There is a class of healthcare consumers that are unique in their needs and substantial in the resources they require. These individuals will likely suffer from multiple health issues, lack a good support system, and be disproportionately prone to requiring care on an emergent basis. These people are the so called "dual eligibles." Dual eligible beneficiaries are individuals who qualify for both Medicare, a federal health benefit program primarily for those who are disabled or over 65, and Medicaid, a state health benefit program for those who fall under a given state’s poverty level designation. Almost all dual eligible individuals have low or no incomes, with nearly 90% being far below the federal poverty level. Besides being poor, the dual eligible population has other unique socio-demographic characteristics. Compared to the Medicare population, they are disproportionately female and in minority groups, with many being African American or Hispanic. More than half are not high school educated, have limited English language skills, and live alone.
And the healthcare industry has done a very poor job in meeting the unique needs of this population and moving them closer to stability in their health. There are about 8.3 million individuals in dual eligible status accounting for about $300 billion in annual healthcare spend. In addition, many are disabled (physically or mentally) with complicated health conditions. Kaiser Family Foundation reports that nearly 40% of duals suffer from both physical and mental diseases, and these multiple co-morbid conditions further complicate and add cost to care. Medicare covers 56% of the health spending for duals, Medicaid will kick in at the gaps in Medicare’s coverage, such as long-term care or prescription drug coverage.
- According to the Congressional Budget Office (CBO), duals represent 13% of the total Medicare and Medicaid population, but account for 34% of the total cost of these programs.
- For Medicare, 18% is dual eligible and accounts for nearly 27% of total Medicare program spending. For Medicaid, 15% of the population is dual eligible accounting for 39% of the costs in that program.
- Duals are responsible for 27% of total long-term care expenditures.
- Annual spending for a single dual eligible consumer averages over $19,400 and can exceed $38,500 if more than one mental condition is present (20% of duals meet these criteria). PMPMs (per member per month) for a dually eligible member can easily exceed $3,500, which is often more than three times the cost of a healthy Medicare enrollee. A large number of duals suffer from severe physical and mental challenges requiring extensive support services. Mental illnesses including schizophrenia, Alzheimer’s, and other forms of dementia, stroke, congestive heart failure, and cerebral palsy are more prevalent with duals than in the non-dual eligible Medicare population.
- 20% of duals live in an institutionalized setting (and 16% living in nursing homes), consuming more than $56,000 a year. They are among the most expensive to care for on a per capita basis.
Three million children are part of the dual eligible population, and many of them have special care needs which require close monitoring in order to avoid frequent hospitalization. In the coming years, the dual eligible population, along with their associated costs, is likely to grow. Under the Patient Protection and Affordable Care Act, Medicaid expansion is estimated to increase enrollment by 40%— to 24 million adults. Given the size of the duals population and their complex care needs, care coordination between the federally-run Medicare and state-run Medicaid programs are critical and currently lacking. Governments and private insurers need to focus attention on initiatives that improve care, promote wellness, lower costs, and reduce waste.