This project will use data from the Medicare Current Beneficiary Survey (MCBS) to study how the structure of the Medicare managed care market affects economic and clinical outcomes among chronically ill elderly persons. Specifically, the project will use the MCBS to: (1) determine how Medicare market structure affects insurance choice, health status and out-of-pocket expenses for the chronically ill in Medicare; (2) determine how thee effects vary by type of chronic condition or disease progression; and (3) forecast how changes in Medicare market structure might affect the chronically ill in Medicare. Several of the project analyses will be highly innovative. For instance, the project will assess the impact of market structure on transitions among fee-for-free service (FFS) Medicare without supplemental insurance, FFS Medicare with private supplemental insurance, and HMO coverage. The project also will assess how incident chronic conditions or worsening conditions (i.e., health shocks) affect beneficiaries choices between FFS and HMOs.