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Those Eligible for Medicare and Medicaid Face Twin Challenge

Navigating either of the health care insurance programs can be hard enough; states are seeking ways to help the “duals” who qualify for both.

By Kathryn Costanza  |  January 29, 2024

More than 12.2 million low-income Americans receive coverage under both Medicaid and Medicare due to age or disability.

These “dually eligible beneficiaries,” or “duals,” account for a disproportionate share of spending in both of the health care insurance programs, often because of multiple chronic conditions, disabilities and complex needs, including social support needs.

Recent research on the health-related social needs of dually eligible people, such as food insecurity, housing instability or transportation issues, shows how these needs may be linked to health outcomes. Financial limitations and food insecurity, unreliable transportation, loneliness or social isolation, and housing insecurity were associated with higher rates of hospitalizations and emergency department visits. For example, unreliable transportation was associated with 85% more hospitalizations and 68% more emergency department visits among duals.

Medicare and Medicaid are separate programs that maintain independent rules on eligibility and benefits. Because the programs are not designed to work together, duals may experience fragmented or uncoordinated care. For example, dually eligible beneficiaries report difficulty in getting and maintaining eligibility for both programs, confusion about coverage options and available benefits, and the need for help in navigating the programs, among other challenges.

What States Are Doing

Integrating and coordinating care may improve patient experience, improve health outcomes and address downstream costs for dually eligible beneficiaries.

Nearly all states have taken action to integrate and coordinate care for those eligible across the Medicare and Medicaid programs. States have several policy options to integrate care and increase enrollment for duals, including dual eligible special needs plans, managed long-term services and supports programs, contracting practices, additional integration requirements, and enrollment policies.

Integrated and coordinated care may improve outcomes for dually eligible beneficiaries, but these individuals may be increasingly enrolling in nonintegrated “look-alike” plans.

States predominately integrate care through dual eligible special needs plans (D-SNPs), which coordinate Medicare and Medicaid benefits and administration to varying degrees. Fully integrated dual eligible special needs plans (FIDE-SNPs) allow benefits to be coordinated under a single managed care organization. Additionally, states may integrate care for duals in managed long-term services and supports (MLTSS) programs by requiring managed care organizations to offer D-SNPs.

States are also leveraging D-SNPs and MLTSS for duals following the end of the Financial Alignment Initiative (FAI), which is a recent state integration model from the Centers for Medicare & Medicaid Services (CMS) Innovation Center. States are required to phase out or transition FAI programs by Dec. 31, 2025. Elements of FAI that have been permanently incorporated into D-SNP requirements include integrated home health, medical supplies, behavioral health services in FIDE-SNPs, and additional opportunities for integration through state Medicaid agency contracts. These changes provide states that have not participated in FAI with greater flexibility to integrate and coordinate care through existing D-SNPs.

Of the 13 states that participated in FAI, 10 are transitioning or have transitioned to an MLTSS model, and two states have already transitioned to managed fee-for-service model. Massachusetts is transitioning to an MLTSS model in which the coordinated health plan option for adults 65 and older includes all Medicaid and Medicare services plus additional behavioral health and home care services contracted through FIDE-SNPs and companion Medicaid managed care plans. Texas plans to transition to MLTSS with integrated D-SNPs and will require that contracted managed care organizations have a companion D-SNP.

Minnesota will continue to use a state-specific alternative model approved by the CMS Innovation Center. The Minnesota Senior Health Options program, a long-standing integrated Medicare-Medicaid plan, has demonstrated better outcomes for duals than the state’s MLTSS program, including less hospital and emergency department use and greater use of home- and community-based services.

Minnesota is working with the CMS Innovation Center to test a statewide program, the Demonstration to Align Administrative Functions, to strengthen managed care plan integration into MSHO. The model integrates all Medicare and Medicaid benefits into MSHO plans, including long-term services and supports and behavioral health services; requires plans that serve duals to be fully integrated D-SNPs; and limits competition from nonintegrated plans by contracting only with plans that participate in the state Medicaid program.

Look-Alikes Cause Confusion

Despite the potential benefits of integrating care for dually eligible beneficiaries, about 70% of duals receive care through nonintegrated plans.

Recent research indicates that some duals are increasingly enrolling in nonintegrated “look-alike” plans with disproportionate impacts on vulnerable communities across the country. The benefits and cost-sharing of the look-alike plans are similar to those of integrated dual eligible special needs plans, but the look-alikes may not meet federal and state standards for integrating care.

Between 2013 and 2020, duals’ enrollment in look-alike plans increased nearly elevenfold, from about 20,900 duals across four states to 220,860 duals across 17 states. According to researchers, 30% of dually eligible beneficiaries who enrolled in these nonintegrated look-alike plans were previously enrolled in integrated plans and more likely to be older, Hispanic and from socially vulnerable communities.

The trend toward nonintegration may pose challenges to states that are trying to leverage integrated care to improve health outcomes for dually eligible beneficiaries. While state policies to affect integration may occur through state agencies, state legislators play an important role in funding and overseeing care for duals served through the state Medicaid program. Legislators may also direct state agencies to further integrate and improve care for dual eligibles.

Kathryn Costanza is a program principal in NCSL’s Health Program.

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