Project Leader: David Grabowski

Medicare beneficiaries also eligible for Medicaid - the "duals" - are a heterogeneous, vulnerable, high-cost, high-priority group. Duals are on average sicker than Medicare beneficiaries not eligible for Medicaid, and often have multiple chronic conditions.  Conflicting regulations and incentives between Medicare and Medicaid fragment care, reduce quality, and increase total spending.  The dually eligible with their complex needs are especially likely to benefit from coordinated care, yet this group is less likely than other Medicare beneficiaries to enroll in coordinated care plans. The juxtaposition of high need and cost, an inefficient Medicare/Medicaid partnership, and overreliance on fragmented care models creates an opportunity for policy to both improve care and economize on public funds.

This project focuses on new payment mechanisms that integrate benefits and services across dual-eligible beneficiaries. The Financial Alignment Initiative was a 13-state demonstration to integrate Medicare and Medicaid services. Our paper found low enrollment and high opt-out in spite of the use of passive enrollment. Medicare Advantage (MA) Special Needs Plans (SNPs) were authorized under the Medicare Modernization Act (MMA) of 2003 with the idea of attracting a different type of beneficiary into MA. Enrollment has grown steadily in SNPs and today roughly 2.5 million individuals are in these programs. Our recently published paper found that the “double bonus” payment incentive led to an increase in the number of plans but no impact on enrollment or quality. In ongoing work, we exploit D-SNP market penetration to examine the impact of these plans on dual-eligibles’ access to health care, care experiences, and health outcomes.

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