Recently I was at a briefing session of our long-time grantee, The National Health Policy Forum, to learn about current thinking around the care (and cost) of the “duals.” The duals—wonk shorthand for those people who are eligible for both Medicare and Medicaid—number around 9 million and are some of the most vulnerable in our society: those who are aged or disabled and also poor. Among others, we heard from Melanie Bella, Director of the Medicare-Medicaid Coordination Office since September 2010.
This new position was created under the Affordable Care Act to improve the efficiency of the duals’ care. Ms. Bella shared some of the new data that her office has developed on duals. While duals have overall moderately more chronic conditions than beneficiaries with Medicare alone, they have distinctly higher rates of Alzheimer’s dementia (20% vs 9%) and depression (25% vs 10%).
There are basically three ways to become dually eligible:
1. Be permanently disabled and unable to work. If you are so disabled as to be unable to work, after two years of qualifying for Supplemental Security Income (SSI) from social security, you will qualify for Medicare. Since the income and asset requirements for SSI are so stringent, people will usually meet the income requirements of state Medicaid. Many people with profound mental illnesses or disability wind up in this group (49 percent of the under-65 duals have a mental/cognitive impairment). Nearly 2 in 5–38 percent–of dually eligible people are under 65 and have entered through this pathway.
2. Be very poor and reach 65. If you are already poor and meet your state Medicaid eligibility, turning 65 will make you also eligible for Medicare.
3. Need long-term care. Since long-term care is so very expensive, if you become unable to care for yourself after turning 65, you will eventually become eligible for Medicaid, too. Medicare’s “long-term care” benefits (e.g., nursing homes) are only for short-term rehabilitation and run out after a few months. After one’s personal resources are “spent down” on long-term care (this doesn’t take long at an average of $74,000 per year for a nursing home bed), you will be “on Medicaid.” This is why Alzheimer’s disease is over-represented among duals. It is a major cause of institutionalization and spending down to poverty. About 3 in 5–62 percent–of duals are 65 and up.
One of the long-standing concerns about providing good and cost-effective care for duals has been that they were getting particularly bad and overpriced care as the two programs essentially played “hot potato,” passing these vulnerable people back and forth for temporary advantage. For example, Medicaid pays for the costs of most long stays in nursing homes. However, Medicare pays if the person is admitted to a hospital and then discharged to a nursing home (and pays at a higher rate than Medicaid). This includes current nursing home residents. This likely contributes to admissions to hospitals from nursing homes that are higher than they need to be. This is exacerbated by Medicare payment policies that make it very hard for institutionalized or homebound beneficiaries to get the assertive primary care that they need to stay well. Coordinating the two programs so that they work together to limit total spending and maximize the benefit to each person has been the holy grail of aging and health for a long time, only glimpsed occasionally in programs like PACE (the Program of All-Inclusive Care for the Elderly).
Ms. Bella also talked about some of her office’s initiatives. Interestingly, over the last year or so, the office of the duals has offered planning grants to states to think about how they would integrate Medicare and Medicaid and solicited demonstration proposals from states for either capitated or shared savings approaches to program coordination. Fifteen states have planning grants that come due in April, and 38 states have submitted letters of intent around the demonstration approach.
I and experts like Judy Feder at the Urban Institute are concerned that pushing cost savings efforts off onto the states is likely to fail. States’ Medicaid focus has been on the under-65 duals, those younger physically or mentally disabled who often have vigorous family advocacy or who have built a political movement for themselves. The quiet older adults who live primarily in nursing homes or at home with support haven’t gotten much attention from the states. And yet these quiet duals are by far the most expensive overall. While 72 percent of duals get no long-term services or supports, the 28 percent that do represent 10 to 20 times the per capita spending of those without long-term care: Medicaid will spend $48,000 annually on average on a dual in a nursing home but only $2,400 on a dual without long-term care of any kind. Plus, Medicare expenditures are doubled if a beneficiary is a user of long-term care.
Yet despite the concern at the state level about duals and the costs of long-term care, it is actually MEDICARE and the federal government that have far more skin in the game than the states. Medicare spent an estimated $175.7 billion (yes, “b”) on duals in 2011, whereas the Medicaid total was $143.6 billion (of which $80.9 billion is from federal contributions, not state).*
The way I read the evidence, states whose primary focus has been young women and children in their regular Medicaid programs and more recently on their younger duals are being asked to figure out how to deliver high quality and lower cost care to the frail older people who primarily generate costs to Medicare. I don’t think that states have either the experience in designing programs and benefits for older adults nor, in truth, a real interest in doing so. After all, every dollar Medicare spends in a state goes towards a job for a health care worker and income for a health care company, and it also generates tax revenue at no cost to the state.
I hope that the plans go well and the demonstrations are well designed and well executed. I am somewhat assured knowing that Ms. Bella is in charge and even more that Eileen Sullivan-Marx, the director of our Center for Geriatric Nursing Excellence at the University of Pennsylvania and of its Elder LIFE PACE program, is serving as an Aging and Health Policy Fellow with a placement in the office of the “duals.” Nonetheless, if the task boils down to providing better health care services to duals in institutions or at home so as to prevent expensive hospitalizations or increases in support needs, this is a complex geriatric care problem that has no easy answers.
*It’s important to know that Medicare is the entirely federally funded and federally run health care insurance program for the elderly (65 and up) and disabled. Medicaid is state run (with wide variations in eligibility and benefits within federally set limits) and is jointly funded by state and federal monies.