I estimate the welfare, both gross and net, provided by the Medicare managed care program in 1999 through 2002. First, I estimate a model of demand for the benefits offered by managed care plans to Medicare beneficiaries. I then use the demand estimates to form estimates of welfare provided by...

I estimate the welfare provided by and net costs of the Medicare HMO program in 1999-2002. I measure welfare with a nested logit model of demand for Medicare HMO plans using detailed data on plan benefits. From this, I derive estimates of consumer surplus and find that total welfare provided by...