Health law initiative lets states save by melding Medicare, Medicaid - The Buffalo News
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Health law initiative lets states save by melding Medicare, Medicaid

WASHINGTON – In the nearly 50 years since Medicaid and Medicare were enacted, the two health care programs – one for the poor and the other for the elderly and disabled – have remained separate, with different rules, duplicative benefits and conflicting financial incentives. The result has been wasted money and disjointed care for more than 10 million “dual eligibles,” the Americans who qualify for both programs.

Massachusetts, which provided the model for the Affordable Care Act, is the first state to take advantage of an Affordable Care Act initiative designed to give dual eligibles better care at a lower cost. In 2011, the new Medicare-Medicaid Coordination Office began awarding $1 million planning grants to participating states and made critical Medicare data available to them for the first time. Now, instead of carrying separate cards for Medicare and Medicaid, dual eligibles in Massachusetts who are enrolled in the state’s One Care program will get a single health plan and a case manager to coordinate their care.

Other states are preparing to follow. California will begin participating in May, and these states will join later this year and in 2015: Colorado, Connecticut, Idaho, Illinois, Iowa, Michigan, Minnesota, Missouri, New York, North Carolina, Ohio, Oklahoma, Rhode Island, South Carolina, Texas, Virginia and Washington.

The stakes are high: As a group, dual eligibles make up 15 percent of all Medicaid enrollees but account for nearly 40 percent of all costs, or about $109.9 billion in 2009, according to the most recent federal statistics. For Medicare, they represent 20 percent of all enrollees and more than 30 percent of costs, or $162.1 billion in 2009.

Under the initiative, state Medicaid programs and the federal Medicare agency agree to split any cost savings that result from the experiment. Most states are contracting with managed care organizations to integrate the two plans.

Boston resident Dennis Heaphy, 52, a quadriplegic who is an advocate for people with disabilities, said he and others are closely monitoring Massachusetts’ experiment.

“We feel a real responsibility to get it right, because everybody in the country is watching us,” he said.

For dual eligibles, it can be difficult to keep track of who pays for what. Furthermore, experts believe that misaligned financial incentives in the two programs have cost states and the federal government billions of dollars.

For example, in as many as 40 percent of cases, the hospitalization of a nursing home resident might have been avoided if the nursing home had provided adequate medical care, according to a report from the Urban Institute. But states, which pay for nursing home care through Medicaid, have no financial interest in correcting the problem, since the federal government pays hospital bills through Medicare.

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