Medicare Risk HMO Withdrawals: Implications for Medicare Subvention

The Department of Defense (DOD) is working with the Department of Health and Human Services (DHHS) to develop for its Medicare-eligible beneficiaries a cost-effective alternative for delivering access to quality care. This alternative, commonly called TRICARE Senior Prime, will give Medicare-eligible beneficiaries the opportunity to enroll in Prime with primary care managers (PCMs) at military treatment facilities (MTFs). TRICARE Senior Prime enrollees will have the same priority access to MTF as military retirees and retiree family members currently enrolled in Prime. At present, this program is in the demonstration phase. DOD should be concerned that many managed care plans have either withdrawn from the Medicare-Choice program entirely or reduced their service areas in the last several years as the Medicare-Choice plan has been phased in. The purpose of this report is to determine what factors have played a part in these withdrawals and how this could affect the viability of the TRICARE Senior Prime program.