GAO: Insurance continuity affects health, costs

Americans insured steadily for about six years before Medicare enrollment were more apt to report being healthy during a six-year Medicare honeymoon period than those without prior coverage according to the U.S. Government Accountability Office. Uninterrupted prior health insurance also led to lower Medicare spending in some service categories.

A December GAO performance audit released last week examined nine years of Medicare claims payment data along with beneficiary information from the Health and Retirement Study between 1996 and 2010. The audit exposed several utilization patterns.

In their first year with Medicare, previously-covered people had about 35 percent less average predicted total spending than those without sustained pre-Medicare coverage. Continuously-insured beneficiaries also had lower hospital outpatient costs in their first two years with Medicare.

And while claims for services by doctors, laboratories and other non-institutional providers were similar during early years of Medicare coverage for both groups, steadily-insured Americans used about 30 percent more non-institutional services four and five years into the program than their previously-uninsured counterparts. This suggested people with checkered health insurance pasts seek and receive higher levels of care.

Overall, the GAO audit "adds to the body of evidence suggesting that beneficiaries with prior insurance used fewer or less costly medical services in Medicare compared with those without prior insurance, because they were either in better health or were accustomed to accessing medical services differently," the report states.

The results also suggested a link between future Medicare costs and the success of individual market enrollment efforts pursuant to the Affordable Care Act. Nearly 7 million Americans between the ages of 55 and 64--representing more than 18 percent of the pre-Medicare population--were uninsured in the first half of 2012, the study noted. Therefore, "the extent to which individuals enroll in private insurance before age 65 has implications for beneficiaries' health status and Medicare spending."

For more:
- read the GAO audit announcement and report (.pdf)

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