By Phil Galewitz, Kaiser Health News
Charles Barnum, 70, has heart problems, kidney issues and diabetes. But his health coverage through a managed-care plan seems about as solid as you can find: He’s covered by not only Medicare, but Medicaid as well.
“They keep a close eye on him,” said his daughter, Mary. Every few weeks, a nurse comes to her father’s Odessa, Mo., house to check on him, and his weight is monitored daily and sent via an electronic uplink.
Barnum is one of 9.2 million “dual eligibles,” and his experience in a managed-care plan illustrates the potential benefits of a proposal under scrutiny by the congressional “supercommittee” as it looks to cut at least $1.2 trillion from the federal deficit over the next decade. State Medicaid directors and health insurers’ trade groups are urging the supercommittee to give states the option to mandate that most or all dual eligibles be enrolled in private plans that can closely manage their care.
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Medicare is the federal health program for the elderly and disabled. It covers Barnum because of his age. Because of his low income, Medicaid, the state-federal health program for the poor, pays for whatever health costs aren’t covered by Medicare and enrolled Barnum in the managed-care plan Care Improvement Plus.
As a group, dual eligibles cost state and federal governments a combined $300 billion annually. They comprise 16% of Medicare’s enrollees but account for 27% of its spending. They make up 15% of Medicaid beneficiaries but draw 39% of its spending, according to the Centers for Medicare and Medicaid Services.
Medicare covers their basic acute-care services such as physician, hospital and prescription drug costs. Medicaid pays for most of their long-term care, whether in nursing homes or in community-based care, and it covers Medicare’s deductibles, co-payments and other cost-sharing the patient otherwise would owe out of pocket.
Medicare and Medicaid were never designed to work together, so the way states and the federal government split the dual eligibles’ bills leads to inefficient care, experts say.
Today, only about 12% to 15% of the duals are covered by private health plans. Because they pay almost nothing for their health care, duals have little financial incentive to join a health plan, which can restrict their members to certain health providers. As a result, duals usually stay in traditional fee-for-service Medicare, where they can use any doctor or hospital.
America’s Health Insurance Plans (AHIP), the insurers’ trade group, estimates that if all the duals were put into the best managed-care plans, state and federal governments could save as much as $125 billion during the next decade.
Seniors’ advocates, though, are leery about a mandate that could limit the choice of health care providers that dual eligibles could use.