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Dual Eligibles Linda Elam, Ph.D., M.P.H. Principal Policy Analyst Kaiser Commission on Medicaid and the Uninsured Tutorial March, 2006 Who Are Dual Eligibles? Figure 1 Background Qualify for both Medicare and Medicaid programs; ~7.5 million total

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Dual Eligibles

Linda Elam, Ph.D., M.P.H.

Principal Policy Analyst

Kaiser Commission on Medicaid and the Uninsured Tutorial

March, 2006


Figure 1

  • Qualify for both Medicare and Medicaid programs; ~7.5 million total
  • Medicare - federal health insurance program for seniors and some younger individuals with permanent disabilities
  • Medicaid – federal-state health insurance program for low-income populations
characteristics of dual eligible medicare beneficiaries 2002

Figure 2

Characteristics of Dual Eligible Medicare Beneficiaries, 2002

SOURCE: Centers for Medicare and Medicaid Services, Medicare Current Beneficiary Survey (MCBS) 2002 Access to Care File.


Figure 3

Medicaid Provides Different Levels of Assistance to Low-income Medicare Beneficiaries

  • Different eligibility pathways and benefit levels
  • Most receive full Medicaid benefits in addition to assistance with Medicare costs
  • Subject to income and asset limits

Assistance with Medicare Premiums

1.3 million

Full Medicaid Benefits

6.2 million

7.5 Million Total


Figure 4

Eligibility Pathways & Benefits for Mandatory Populations


Figure 5

Eligibility Pathways & Benefits for Optional Populations


Figure 6

Medicaid Pays for 65% of Elderly Nursing Home Residents at Some Point in Their Stay

  • Medicaid benefits are subject to stringent asset and income limits
  • Congress recently tightened asset rules

Primary payer at admission

No Medicaid


Medicaid Payment Status Among Elderly Long Term Care Residents (90+ days)

SOURCE: KCMU analysis of 1999 National Nursing Home Survey.


Figure 7

Financing Care for Dual Eligibles, 2000

Total = $131 Billion

SOURCE: KCMU estimates based on analysis of MCBS Cost and Use, 2000

medicare coverage

Figure 8

Medicare Coverage
  • Covers most physician and hospital care, including doctor visits, inpatient stays, and ancillary services
  • Covers home health and post-acute care
  • Has significant premium and cost-sharing obligations
medicare expenditures for dual eligibles 2002

Figure 9

Medicare Expenditures for Dual Eligibles, 2002

Type of Service:

Hospice and other services

Skilled Nursing Facility and Home Health

Medical Providers, Supplies and Outpatient Hospital

Dual Eligibles 29%

Other Medicare Beneficiaries 71%

Inpatient Hospital

Total Medicare Spending = $224.5 Billion

Total Medicare Spending on Duals = $64.3 Billion

Note: Other services includes Rx drugs, dental, long-term care facility stays.SOURCE: KFF analysis of the MCBS 2002 Cost and Use File.

medicaid fills the significant gaps in medicare s coverage for dual eligibles

Figure 10

Medicaid Fills the Significant Gaps in Medicare’s Coverage for Dual Eligibles
  • Medicaid pays the Medicare Part B premium ($88.50/month) and cost sharing charged for many Medicare services
  • Medicaid covers benefits not covered by Medicare
    • Long term care, including nursing homes
    • Dental
    • Vision
medicaid expenditures for dual eligibles 2003

Figure 11

Medicaid Expenditures for Dual Eligibles, 2003

Medicare Premiums


Prescribed Drugs


Acute Care


Duals 40%

Other Beneficiaries 60%

Long-Term Care


Total Medicaid Spending = $262.2 billion

Total Medicaid Spending on Duals = $105.4 billion

SOURCE: Urban Institute estimates for KCMU based on analysis of MSIS and Financial Management reports (CMS Form 64).

dual eligibles as a percent of medicare and medicaid enrollment and spending 2002

Figure 12

Dual Eligibles as a Percent of Medicare and Medicaid Enrollment and Spending, 2002

Dual Eligibles as Percent of Medicare:

Dual Eligibles as Percent of Medicaid:

Total Enrollment = 41.8 Million

Total Spending= $224.5 Billion

Total Enrollment= 51 Million

Total Spending = $232.8 Billion

SOURCE: Medicare data are from KFF analysis of Medicare Current Beneficiary Survey 2002 Cost and Use File. Medicaid data are from KCMU estimates based on CMS data and Urban Institute estimates based on an analysis of 2000 MSIS data applied to CMS-64 FY2002 data.

dual eligibles drug coverage changed significantly and abruptly with medicare part d

Figure 13

Dual Eligibles’ Drug Coverage Changed Significantly and Abruptly with Medicare Part D
  • Dual eligibles are highly reliant upon prescription drugs
    • “Full duals” received drug coverage through Medicaid
  • On January 1, 2006, dual eligibles’ drug coverage was switched from Medicaid to privately-run Medicare Part D drug plans
  • Full dual eligibles were randomly assigned to plans, and subsequently enrolled in those plans if they did not make a different selection
    • Full duals may switch plans at any time
    • Amount of low-income subsidy may limit options
  • Full dual eligibles are subsidized for premiums but may face new cost sharing, such as copayments
the transition to part d has been rocky for many

Figure 14

The Transition to Part DHas Been Rocky for Many
  • Even with auto-enrollment process, some duals were missed
  • Plans did not always follow transitional protocols required by CMS
  • Some duals were overcharged for drugs
  • Over half of states responded by providing emergency assistance
  • People with cognitive impairments have been particularly vulnerable
challenges after enrollment

Figure 15

Challenges After Enrollment
  • Once enrolled, dual eligibles need time to understand their new coverage
    • Learning how Medicare drug plans work in ways that may be different from Medicaid
    • Adjusting to new formularies and co-payments
    • Securing exceptions if they need non-formulary drugs
  • Care for dual eligibles may become more fragmented as Medicaid, Medicare, and Part D plans must coordinate
  • Monitoring the effects of Part D on dual eligibles is critically important

Figure 16

  • Dual eligibles’ high rates of chronic illness, including mental disorders, makes management of their cases complicated and expensive.
  • In addition to their poor health status, dual eligible beneficiaries have very low incomes.
  • Dual eligibles require extensive health care services and many are reliant on prescription drugs.
    • Medicare Part D transition has been difficult and requires ongoing monitoring.
  • The tension between the federal and state governments over fiscal responsibility for dual eligibles is likely to grow as the population ages and costs increase.