Financial Burden of Dual-Eligible Beneficiaries Split Evenly on Medicare, Medicaid

Research into utilization and spending for need-based subgroups suggests integration of the two programs could better serve enrollees.

There is a need for integration strategies combining both Medicare and Medicaid benefits due to significant use of both payers among need-based subgroups of dual-eligible beneficiaries, according to a study published in JAMA Health Forum.

Due to their complex care needs, dual-eligible beneficiaries account for a disproportionate share of spending and the lack of coordination between Medicare and Medicaid results in higher costs and worse care, researchers stated.

To quantify how the use of services and spending by payer differ across need-based subgroups, the study looked at Medicare and North Carolina Medicaid claims data from 2014 to 2017. Included in that were 333,240 North Carolina Medicaid beneficiaries with full Medicaid benefits ever enrolled in Medicare during the study period.

Researchers observed fewer acute care events in Medicaid than Medicare, like emergency department visits, hospital admission, and inpatient days. The difference in acute care events was highest among the nursing home resident subgroup.

Medicare had more home health visits and hospice days, while Medicaid had more behavioral health service visits.

In terms of spending, combined total expenditure for Medicare and Medicaid was $26,874 per person-year. The proportion of total spending paid by Medicaid varied by need-based subgroup, with Medicaid contributing up to 70% of total spending for high-need populations, including nursing home residents.

However, researchers found that overall spending was evenly distributed between the programs, with Medicare at $14,175 and Medicaid at $12,698.

The findings indicate that integration of the two programs is necessary to better serve dual-eligible beneficiaries. Integrated programs currently exist, like the Program for All-Inclusive Care for the Elderly (PACE), Medicare-Medicaid-managed care plans including the Financial Alignment Initiative (FAI), and Dual Special Needs Plans (D-SNPs). Yet only 10% of dual-eligibles nationally are enrolled in programs that integrate Medicare and Medicaid care models, payments, and administrative processes, the study highlighted.

Researchers stated that expansion of PACE could help with integration efforts by allowing more individuals to enroll and receive integrated care, as well as increase opportunities for collaboration between non-PACE and PACE organizations.

"The diversity of health care use suggests that a tailored approach to integration strategies with comprehensive set benefits that comprises Medicare and Medicaid services, including LTSS [long-term services and supports], BH [behavioral health], palliative care, and social services is needed," researchers concluded.

"These findings may inform the design of integrated programs that could improve access to whole-person, beneficiary-centered care for dual-eligible beneficiaries and their families."