Medicare Spending for Previously Uninsured Adults

doi:10.1059/0003-4819-151-11-200912010-00149

Medicare Spending for Previously Uninsured Adults

From Harvard Medical School, Brigham and Women's Hospital, and Harvard School of Public Health, Boston, Massachusetts, and National Bureau of Economic Research, Cambridge, Massachusetts.

Abstract

Background: Medicare spending after age 65 years may be higher for previously uninsured adults if suboptimal care before this age leads to irreversible complications, persistently elevated clinical risks, or delay of costly elective procedures.

Objective: To compare Medicare spending for previously uninsured and insured adults by using Medicare claims data.

Design: We used longitudinal survey data and linked Medicare claims data to compare Medicare spending for beneficiaries age 65 to 74 years who were previously insured or previously uninsured before age 65 years. We used an inverse-probability-of-treatment weighting technique to adjust for fixed and time-varying sociodemographic and health characteristics before age 65 years. We also compared condition-specific hospitalizations and estimated their contribution to differences in Medicare spending.

Setting: Nationally representative Health and Retirement Study, 1992–2006.

Participants: 2951 continuously insured adults and 1616 adults who were continuously or intermittently uninsured before age 65 years.

Measurements: Mean adjusted annual Medicare spending (total and by type of service) and annual rates of condition-specific hospitalizations.

Results: Adjusted annual total Medicare spending was significantly higher for previously uninsured ($5796) than previously insured ($4773) adults (difference, $1023 [95% CI, $29 to $2016]; P = 0.044). Among relevant clinical subgroups, previously uninsured adults had higher adjusted annual hospitalization rates than previously insured adults for complications related to cardiovascular disease or diabetes (9.1% vs. 6.4%; P = 0.002) and for joint replacements (2.5% vs. 1.3%; P = 0.006). Differences in these hospitalizations accounted for 65.7% of the $644 difference in annual Medicare inpatient spending between all previously uninsured and insured adults.

Limitation: Unobserved confounders could have explained spending differences.

Conclusion: Costs of expanded coverage before age 65 years may be partially offset by subsequent reductions in Medicare spending after age 65 years, particularly for uninsured adults with cardiovascular disease, diabetes, or severe arthritis.

Primary Funding Source: The Commonwealth Fund.

Article and Author Information

Acknowledgment: The authors thank Stuart B. Mushlin, MD, for helpful comments on an earlier draft of this manuscript.
Grant Support: By a grant from the Commonwealth Fund (20060485).
Potential Conflicts of Interest: Consultancies: E. Meara (Employment Policies Institute), J.Z. Ayanian (RTI International, VeriskHealth). Expert testimony: J.Z. Ayanian (U.S. House of Representatives Ways and Means Committee). Grants received: J.Z. Ayanian (National Institute on Aging).
Reproducible Research Statement: Study protocol: See Methods and the Appendix, available at www.annals.org. Statistical code: Available from Dr. McWilliams (mcwilliams{at}hcp.med.harvard.edu); SAS code for constructing inverse-probability-of-treatment weights also available in appendix of reference 32. Data set: Health and Retirement Study survey data available at http://hrsonline.isr.umich.edu/index.php?p=data. Linked Medicare claims data are restricted, and use requires approval by the Health and Retirement Study and the Centers for Medicare & Medicaid Services.
Requests for Single Reprints: J. Michael McWilliams, MD, PhD, Department of Health Care Policy, Harvard Medical School, 180 Longwood Avenue, Boston, MA 02115; e-mail, mcwilliams{at}hcp.med.harvard.edu.
Current Author Addresses: Drs. McWilliams, Meara, Zaslavsky, and Ayanian: Department of Health Care Policy, Harvard Medical School, 180 Longwood Avenue, Boston, MA 02115.
Author Contributions: Conception and design: J.M. McWilliams, E. Meara, A.M. Zaslavsky, J.Z. Ayanian.
Analysis and interpretation of the data: J.M. McWilliams, E. Meara, A.M. Zaslavsky, J.Z. Ayanian.
Drafting of the article: J.M. McWilliams, A.M. Zaslavsky.
Critical revision of the article for important intellectual content: J.M. McWilliams, E. Meara, A.M. Zaslavsky, J.Z. Ayanian.
Final approval of the article: J.M. McWilliams, E. Meara, A.M. Zaslavsky, J.Z. Ayanian.
Statistical expertise: J.M. McWilliams, E. Meara, A.M. Zaslavsky.
Obtaining of funding: J.M. McWilliams, J.Z. Ayanian.
Administrative, technical, or logistic support: J.M. McWilliams.
Collection and assembly of data: J.M. McWilliams.