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Medicare Subvention Demonstration: DOD Data Limitations May Require Adjustments and Raise Broader Concerns

Descriptive Note:

[Technical Report, Congressional Report]

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The Balanced Budget Act of 1997 BBA authorized a 3-year test, called Medicare subvention, allowing Medicare-eligible military retirees, their dependents, and survivors to enroll in a new Department of Defense DOD health maintenance organization HMO. The demonstrations stated goal is to implement an alternative for delivering accessible and quality care to Medicare-eligible military beneficiaries, while not increasing the cost to either DOD or Medicare. Currently, care for these beneficiaries at military treatment facilities MTF is provided on a space-available basis that lacks the continuity often important to older retirees. Under this demonstration, the Medicare Trust Funds will pay DOD for health care provided to eligible retirees at six sites. DOD will provide enrollees the full range of Medicare-covered services as well as some additional services. In principle, beneficiaries, DOD, and Medicare could all gain under subvention. Beneficiaries who choose DODs plan can use their Medicare benefit to receive care at an MTF. Under subvention, Medicares payment for enrollees could be less than what it pays private plans serving other Medicare beneficiaries, and DOD could gain additional funds and use excess capacity where it exists.

Subject Categories:

  • Personnel Management and Labor Relations
  • Medicine and Medical Research

Distribution Statement:

[A, Approved For Public Release]