Sen. Bill Cassidy: Poor coordination between Medicare and Medicaid

While dual-eligibles represent a small portion of Medicare and Medicaid beneficiaries, they account for a disproportionately large share of overall spending. Medicare spends $275 billion per year on dual-eligibles, which is twice as much on a per-person basis ($22,647) compared with non-duals, according to the Medicare Payment Advisory Commission. About 19% of Medicare enrollees are dually eligible but account for 34% of total Medicare spending. Medicaid spends $164.3 billion per year on duals, which is 1.5 times greater on a per-person basis ($13,483 per dual). Fourteen percent of Medicaid enrollees are dually eligible but account for 30% of overall spending. Part of the reason for this disproportionately higher spending is that many of these patients are sicker and have less access to private resources to pay for medical and other expenses. However, a great deal of waste occurs due to poor coordination between Medicare and Medicaid.

This is a concern as the Medicare program is on the brink of financial collapse. Medicare is expected to go insolvent in just six years. By 2028, Medicare trustees estimate that the Hospital Insurance, or Part A, trust fund will be unable to pay for more than 90% of the costs of care, jeopardizing access. When Medicare cannot pay hospitals for care anymore, millions of seniors and people with disabilities could lose access to life-saving care.

With those concerns in mind, a legislative response to these inefficiencies should be informed by several principles:

First, we must make sure that any solution accounts for the heterogeneity of this population. Dual-eligibles vary in age, gender, place of residence, nature of chronic conditions, income and asset levels, and access to community support. These variations affect this population’s needs and potential policy solutions.

Second, patient experience as a dual-eligible should be streamlined. Navigating health insurance with one payer can already be difficult; two payers for health insurance is an unwanted challenge. Additionally, some studies indicate that patients are worse off with two uncoordinated payers. Strong consideration should be given to simplifying coverage, which could include unifying management of benefits under a primary payer. This would improve clinical outcomes and prevent unnecessary spending by clearly aligning financial incentives toward the best outcomes for patients.

Lastly, any policy solution should recognize the diversity of states’ patient populations and varying program administration. We must continue to allow states to innovate. A strict one-size-fits-all, top-down approach from Washington is not in the best interest of patients.

By starting from these principles, we can increase quality care for patients, improve the system and strengthen the programs. Millions of Americans depend on us to act.

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