Refocusing Responsibility for Dual Eligibles

This report released by the Robert Wood Johnson Foundation examines cost and quality issues associated with the 9 million individuals who receive health care benefits from both Medicare and Medicaid (dual eligibles). The authors from the Urban Institute explain why and how Medicare should take responsibility for them. Forty percent of both Medicare's and Medicaid's costs are associated with dual eligibles, thus they are a key focus of efforts to slow growth in entitlement spending. Since dollars spent on dual eligibles are overwhelmingly federal, and potential savings come largely from better management of Medicare-financed acute care services, savings and quality improvement for duals' services are Medicare's to pursue—but policy-makers are relying far too heavily on states to find the solution.

The report identifies Medicare's opportunities for improving care for dual eligibles, with measures that include:

  • aggressive oversight and "pay for performance" in Medicare Special Needs Plans that serve specialized populations, including one million dual eligibles;
  • greater emphasis on dual eligibles—especially those who need long-term care—in payment and delivery reforms initiated by the Affordable Care Act; and
  • payment adjustments for Skilled Nursing Facilities to prevent unnecessary hospitalizations for nursing home residents, which shift costs from Medicaid to Medicare.

The authors conclude that improving the quality and efficiency of care for duals is Medicare's job, and that enhanced state responsibility for managing spending increases the risk of cost-shifting to Medicare and may undermine quality of care for vulnerable beneficiaries.