NU Online News Service, June 9, 2003, 5:23 p.m. EDT – Military retirees who participate in Medicare health maintenance organizations preferred Medicare HMO coverage to a pilot program that offered military retirees access to the Federal Employees Health Benefits Program, according to the U.S. General Accounting Office.

The GAO prepared a report for several congressional committees to discuss the results of the pilot program.

In 2000, the government gave military retirees living in eight communities a chance to join the same health plans that cover federal civilian employees and retirees. The government added two more communities to the pilot program in 2000 and 2001.

Congress limited participation in the pilot program to 66,000, and, before the program began, some military retiree organizations predicted the program would attract 25% of the eligible retirees, writes Marjorie Kanof, the GAO director who led the team that prepared the report.

In reality, “demonstration-wide enrollment was 3.6% in 2000 and 5.5% in 2001,” Kanof writes.

In 2002, after the program added pharmacy benefits, enrollment fell to 3.2%, Kanof adds.

The total number of enrollees peaked at 7,521 of the 137,230 eligible beneficiaries, Kanof writes.

The GAO researchers found that 9.3% of the eligible beneficiaries who had Medicare supplement insurance and 8.6% of the eligible beneficiaries without employer-sponsored insurance joined the pilot program.

But only 4.7% of the retirees with employer-sponsored health insurance and only 1.8% of the retirees with Medicare HMO coverage signed up, Kanof writes.

The federal health program gives participants a choice of several national and local plans. The plans charged different rates, but the military retirees in the pilot program paid the same rates as other federal employees and retirees.

Some of the retirees who knew about the pilot program avoided the program because they were uncertain about its future, but about two-thirds of the “nonenrollees” who knew about the program said they were satisfied with their existing employer-sponsored coverage or existing Medicare HMO coverage, Kanof writes.

More than one-quarter of the nonenrollees who knew about the pilot program told researchers that the program plans were too expensive.

The full text of the GAO report is available at http://www.gao.gov/highlights/d03547high.pdf