Medicare-Medicaid Dual Eligibles

The Dual Eligible Challenge

In 2021, over 12 million people were enrolled in both Medicare and Medicaid programs. Coordinating care for individuals in this group, known as “dual eligibles”, has posed an increasing challenge for policymakers in past decades. 

Medicare is a federal health insurance program for people 65 or older, and those under 65 with qualifying disabilities/conditions. The Centers for Medicare & Medicaid Services (CMS) runs the program federally, setting universal standards for costs and coverage in all states. Medicare enrollees can opt for the unmanaged “fee-for-service” original Medicare system, where patients can choose their preferred healthcare provider without restrictions. Alternatively, they can also receive benefits through Medicare Advantage (MA) plans, offered by private companies that contracted with the CMS. MA plans control access to services/providers and limit choice to a defined provider network.

On the other hand, Medicaid is a joint federal and state program that helps cover medical costs for low-income and/or disabled individuals. While CMS oversees the general regulations states must abide by, each state fundamentally carries out its own Medicaid program, hence resulting in widely varying Medicaid eligibility between states.

When the two programs first came along, they were meant to serve the needs of two different beneficiary populations, hence there are a number of differences in their eligibility requirements, benefits, regulations, and organizational structures. The most glaring conflict is rules governing management care plans. While Medicare allows an option between either traditional Medicare or Medicare Advantage, states determine whether to use managed care for service delivery and whether it’s mandatory or voluntary for dual eligibles. Additionally, the two programs cover a number of overlapping benefits, with certain additional services provided solely by Medicaid. 

Previously, states sought to avoid complex coordination conflicts with Medicare by keeping dual eligible enrollees on fee-for-service Medicaid programs. However, with the maturation of Medicaid managed care, many states have slowly adopted these plans for delivering adequate, coordinated care. By 2019, 30 state Medicaid programs, as well as DC and Puerto Rico, have included dual eligible individuals on comprehensive Medicaid managed care.

Dual Eligible Special Needs Plans

There have been many attempts by policymakers and CMS to create a care delivery model that integrates Medicare and Medicaid benefits for dual eligible enrollees. The most prominent model currently is the Dual-Eligible Special Needs Plans (D-SNPs), which are specialized Medicare Advantage plans for dual eligibles. In 2022, 729 D-SNPs operated in 45 states, DC, and Puerto Rico, accounting for over 4 million dual eligibles. 

While D-SNPs fall under CMS regulations, they must sign contracts with the respective state where they operate. The contract would outline how much Medicaid benefits the D-SNPs will cover on top of their mandated Medicare benefits and degree of their coordination of the two programs’ benefits. While states can’t mandate dual eligible enrollees to be on a specific plan, states can require their managed care plans to offer at least one D-SNPs, orienting dual eligible individuals to receive more coordinated care across both programs.

With CMS’s 2023 Medicare Advantage-Part D Final Rule, released in May 2022, D-SNPs have become the preferred delivery model for the integration of Medicaid/Medicare benefits. The Final Rule aims at increasing enrollee involvement in D-SNPs, individualized consideration of enrollee social needs, further integration of systems, and giving states additional flexibilities in D-SNP structures.

What’s Next?

While D-SNP is currently the predominant delivery model of care for dual eligibles, other models may emerge. One possibility is the creation of a fully combined program, hence greatly simplifying the entire care delivery process for enrollees, families, and providers. For now, the evolution of D-SNPs will provide valuable insights into how we can improve care coordination for dual eligibles.

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