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Type of Medicare HMO

Codes and Frequencies

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For people with Medicare coverage (other than simply Part A, hospital only, coverage) who reported being covered by a Medicare HMO, MCAREHMOTYP reports the type of Medicare Health Maintenance Organization (HMO) coverage.

MCAREHMOTYP is a recoded variable created by the National Center for Health Statistics (NCHS) and is included in the original NHIS public use data. MCAREHMOTYP, like other recoded health insurance variables in NHIS data, is based on responses to a series of questions and back editing carried out by the NCHS.


As indicated above, only people with Medicare coverage who reported being covered by a Medicare HMO are included in the universe of MCAREHMOTYP. The NCHS provided a formal definition of a Health Maintenance Organization (HMO).


This defination was as follows:

An HMO is a health care system that assumes or shares both the financial risks and the delivery risks associated with providing comprehensive medical services to a voluntarily enrolled population in a particular geographic area, usually in return for a fixed, prepaid fee. Pure HMO enrollees use only the prepaid capitated health services of the HMO panel of medical care providers. Open-ended HMO enrollees use the prepaid HMO health services but, in addition, may receive medical care from providers who are not part of the HMO panel. There is usually a substantial deductible, co-payment, or coinsurance associated with use of non-panel providers.

The NCHS also notes that in the NHIS, the more specific expression, Medicare HMO, refers to "a subset of Medicare Part C." Non-HMO Medicare coverage conversely refers to Medicare fee-for-service coverage (i.e., Medicare Part A and/or Part B).

The specific types of Medicare HMO plans categorized by MCAREHMOTYP are Group HMO, Staff HMO, IPA, and Medi-Gap. NCHS provided definitions of these terms.


These plans are defined by the NCHS as follows:

  • Group HMO: "An HMO that contracts with a single multi-specialty medical group to provide care to the HMO's membership. The group practice may work exclusively with the HMO, or it may provide services to non-HMO patients as well. The HMO pays the medical group a negotiated per capita rate, which the group distributes among its physicians, usually on a salaried basis."
  • Staff HMO: "A type of closed-panel HMO (where patients can receive services only through a limited number of providers) in which physicians are employees of the HMO. The providers see members in the HMO's own facilities."
  • Individual Practice Association (IPA): "A type of healthcare provider organization composed of a group of independent practicing physicians who maintain their own offices and band together for the purpose of contracting their services to HMOs, PPOs (preferred provider organizations), and insurance companies. An IPA may contract with and provide services to both HMO and non-HMO plan participants."
  • Med-Gap: "Private health insurance purchased to supplement Medicare."

In addition to these specific types of Medicare HMOs, MCAREHMOTYP also includes "Other" as a category. According to the NHIS public use file Codebooks for 2001 forward, this "Other" category in MCAREHMOTYP includes Private Fee-for-Service (PFFS) and Preferred Provider Organization (PPO) plans, as well as some Medicare Demonstrations.


The NCHS defines a PPO plan as:

Preferred Provider Organization (PPO): A "type of medical plan where coverage is provided to participants through a network of selected health care providers (such as hospitals and physicians). The enrollees may go outside the network, but they would pay a greater percentage of the cost of coverage than within the network."

Although the NCHS does not specifically define PFFS plans or Medicare Demonstrations, the Centers for Medicare and Medicaid Services (CMS) provides the following definitions:

  • Private Fee-for-Service (PFFS): "A Private Fee-for-Service (PFFS) plan is a Medicare Advantage (MA) health plan, offered by a state licensed risk bearing entity, which has a yearly contract with the Centers for Medicare and Medicaid Services to provide beneficiaries with all their Medicare benefits plus any additional benefits the company decides to provide. One major difference between a PFFS Medicare Advantage Organization (MAO) and other MAOs is that, in most cases, people who join a PFFS MAO are not required to use a network of providers. Beneficiaries can see any provider who is eligible to receive payment from Medicare and agrees to accept payment from the PFFS MAO."
  • Medicare Demonstration: "The Centers for Medicare and Medicaid Services (CMS) conducts and sponsors a number of innovative demonstration projects to test and measure the effect of potential program changes. Our demonstrations study the likely impact of new methods of service delivery, coverage of new types of service, and new payment approaches on beneficiaries, providers, health plans, states, and the Medicare Trust Funds."

Follow-up questions collected information about the names of coverage plans and confirmed the lack of any type of coverage for the uninsured.


In follow-up questions, interviewers recorded the names of up to four private health insurance plans. If the person was reported as covered by CHIP (beginning in 2000), by a state-sponsored health plan, or by another public program (other than Medicaid) that paid for health care, the interviewer recorded the name of that plan. The placement and wording of these questions about the names of specific government health care plans varied across years.

Persons who indicated that they were covered by Medicare (HIMCAREE) were asked their type of Medicare coverage (MCARETYP). Persons who gave any answer to this question other than just "Part A - Hospital Only," were asked whether they were "under a Medicare managed care arrangement, such as an HMO, that is, a Health Maintenance Organization?" Persons who responded affirmatively to this question were asked the question associated with MCAREHMOTYP, namely, "What is the name of the HMO?" The verbatim names given in response to this question were edited by the NCHS, and coded ("external coding") into the categories that make up MCAREHMOTYP.

Data Editing and Recoding

During the course of data editing, the NCHS discovered many errors in the responses to questions about insurance coverage. Often, respondents misclassified the type of insurance they had. This might be shown, for example, by a mismatch between the verbatim name of an insurance plan and the type of insurance coverage the person selected from the categories on a card provided by the interviewer.

Accordingly, the NCHS created a series of recoded insurance variables. For these recoded insurance variables, the data are back-edited, taking into account such factors as the proper classification of the verbatim names of insurance plans and responses to questions about why insurance coverage had stopped.

Because of the errors in the respondents' original (unedited) answers to questions about insurance coverage, the NCHS strongly advises analysts to use these recoded insurance variables as a more reliable source of information about the types of insurance coverage than is provided by respondents' original and unedited answers.

Only persons having an affirmative response to the recoded Medicare coverage variable, HIMCAREE, were included in the universe of MCAREMHOTYP.


The basic meaning and universe for MCAREHMOTYP are consistent over time. However, comparability may be limited by three factors:

  • Changes in the questions used to gather the information used for back-editing the data;
  • Changes in the back-editing procedures used by the NCHS;
  • Changes in the NCHS's coding of the verbatim names given in response to the question associated with MCAREHMOTYP ("What is the name of the HMO?") into the categories that make up MCAREHMOTYP.


  • 2001-2009: Persons with Medicare (other than only Part A - Hospital only) who reported being covered by a Medicare HMO.


  • 2001-2009