Supplemental Insurance and Racial Health Disparities under Medicare Part B

To assess the impact of preferences, socioeconomic status (SES), and supplemental insurance (SI) on racial/ethnic disparities in the probability and use of services at physicians' offices, hospitals, and emergency departments among Medicare beneficiaries enrolled in Part B.

This study includes black and white beneficiaries from the 2009-2011 panel of the Medicare Current Beneficiary Survey who were enrolled in Medicare Part B. Logit and negative binomial multivariate regression analysis were used in conjunction with rank-and-replace methods to determine factors influencing utilization and black-white utilization disparities.

Among Part B beneficiaries, significant disparities exist for each studied service. Examining contributing factors, 12-19 percent of the black-white health-adjusted difference in the probability of use is explained by differences in SES, whereas differences in the distribution of SI accounts for 20 percent or more. For volume, SES is found to account for 2-11 percent of differences with SI making up another 9-10 percent.

A substantial portion of the difference in black-white beneficiary use of outpatient services is due to SI. Policies aimed at increasing coverage are likely to increase the probability of visits with modest increases in volume.