July 24, 2014 SIGN IN | REGISTER

‘Dual-Eligibles’ Require New Ideas, Not Cuts

The public attention to negotiations between Congress and the White House over budget cuts has focused primarily on cuts in discretionary domestic programs, Medicare and Social Security. Almost lost in the shuffle has been Medicaid — in part because both parties and both branches have agreed that large cuts in Medicaid are needed and assumed that cuts that hit the poor are less politically dangerous than cuts that hit the middle class or elderly.

That assumption is dead wrong. The single largest component of Medicaid is long-term care for the elderly, followed by care for the seriously disabled. And the biggest chunk of all is care for what are called the “dual-eligibles,” those who qualify for both Medicare and Medicaid.

The long-term-care component has grown dramatically as Medicaid has become the de facto program for long-term care in the country. Of course, the recipients of it are poor as defined by the government — but most are middle-class elderly who have either diverted assets over time to their children and grandchildren to trigger Medicaid eligibility or depleted their savings on nursing home care. Also growing as a share of Medicaid spending is care for the seriously disabled, including a large share of those Americans with mental incapacities, ranging from Down syndrome to schizophrenia to Alzheimer’s disease, along with those with serious physical conditions such as quadriplegia.

Medicaid care includes providing assistance during the day so family members can work and provide for their families, including the disabled ones, while giving some quality of life to all concerned.

The 9.7 million dual-eligibles are the most important set of beneficiaries because they take up a huge share of both the Medicaid and Medicare budgets and because they represent the greatest challenge and the greatest opportunity when it comes to ballooning health care costs.

As Janet Adamy noted in the Wall Street Journal, the dual-eligibles make up 15 percent of the enrollees in Medicaid but account for 39 percent of Medicaid spending — and 27 percent of Medicare outlays.

These are the most chronically ill people in the society, and they account for a huge share of health care costs.

As Adamy pointed out, a large share of the cost problem arises from the lack of coordination between programs, leading to mismanagement of care and waste, with far more hospital days and higher nursing home and rehabilitation costs than should be the case given the problems.

The higher costs don’t mean better patient care; instead, patients are often shuffled around from place to place or put in limbo when the two programs argue over which one is responsible for treatment or kept in institutional facilities when it would be better for them — and less costly — to get care at home.

Some of the problems flow from the reality that Medicaid reimbursement rates are too low, leading providers to look for ways to shift the costs to Medicare, often in ways that are bad for treatment and disruptive for patients and their families.

Just as we never made a conscious policy decision to make Medicaid our long-term care mainstay, we never thought about the issues of dual eligibility. It is not at all clear that the negotiations over the budget are bringing any new thinking to the table — ways to reduce costs while improving the efficiency of care.

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