Overview of Dual Eligibiles

There are approximately 10.2 million people who are eligible for both Medicaid and Medicare and individuals with disabilities under the age of 65 comprise about 41% (4.1 million) of that number. About 7% of duals are individuals with intellectual and developmental disabilities (I/DD). People who are dually eligible for Medicare and Medicaid frequently are referred to as “dual eligibles” or “duals.” Duals represent 21% of Medicare beneficiaries and account for 36% of Medicare costs. Similarly, dual eligibles constitute 15% of Medicaid enrollees, but account for 39% of the program’s costs. Over 60% of dual eligible beneficiaries have incomes below the poverty level. They also require a complex array of services from a variety of providers across different settings. In short, duals are people with high needs who are very poor.

A great deal of attention has been focused on duals recently because of their complex needs, the lack of coordination between Medicaid and Medicare, and high costs associated with their health care and long term services and supports needs. Duals must negotiate two complex systems that have different rules, regulations, benefits, and providers who do not coordinate with one another. People who are duals rely on Medicare to cover most of their acute care and drug costs and on Medicaid for their long term services and supports needs and to cover their Medicare premiums and cost sharing. The federal government is responsible for Medicare and the states run Medicaid. As a result, duals encounter many barriers to receiving the services and supports they need to address their physical and behavioral health care needs and to receive the long term services and supports they need to be as independent as possible.

Integrated Care for Duals under the Affordable Care Act

Previous attempts have been made to integrate care for people eligible for both Medicare and Medicaid. (See the CMS Integrated Care Roadmap.) The Program of All-Inclusive Care for the Elderly (PACE) was authorized by the Balanced Budget Act of 1997 and is restricted to Duals age 55 and over who are eligible for care in a nursing facility. Recent efforts prompted by the Medicare Modernization Act of 2003 resulted in Special Needs Programs (SNPs), a type of Medicare Advantage or managed care plan. However, more the 80% of Duals remain in Medicare fee for service systems and only about 120,000 Duals are enrolled in plans that fully integrate Medicare and Medicaid services. Furthermore, lack of comparable outcomes research does not allow analysis of the effectiveness of SNPs.

Health Care Reform Initiatives

Reforms included in the Affordable Care Act attempted to control the steep increases in health care costs. The Act addressed costs in Medicare and Medicaid associated with care for Duals by creating new agencies within the Centers for Medicare and Medicaid Services (CMS) charged with improving care and reducing costs.

Under the ACA, Congress created the Center for Medicare and Medicaid Innovation (Innovation Center) within the Centers for Medicare and Medicaid Services (CMS). The Innovation Center’s goal is to identify and replicate models of care and payment to provide better care at reduced costs to Medicare, Medicaid and CHIP (the Children’s Health Insurance Program) beneficiaries.

The ACA also created the Medicare-Medicaid Coordination Office (MMCO) within CMS with a renewed emphasis on coordinating and integrating care for duals to ensure that they receive seamless, high quality health care and to make the system as cost-effective as possible.

In an effort to ensure seamless care for Duals, MMCO offered states the opportunity of test models to align the financing of Medicare and Medicaid and integrate primary, acute, behavioral health and long term services and supports for Duals. States will serve as laboratories and any models that are successful, especially those that result in cost savings, could result in nation-wide policy. Several states submitted proposals to MMCO for financial alignment projects.

  • Eight states have negotiated memorandum of understanding with CMS to test capitated models in which the state, CMS, and health plans enter into three-way contracts and the plans receive a prospective blended payment to provide comprehensive, coordinated care.
  • Two states have signed MOUs with CMS for managed fee-for-service models in which the state and CMS enter into an agreement that permits the state to share in Medicare savings for care coordination initiatives.

CMS awarded a grant to Mathematica to develop a technical assistance resource center, the Integrated Care Resource Center, to help all states coordinate care for high-cost, high-need beneficiaries. CMS awarded a grant to RTI, International to design evaluations for the demonstrations.

MMCO and the Innovations Center are developing a new demonstration to improve care quality for nursing facility residents by providing needed care and reducing hospitalizations. Nearly two-thirds of nursing facility residents receive Medicaid and most receive Medicare also. A goal of this initiative is to reduce hospital readmission rates by 20% by the end of 2013.

MMCO has provided a mechanism for states to access Medicare data for duals to support coordination of services, improvement in care, and reduce costs. Access to the data is designed to enable states to identify high-risk and high-cost individuals, determine their primary health risks, and develop comprehensive individual client profiles.