets; access to care; satisfaction with care; usual source of care; and 

how beneficiaries get information about Medicare. 

MCBS data enable CMS to determine sources of payment for all medical services used by 

Medicare beneficiaries, including copayments, deductibles, and noncovered services; develop 

reliable and current information on the use and cost of services not covered by Medicare (such 

as prescription drugs and long-term care); ascertain all types of health insurance coverage and 

relate coverage to sources of payment; and monitor the financial effects of changes in the 

Medicare program. Additionally, the MCBS is the only source of multidimensional personbased information about the characteristics of the Medicare population and their access to and 

satisfaction with Medicare services and information about the Medicare program. The MCBS 

sample consists of Medicare enrollees in the community and in institutions. 

The survey is conducted in three rounds per year, with each round being 4 months in length. 

MCBS has a multistage, stratified, random sample design and a rotating panel survey design. 

 

88
Each panel is followed for 12 interviews. In-person interviews are conducted using computerassisted personal interviewing. Approximately 16,000 sample persons are interviewed in each 

round. However, because of the rotating panel design, only 12,000 sample persons receive all 

three interviews in a given calendar year. Information collected in the survey is combined with 

information from CMS administrative data files and made available through public-use data 

files. 

For more information, contact: MCBS Staff 

E-mail: MCBS@cms.hhs.gov 

Internet: http://www.cms.hhs.gov/mcbs 

The Research Data Assistance Center 

Phone: (888) 973–7322 

E-mail: resdac@umn.edu 

Internet: http://www.resdac.umn.edu 

CMS Medicare Administrative Data 

Medicare Managed Care Market Penetration for All Medicare Plan Contractors - Quarterly 

State/County/Plan Data Files 

For more information, contact: Russell Hendel (extraction of data, production/ update of web 

file), Joanne Weller (contact for obtaining Zip-gender-age data*1, liaison for CMS component 

responsible for payment files), James Dorsey (liaison for CMS component responsible for 

payment files) 

Email: Rhendel@Cms.Hhs.Gov, Jweller@Cms.Hhs.Gov, Jdorsey1@Cms.Hhs.Gov 

Internet: http://www.cms.hhs.gov/healthplans/statistics/mpscpt/ 

Medicare Compare 

A consumer database with detailed comparisons of the benefits, costs, consumer satisfaction 

survey results and standardized quality measures of available managed care plans across the 

country. 

For more information, contact: CMS 

Internet: http://www.medicare.gov/Download/DownloadDB.asp

Medicare Consumer Assessment of Health Plans Survey (Medicare CAHPS)

An annual nationwide survey that is used to report information on Medicare beneficiaries'

experiences with managed care plans. The results are shared with Medicare beneficiaries and 

the public.

For more information, contact: CMS 

Internet: http://www.resdac.umn.edu/OtherDataSets/CAHPS.asp, 

http://www.cms.hhs.gov/ConsumerResearch/05_CAHPS.asp 

 

89
Department of Veterans Affairs (VA) 

National Survey of Veterans, 2001 

The 2001 National Survey of Veterans (NSV) is a multipurpose survey used primarily to 

describe characteristics of the veteran population and of users and nonusers of Department of 

Veterans Affairs (VA) benefit programs. Survey topics include sociodemographic and 

economic characteristics, military background, health status measures, and VA and non-VA 

benefits usage. NSV was conducted by telephone with approximately 20,000 veterans, and 

interviews lasted an average of 35 minutes. The target population is all veterans residing in 

households in the United States and Puerto Rico. Because of the aging of the veteran 

population and the sampling methodology, a large portion (40 percent) of the sample is of 

veterans age 65 and over. The Department of Veterans Affairs Web site provides many data 

tables that classify veterans by age, including the 65 and over age group. 

For more information, contact: Susan Krumhaus 

Phone: (202) 273–5108 

E-mail: Susan.Krumhaus@mail.va.gov 

Internet: http://www.va.gov/vetdata/surveyresults/index.htm; 

http://www.va.gov/vetdata/surveyresults/index.htm 

Survey of Veteran Enrollees’ Health and Reliance Upon VA, 2003 

The 2003 Survey of Veteran Enrollees’ Health and Reliance Upon VA is the fourth in a series 

of surveys of veteran enrollees for VA health care conducted by the Veterans Health 

Administration (VHA), within the Department of Veterans Affairs (VA), under multiyear 

OMB authority. Previous surveys of VHA-enrolled veterans were conducted in 1999, 2000, 

and 2002. All four VHA surveys of enrollees consisted of telephone interviews with stratified

random samples of enrolled veterans. In 2000, 2002, and 2003, the survey instrument was 

modified to reflect VA management’s need for specific data and information on enrolled 

veterans. 

As with the other surveys in the series, the 2003 Survey of Veteran Enrollees’ Health and 

Reliance Upon VA sample was stratified by Veterans Integrated Service Network, enrollment 

priority, and type of enrollee (new or past user). Telephone interviews averaged 12–15 minutes 

in length. In the 2003 survey, interviews were conducted during August-September 2003. Of 

approximately 6.7 million eligible enrollees who had not declined enrollment as of December 

31, 2002, some 42,000 completed interviews in the 2003 telephone survey. 

VHA enrollee surveys provide a fundamental source of data and information on enrollees that 

cannot be obtained in any other way except through surveys and yet are basic to many VHA 

activities. The primary purpose of the VHA enrollee surveys is to provide critical inputs into 

VHA Health Care Services Demand Model enrollment, patient and expenditure projections, 

and the Secretary’s enrollment level decision processes; however, data from the enrollee 

surveys find their way into a variety of strategic analysis areas related to budget, policy, or 

legislation. 

 

90
VHA enrollee surveys provide particular value in terms of their ability to help identify not only 

who VA serves but also to help supplement VA’s knowledge of veteran enrollees’ 

demographic characteristics, including household income, health insurance coverage status, 

functional status (ADL and IADL limitations) and perceived health status, their other 

eligibilities and resources, their use of VA and non-VA health care services and “reliance” 

upon VA, and their potential future use of VA health care services. 

For more information, contact: Dee Ramsel, Ph.D. 

Phone: (414) 384–2000, ext. 42353 

E-mail: dee.ramsel@med.va.gov 

Internet: http://www.va.gov/vetdata/healthcare/index.htm

National Center for Health Statistics (NCHS) 

National Health Interview Survey (NHIS)

The National Health Interview Survey (NHIS), conducted by the National Center for Health 

Statistics, is a continuing nationwide sample survey in which data are collected during personal 

household interviews. Interviewers collect data on illnesses, injuries, impairments, and chronic 

conditions; activity limitation caused by chronic conditions; utilization of health services; and 

other health topics. Information is also obtained on personal, social, economic, and 

demographic characteristics, including race and ethnicity and health insurance status. Each 

year the survey is reviewed, and special topics are added or deleted. For most health topics, the 

survey collects data over an entire year. 

The NHIS sample includes an oversample of black and Hispanic people and is designed to 

allow the development of national estimates of health conditions, health service utilization, and 

health problems of the noninstitutionalized civilian population of the United States. The 

response rate for the ongoing part of the survey has been between 94 percent and 98 percent 

over the years. In 1997, the NHIS was redesigned; estimates beginning in 1997 are likely to 

vary slightly from those for previous years. The interviewed sample for 2002 consisted of 

36,161 households, which yielded 93,386 persons in 36,831 families. 

For more information, contact: NHIS staff 

Phone: (866) 441–NCHS 

E-mail: nchsquery@cdc.gov 

Internet: http://www.cdc.gov/nchs/nhis.htm 

National Institute on Aging (NIA) 

Health and Retirement Survey/Assets and Health Dynamics Among the Oldest-Old 

(HRS/AHEAD) 

The Health and Retirement Study (HRS) is a national panel study conducted by the University 

of Michigan’s Institute for Social Research under a cooperative agreement with the National 

Institute on Aging. In 1992, the study had an initial sample of over 12,600 people from the 

1931–1941 birth cohort and their spouses. The HRS was joined in 1993 by a companion study, 

 

91
Asset and Health Dynamics Among the Oldest Old (AHEAD), with a sample of 8,222 

respondents born before 1924 who were age 70 and over and their spouses. In 1998, these two 

data collection efforts were combined into a single survey instrument and field period and were 

expanded through the addition of baseline interviews with two new birth cohorts: Children of 

the Depression Age (CODA—1924– 1930) and War Babies (WB—1942–1947). Plans call for 

adding a new 6-year cohort of Americans entering their 50s every 6 years. In 2004, baseline 

interviews will be conducted with the Early Boomer birth cohort (1948–1953). The combined 

studies, which are collectively called HRS, have become a steady state sample that is 

representative of the entire U.S. population age 50 and over (excluding people who were 

resident in a nursing home or other institutionalized setting at the time of sampling). HRS will 

follow respondents longitudinally until they die (including following people who move into a 

nursing home or other institutionalized setting). All cohorts will be followed with biennial 

interviews. 

The HRS is intended to provide data for researchers, policy analysts, and program planners 

who make major policy decisions that affect retirement, health insurance, saving, and 

economic wellbeing. The study is designed to explain the antecedents and consequences of 

retirement; examine the relationship between health, income, and wealth over time; examine 

life cycle patterns of wealth accumulation and consumption; monitor work disability; provide a 

rich source of interdisciplinary data, including linkages with administrative data; monitor 

transitions in physical, functional, and cognitive health in advanced old age; relate late-life 

changes in physical and cognitive health to patterns of spending down assets and income flows; 

relate changes in health to economic resources and intergenerational transfers; and examine 

how the mix and distribution of economic, family, and program resources affect key outcomes, 

including retirement, spending down assets, health declines, and institutionalization. 

For more information, contact: Health and Retirement Study Staff 

Phone: (734) 936–0314 

E-mail: hrsquest@isr.umich.edu 

Internet: http://hrsonline.isr.umich.edu 

National Long-Term Care Survey (NLTCS)

The National Long Term Care Survey is funded through a Cooperative Agreement (2 U01 

AG0007198) between the National Institute on Aging (NIA) and Duke University's Center for 

Demographic Studies. It is a longitudinal survey designed to study changes in the health and 

functional status of older Americans (aged 65+). It also tracks health expenditures, Medicare 

service use, and the availability of personal, family, and community resources for caregiving. 

The survey began in 1982, and follow-up surveys were conducted in 1984, 1989, 1994, and 

1999. A sixth follow-up survey will be conducted during 2004. 

The NLTCS survey population consists of a sample of 35,000 people drawn from national 

Medicare enrollment files in 1982 that has been augmented with subsequent samples of 

approximately 20,000 Medicare enrollees obtained by adding 5,000 people passing age 65 

between successive surveys done approximately every five years. This technique ensures a 

large, nationally-representative sample at each point in time. Both elderly in the community 

(including those not impaired) and those residing in institutions are represented in the samples. 

 

92
The survey is administered by the U.S. Census Bureau using trained interviewers, and the 

response rate is above 95 percent for all waves. 

Supplemental surveys consist of the Next-of-Kin, Caregiver, and Blood and Buccal surveys 

done under subcontract with ASPE and the Research Triangle Institute (RTI). (Source: 

http://nltcs.cds.duke.edu/) 

For more information, contact: Center for Demographic Studies, Duke University 

Email: vlewis@cds.duke.edu 

Internet: http://nltcs.cds.duke.edu/ 

National Science Foundation (NSF) 

Panel Study of Income Dynamics (PSID)

The Panel Study of Income Dynamics (PSID) is a nationally representative, longitudinal study 

conducted by the University of Michigan’s Institute for Social Research. It is a representative 

sample of U.S. individuals (men, women, and children) and the family units in which they 

reside. Starting with a national sample of 5,000 U.S. households in 1968, the PSID has 

reinterviewed individuals from those households annually from 1968 to 1997 and biennially 

thereafter, whether or not they are living in the same dwelling or with the same people. Adults 

have been followed as they have grown older, and children have been observed as they 

advance through childhood and into adulthood, forming family units of their own. Information 

about the original 1968 sample individuals and their current co-residents (spouses, cohabitors, 

children, and anyone else living with them) is collected each year. In 1990, a representative 

national sample of 2,000 Hispanic households, differentially sampled to provide adequate 

numbers of Puerto Ricans, Mexican Americans, and Cuban Americans, was added to the PSID 

database. With low attrition rates and successful recontacts, the sample size grew to almost 

8,000 in 2003. PSID data can be used for cross-sectional, longitudinal, and intergenerational 

analyses and for studying both individuals and families. 

The central focus of the data has been economic and demographic, with substantial detail on 

income sources and amounts, employment, family composition changes, and residential 

location. Based on findings in the early years, the PSID expanded to its present focus on family 

structure and dynamics as well as income, wealth, and expenditures. Wealth and health are 

other important contributors to individual and family well-being that have been the focus of the 

PSID in recent years. 

The PSID wealth modules measure net equity in homes and nonhousing assets divided into six 

categories: other real estate and vehicles; farm or business ownership; stocks, mutual funds, 

investment trusts, and stocks held in IRAs; checking and savings accounts, CDs, treasury bills, 

savings bonds, and liquid assets in IRAs; bonds, trusts, life insurance, and other assets; and 

other debts. The PSID measure of wealth excludes private pensions and rights to future Social 

Security payments. 

For information, contact: 

Frank Stafford 

Phone: (734) 763–5166 

 

93
E-mail: fstaffor@isr.umich.edu or psidhelp@isr.umich.edu 

Internet: http://psidonline.isr.umich.edu/ 

U.S. Census Bureau 

Current Population Survey (CPS)

The Current Population Survey (CPS) is a nationally representative sample survey of about 

60,000 households conducted monthly for the Bureau of Labor Statistics (BLS) by the U.S. 

Census Bureau. The CPS core survey is the primary source of information on the labor force 

characteristics of the civilian noninstitutionalized population age 16 and over, including 

estimates of unemployment released every month by the BLS. Monthly CPS supplements 

provide additional demographic and social data. The Annual Social and Economic Supplement 

(ASEC), or March CPS Supplement, is the primary source of detailed information on income

and poverty in the United States. The ASEC is used to generate the annual Population Profile

of the United States, reports on geographical mobility and educational attainment, and detailed 

analyses of money income and poverty status. 

Current Population Survey Insurance Verification Question (in the March Supplement of the 

Annual Social and Economic Supplement) 

The Annual Social and Economic (ASEC) Supplement provides the usual monthly labor force 

data, but in addition, provides supplemental data on work experience, income, noncash 

benefits, and migration. Comprehensive work experience information is given on the 

employment status, occupation, and industry of persons 15 years old and over. Additional data 

for persons 15 years old and older are available concerning weeks worked and hours per week 

worked, reason not working full time, total income and income components, and residence on 

March 1, 2004. Data on employment and income refer to the preceding year, although 

demographic data refer to the time of the survey (Source: 

http://www.census.gov/apsd/techdoc/cps/cpsmar04.pdf). 

For more information regarding the CPS, its sampling structure and estimation methodology, 

see “Explanatory Notes and Estimates of Error.” (Explanatory notes and estimates of error. 

Employment and Earnings 51(1):269–86. U.S. Department of Labor, Bureau of Labor 

Statistics. January 2004). 

For more information on the CPS, contact: Division of Labor Force Statistics Staff 

Phone: (202) 691–6378 

E-mail: cpsinfo@bls.gov 

Internet: http://stats.bls.gov/cps/home.htm

Survey of Income & Program Participation (SIPP)

The main objective of SIPP is to provide accurate and comprehensive information about the 

income and program participation of individuals and households in the United States, and 

about the principal determinants of income and program participation. SIPP offers detailed 

information on cash and non-cash income on a sub-annual basis. The survey also collects data 

 

94
on taxes, assets, liabilities, and participation in government transfer programs. SIPP data allow 

the government to evaluate the effectiveness of federal, state, and local programs. The survey 

design is a continuous series of national panels, with sample size ranging from approximately 

14,000 to 36,700 interviewed households. The duration of each panel ranges from 2 1/2 years 

to 4 years. The SIPP sample is a multistage-stratified sample of the U.S. civilian 

noninstitutionalized population. For the 1984-1993 panels, a panel of households was 

introduced each year in February. A 4-year panel was introduced in April 1996. A 2000 panel 

was introduced in February 2000 for 2 waves. A 3-year 2001 panel was introduced in February 

2001. 

The SIPP content is built around a "core" of labor force, program participation, and income

questions designed to measure the economic situation of persons in the United States. These 

questions expand the data currently available on the distribution of cash and noncash income

and are repeated at each interviewing wave. The survey uses a 4-month recall period, with 

approximately the same number of interviews being conducted in each month of the 4-month 

period for each wave. Interviews are conducted by personal visit and by decentralized 

telephone. 

The survey has been designed also to provide a broader context for analysis by adding 

questions on a variety of topics not covered in the core section. These questions are labeled 

"topical modules" and are assigned to particular interviewing waves of the survey. Topics 

covered by the modules include personal history, child care, wealth, program eligibility, child 

support, disability, school enrollment, taxes, and annual income. 

For more information, contact: Judith Eargle, 

Phone: (301) 763-3819 

Internet: http://www.sipp.census.gov/sipp/ 

 

Other Sources 

American Hospital Association (AHA) 

See the Health Research and Educational Trust. 

The Commonwealth Fund 

The Commonwealth Fund has several ongoing surveys related to the elderly population. For 

information on their Biennial Health Insurance Survey and other Commonwealth efforts see 

http://www.cmwf.org/. 

Health Research and Educational Trust (HRET) 

The Health Research and Educational Trust, a charitable trust of the American Hospital 

Association, has conducted the Employer Health Benefits Annual Survey since the late 1980’s. 

For additional information see http://www.hret.org/hret/index.jsp. 

 

95
Robert Wood Johnson Foundation (RWJ) 

Center for Studying Health System Change, Community Tracking Study Surveys (CTS). 

The CTS includes periodic national surveys of households (including an insurer followback), 

physicians and employers. The survey samples are concentrated in 60 communities that were 

randomly selected to provide a representative profile of change across the U.S. Among these 

communities, 48 are "large" metropolitan areas (with populations greater than 200,000), from

which 12 communities were randomly selected to be studied in depth. Those 12 communities 

have larger survey samples and also comprise the communities used for the site visits. 

The survey data can be used to draw conclusions for the nation and for individual 

communities. Having data from multiple surveys for a common set of sites permits analysts to 

relate the individual-level measures obtained from one survey to market-level health system

characteristics obtained from the other surveys. Note, however, that there are no links between 

any of the survey respondents in the household, physician and employer surveys (e.g., 

respondents to the Household Survey are not patients of physicians in the Physician Survey). 

For more information, contact: the Center for Studying Health System Change 

Phone: 202.484.5261 

Email: hscinfo@hschange.org

Internet: http://hschange.org/ 

State Health Access Data Assistance Center, Coordinated State Coverage Survey 

(SHADAC)

The University of Minnesota's State Health Access Data Assistance Center (SHADAC) is 

funded by The Robert Wood Johnson Foundation to help states monitor rates of health 

insurance coverage and to understand factors associated with uninsurance. SHADAC provides 

targeted policy analysis and technical assistance to states that are conducting their own health 

insurance surveys and/or using data from national surveys. 

For more information, contact: SHADAC 

Phone: 612-624-4802 

Email: shadac@umn.edu. 

Internet: http://www.shadac.umn.edu/about/

Henry J. Kaiser Family Foundation

The Kaiser Family Foundation has several ongoing surveys related to the elderly population, 

including the Kaiser/Hewitt Survey on Retiree Health Benefits. For details on the survey and 

other Foundation efforts see http://www.kff.org/. 

 

96
Appendix 3 

Biographical Sketches of Workshop Speakers

 

97
Health Insurance for the Elderly: Issues in Measurement Workshop 

Co-sponsored by: 

Federal Interagency Forum on Aging-Related Statistics and the 

Agency for Healthcare Research and Quality

April 29, 2003 Bureau of Labor Statistics Conference Center 

Washington, D.C.

Biographical Sketches (in order of the speaker’s presentation) 

Steven B. Cohen, Ph.D., is Director, Center Financing, Access and Cost Studies at the Agency for Healthcare

Research and Quality (AHRQ). Dr. Cohen directs a staff of 50 highly trained and skilled economists, statisticians, 

social scientists, and clinicians in support health care policy and behavioral research. He received his M.S. and 

his Ph.D. in biostatistics from the University of North Carolina. 

Dr. Cohen directs the Center’s administration of surveys, including the Medical Expenditure Panel Survey. He 

has authored more than 100 journal articles and publications in the areas of biostatistics, survey research

methodology, estimation, survey design, and health services research. Articles by Dr. Cohen have appeared in

Effective Clinical Practice, Inquiry, and the Journal of Rural Health. In 1997, he was elected a Fellow of the 

American Statistical Association and awarded AHRQ's Health Policy Researcher of the Year. 

Mary A. Laschober, Ph.D., Senior Manager with the Health Economics Practice of BearingPoint in McLean,

VA, for 5 years, is an economist with more than 11 years of experience in health policy analysis. Her work has 

concentrated on Medicare beneficiary information needs and communication strategies, Medicare managed care

markets, the Medicare Savings Programs, and Medicare supplemental insurance coverage. Dr. Laschober has 

provided extensive analytical assistance to the Centers for Medicare & Medicaid Services (CMS) to examine the 

information needs of Medicare and Medicaid beneficiaries and to determine the most effective communication 

strategies for disseminating information to them. In addition to reports discussing implications for CMS’s social 

marketing strategy, Dr. Laschober directed/authored summary reports for African American, Latino,

Medicare/Medicaid “dual eligibles,” and rural beneficiaries, as well as beneficiaries with low education or literacy 

skills and vision- or hearing-impairments. 

Dr. Laschober’s recent work includes a Kaiser Family Foundation-sponsored national survey to study the effects 

of the 1998 Medicare HMO withdrawals on involuntarily disenrolled Medicare beneficiaries, and an empirical

assessment of trends in Medicare beneficiaries’ supplemental insurance and drug coverage. Findings from both 

studies appeared in Health Affairs (Millwood). For CMS, Dr. Laschober has been Principal Investigator for an

analysis of enrollment and disenrollment reasons, patterns, and trends in the Medicare+Choice (M+C) program;

the development of alternative M+C model standardized benefit packages; an evaluation of the new 2003 M+C 

Part B premium reduction benefit plans; a new national survey to better understand the experiences of

beneficiaries newly enrolled in Medicare; and a Congressionally mandated study of projected beneficiary and 

Medicare program impacts from termination of the cost-contracting Medicare HMO program. For dually eligible 

beneficiaries, she conducted an evaluation of a CMS-sponsored pilot program to increase enrollment in the 

Medicare Savings Programs, produced an interactive CD-ROM of dual-eligible outreach and barrier reduction 

strategies, and a comparative profile of program participants and nonparticipants. She will soon be examining

dually eligible beneficiaries’ ratings of Medicare managed care plans using the MMC-Consumer Assessment of 

Health Plans Study data. 

Before BearingPoint, Dr. Laschober was a Senior Economist at Westat, where she was co-lead in developing the 

charge and payment imputation methods for the Medicare Current Beneficiary Survey (MCBS). She also coauthored a study of the demand for out-of-network services by Medicare HMO enrollees, presented at the 1996

 

98
AHSR annual meeting, and produced an annual MCBS data compendium in Health and Health Care of the 

Medicare Population. 

Paul Fronstin, Ph.D., is a Senior Research Associate with the Employee Benefit Research Institute (EBRI), a 

private, nonprofit, nonpartisan organization committed to original public policy research and education on

economic security and employee benefits. He is also Director of the Institute’s Health Security and Quality 

Research Program. He has been with EBRI since 1993. Dr. Fronstin earned his Bachelor of Science degree in

economics from SUNY Binghamton and his Ph.D. in economics from the University of Miami. 

Dr. Fronstin’s research interests include trends in employment-based health benefits, consumer-driven health

benefits, the uninsured, retiree health benefits, employee benefits and taxation, and public opinion about health

care. He has published in numerous journals, including Health Affairs (Millwood), EBRI Issues Brief, and 

Benefits Quarterly. He currently serves on the steering committee for the Mellon College Retirement Project, the 

board of advisors for CareGain, and on the Maryland State Planning Grant Health Care Coverage Workgroup. 

Thomas Rice, Ph.D., is Professor of Health Services in the UCLA School of Public Health. Dr. Rice received his 

doctorate in economics at the University of California at Berkeley in 1982. 

His areas of interest include health insurance, cost containment, Medicare, and the role of competition and

regulation in health care markets. The second edition of his book, The Economics of Health Reconsidered, was 

published by Health Administration Press in 2003. From 1994 to 2000, he served as the editor of the Medical 

Care Research and Review Journal. His articles have been published in the Journal of Health Economics, Health 

Affairs, and the Journal of the American Medical Association. Dr. Rice has received the Young Investigator 

Award (1988) and the Article-of-the-Year Award (1998) from the Academy for Health Services Research and 

Health Policy (currently, AcademyHealth). He is chairing the 2003 Annual Research Meeting of AcademyHealth. 

Dr. Rice served as Department Chair from 1996 to 2000. Before joining the faculty at UCLA in 1991, he was a 

faculty member at the University of North Carolina School of Public Health. 

Carlos Zarabozo is currently (and since 1993) a Social Science Research Analyst in the Policy Planning and 

Analysis Group, Office of Research, Demonstrations and Information of the Centers for Medicare & Medicaid 

Services (CMS, formerly HCFA). 

His primary areas of interest are Medicare managed care, general managed care and insurance issues, and 

Medicare reform proposals. Mr. Zarabozo has authored or co-authored various articles on managed care and drug

benefits, which have appeared in Health Care Financing Review and Health Affairs (Millwood). He was coauthor of the Medicare managed care chapter in The Managed Health Care Handbook (Peter Kongstvedt, editor; 

numerous editions). 

Mr. Zarabozo joined the Office in December of 1993. From 1991 through the end of 1993, he was Director of 

the policy office within HCFA’s Office of Prepaid Health Care Operations and Oversight. From 1988 until 1991, 

he was Special Assistant to the Director of HCFA’s Office of Prepaid Health Care (and successor organizations). 

From 1984 through 1988, Mr. Zarabozo was contract specialist in the Office of Prepaid Health Care, and in 

HCFA’s San Francisco regional office. He has served as a consultant in health care reform for the Agency for 

International Development, the World Bank, and the Pan American Health Organization in the Czech Republic, 

Slovakia, Argentina, Chile, and Costa Rica. 

Judith D. Kasper, Ph.D., is a Professor in the Department of Health Policy and Management in The Johns

Hopkins Bloomberg School of Public Health, Baltimore, MD, and a Senior Research Associate in the Center for 

Health Services Research and Development. Dr. Kasper holds a Ph.D. in sociology from the University of

Chicago. 

 

99
Her research and teaching interests include health policy in disability and long-term care, assessment of needs for 

care and service provision to physically and mentally disabled people, health care financing and access for 

vulnerable population, and the development and application of data sources for health policy analysis and health 

services research. She has published in numerous journals in the fields of health policy, health services research, 

and aging, including Health Services Research, the Milbank Quarterly, and the Journal of Gerontology. 

Dr. Kasper has been Principal or Co-Principal Investigator on several studies of vulnerable elderly people. These 

include the Women’s Health and Aging Study (WHAS), a longitudinal study of 1,000 functionally limited older

women that addresses trajectories in disability and the influence of personal and social characteristics, disease, 

and health care; a study of caregiving to the WHAS population; a study of access to care and unmet needs among 

low income elderly people with Medicare and Medicaid coverage; and a longitudinal study of health services use

and outcomes for community-dwelling elderly persons with Alzheimer’s disease and other dementia. She has 

extensive experience in the design, conduct, and analysis of national population-based surveys that address 

significant health policy and health services research issues, and was a member of the research teams that 

developed and implemented the 1977 National Medical Care Expenditure Survey (now the MEPS conducted by

the Agency for Healthcare Research and Quality [AHRQ]), and the Medicare Current Beneficiary Survey 

(conducted by CMS). 

Dr. Kasper joined the Department in 1987, having previously served as Senior Analyst in the Office on Research

of the Health Care Financing Administration (now the Center for Medicare & Medicaid Services, or CMS) from

1983 to 1987, and as Senior Researcher at the National Center for Health Services Research (now AHRQ) from

1977 to 1983. 

Bruce Stuart, Ph.D., is Professor and Executive Director of the Peter Lamy Center on Drug Therapy and Aging 

at the University of Maryland. Dr. Stuart is an economist and health services researcher. He received his 

economics training at Whitman College and Washington State University. 

Dr. Stuart is an experienced research investigator, having directed numerous grants and contracts with the 

National Institute on Aging (NIA), the Agency for Healthcare Research and Quality (AHRQ), the Centers for 

Medicare & Medicaid Services (CMS), the Assistant Secretary for Planning and Evaluation in DHHS, private 

foundations, State governments, and private corporations. Among his current projects are a study of disease 

management, formulary design, and other managed care policies on Medicaid recipients with asthma funded by

AHRQ; an analysis of cost differences between demented and nondemented nursing home residents for NIA, an

analysis of quality indicators for prescription coverage of the elderly for The Commonwealth Fund: and a study of 

the impact of prescription coverage on Medicare Part A and B spending for CMS. Dr. Stuary co-authored the

book Medicare's Disabled Beneficiaries: The Forgotten Population in the Debate Over Drug Benefits and a report 

on “Graying of Medicare’s Disabled Population: Implication for a Medicare Drug Benefit.” 

He began his career in health services research as an economic analyst and later Director of the Health Research 

Division in the Michigan Medicaid program in the early 1970s. Leaving State government for academe, Dr. 

Stuart taught health economics, finance, and research methods at the University of Massachusetts and The 

Pennsylvania State University. In 1997, he joined the faculty of the University of Maryland School of Pharmacy

as the Parke-Davis endowed Chair in Geriatric Pharmacotherapy and was selected as a Maryland Eminent Scholar

for his work in geriatric drug use. 

Marc A. Cohen, Ph.D., is President of LifePlans, Inc., a long-term care insurance services, risk management and 

research company in Waltham, MA. The company works with insurers, HMOs, foundations, and trade 

associations on issues related to private and public initiatives in long-term care financing for the elderly and 

disabled. Dr. Cohen received his Ph.D. from the Heller School at Brandeis University and his Master’s Degree 

from the Kennedy School of Government at Harvard University. 

Dr. Cohen has conducted extensive research and analysis on a variety of public policy issues affecting the 

development and growth of the long-term care insurance market. He also has developed a number of insurance 

 

100
products and programs for the elderly, conducted research and analysis on issues affecting long-term care 

financing and delivery, and has conducted the only national studies of individual purchasers and nonpurchasers of

long-term care insurance He recently completed the first industrywide study of long-term care insurance

claimants, which was sponsored by the U.S. Department of Health and Human Services and the Robert Wood

Johnson Foundation, and is currently working on a new study of claimants. 

Dr. Cohen has published widely on topics related to long-term care insurance, services utilization, and the 

interactions between the public and private market as well as on public policies affecting the elderly. He has been

asked to testify before Congress, provide testimony to congressional committees and government agencies, and

consult to insurers, HMOs, and retirement communities. 

John L. Czajka, Ph.D., senior fellow at Mathematica Policy Research, Inc. This title is reserved for individuals 

who have nationally recognized expertise in a policy or research field, have established Mathematica as a leader in

a technical or methodological area, and have an outstanding record of achievement in directing large and complex 

projects. 

Czajka, who has a Ph.D. in sociology from the University of Michigan, joined Mathematica in 1978 as a research

sociologist and has built a strong reputation for his substantial technical contributions to the statistical field. His 

work has focused on development of administrative data files, small area estimation, census taking, policy

analysis, and the evaluation of estimates obtained from survey data. He has also directed many studies of health 

insurance coverage, including analyses of the dynamics of coverage over time and the impact of the State 

Children's Health Insurance Program on trends in children's coverage. 

Czajka's work for the Internal Revenue Service has improved the practice of statistics at the Statistics of Income

Division, one of the federal government's major statistical agencies. His research for clients such as the U.S. 

Department of Health and Human Services, the Centers for Medicare & Medicaid Services, and the Social 

Security Administration has been widely cited. Czajka is the immediate past president of the Washington

Statistical Society and a fellow of the American Statistical Association. 

Deborah J. Chollet, Ph.D., is a Senior Fellow at Mathematica Policy Research in Washington, DC. Dr. Chollet 

conducts and manages research on private health insurance coverage, markets, and regulation, including

employer-sponsored health plans for workers and retirees, individual health insurance, and Medicare supplement

plans. She holds M.A. and Ph.D. degrees in economics from the Maxwell School of Citizenship and Public 

Affairs at Syracuse. 

As a senior consultant to the Robert Wood Johnson Foundation’s State Coverage Initiatives program, she 

regularly provides direct technical assistance to States on matters related to private health insurance coverage and 

markets. Dr. Chollet currently serves on the Medicare study panel of the National Academy of Social Insurance 

and on the editorial boards of Benefits Quarterly, the Journal of Insurance Issues, and Health Administration 

Press. She co-authored Mapping State Health Insurance Markets: Structure and Changes in the States' Group

and Individual Health Insurance Markets, 1995-1997 and has published articles in the Journal of Health Politics, 

Policy, and Law; Medicare Brief; and Health Affairs (Millwood). Her previous positions include Vice President 

of Alpha Center (now AcademyHealth), Director of the Center for Risk Management and Insurance Research and 

Associate Professor of Risk Management and Insurance at Georgia State University, Senior Researcher at the 

Employee Benefit Research Institute, and Assistant Professor of Economics at Temple University. 

Pamela Farley Short, Ph.D., is a Professor of Health Policy and Administration at The Pennsylvania State 

University, where she is also Director of the Center for Health Care and Policy Research. She obtained her Ph.D. 

in economics from Yale University in 1984. 

An economist, Dr. Short’s current and recent research involves public and private health insurance programs, the 

uninsured, and the economic consequences of cancer survival. Her work regularly appears in Health Affairs, 

Health Services Research, and Inquiry. Dr. Short is currently the Principal Investigator on a grant from The 

 

101
Commonwealth Fund to continue her studies of health insurance dynamics, for which she is well known. Before

joining the faculty of Penn State in 1997, Dr. Short was a Senior Economist in the Washington office of RAND

and Director of RAND’s Center for the Study of Employee Health Benefits. For a number of years, Dr. Short was 

a Senior Manager in the intramural research program of the Agency for Healthcare Policy and Research, where 

she helped to direct the design and analysis of the 1987 National Medical Expenditure Survey. Dr. Short has

worked in the White House for the Council of Economic Advisers as the Senior Staff Economist for health care 

issues. She served on President Clinton’s Task Force on Health Care Reform and consulted with the first Bush 

Administration on the design of its reform proposals. 

Jeannette Rogowski, Ph.D., is a Senior Economist at RAND with more than 15 years of research experience in 

health economics. She is also an adjunct Senior Fellow of the Leonard Davis Institute of Health Economics at the 

University of Pennsylvania. Dr. Rogowski is the director of RAND’s Center for Employer Sponsored Health and

Pension Benefits. Her ongoing research includes studies of the effects of health insurance availability and 

premium cost on retirement and gender differences in access to employment-based retirement benefits. Dr. 

Rogowski earned her Ph.D. in economics from Massachusetts Institute of Technology and a Bachelor of Science 

from the University of Michigan. 

Dr. Rogowski is nationally recognized for her research on health insurance for older workers. She has written

many articles on the subject and has served in high-level advisory capacities to the White House, the Secretary of 

Labor, and other government agencies on issues related to health insurance for the near elderly. She currently 

serves as Chair of the Health Services Advisory Committee for the Health and Retirement Survey, a large, 

ongoing panel survey of the elderly and near elderly funded by the National Institute on Aging. In that role, she 

has oversight of the health insurance, utilization, and expenditure components of the survey. Dr. Rogowski also 

serves on the HRS Steering Committee. Articles by Dr. Rogowski have appeared in Pediatrics, American Journal

of Public Health, Health Affairs (Millwood), and Health Care Financing Review. 

In related research, Dr. Rogowski also serves as the Co-director of RAND’s Center for Health Care Markets and

Vulnerable Populations. Her research in this area includes studying the effects of changing health care market 

structure on access to care for vulnerable populations and on the quality of care provided by safety net hospitals. 

In recognition of leadership in her fields of work, Dr. Rogowski was named a Fellow of the Association for 

Health Services Research. 

Melinda Beeuwkes Buntin, Ph.D., is a Health Economist at RAND in Arlington, VA. She graduated from the 

Ph.D. Program in Health Policy at Harvard University where she concentrated in health economics and

specialized in the economics of the Medicare program. Her dissertation was entitled “Risk Selection in the 

Medicare Program” and included chapters on techniques for modeling health care costs, the effect of benefits 

packages on risk selection among Medicare+Choice Plans, and the costs of Medicare beneficiaries at the end-oflife. 

Dr. Buntin is working on projects related to Medicare physician payment rates, Medicare financing of end-of-life

care, Medicare+Choice plan benefits packages, and the market for individual health insurance policies in

California. She is also the Principal Investigator on a project to develop a cost, quality, and access to care 

monitoring system for Medicare postacute care generally, with a focus on the effects of the inpatient rehabilitation

prospective payment system. She has published articles in Health Affairs, Inquiry, and The Gerontologist. 

 

102
Appendix 4: 

Glossary Resources on Health Insurance Terms 

 

103
Glossary Resources on Health Insurance Terms 

The reader is directed to the following resources. 

Web site addresses provided in this Appendix were valid as of February 27, 2006. 

Interagency Forum on Aging Related Statistics: Glossary 

 

Developed by the Interagency Forum on Aging Related Statistics this glossary is included in 

the Aging Forum’s report Older America’s 2004: Key Indicators of Well Being. This document 

is posted on the Aging Forum’s web site: 

URL: http://www.agingstats.gov/chartbook2004/glossary.html

Definitions of Health Insurance Terms 

In February 2002, the Interdepartmental Committee on Employment-based Health Insurance 

Surveys approved a set of definitions for use in federal surveys collecting employer-based 

health insurance data. This document is posted on the Agency for Healthcare Research and 

Quality’s Medical Expenditure Panel Survey web site: 

URL: http://www.meps.ahrq.gov/MEPSDATA/ic/ICDefinitions.htm

Glossary of Terms Found on the CMS Web Site 

This glossary explains terms found on the Centers for Medicare and Medicaid Services (CMS) 

web site and contains many terms specific to health insurance for older Americans. 

URL: http://www.cms.hhs.gov/glossary/

 

104