To appreciate one of the great snafus of American health care, consider the plight of people who are poor, elderly — often with a disability — and insured by both Medicare and Medicaid.
One might think having two insurers must be better than one. But these two programs were never meant to work together. Rather than cooperating, the programs follow rules that create incentives for each partner to shift costs to the other, while patients are stuck in the middle, without the care they need.
For dually eligible Americans, bureaucratic nightmares are their daily realities.
A woman in her mid-30s with spina bifida relied on her electric wheelchair to get around. But when it failed in the middle of a busy New York City street, Medicaid required that she first ask Medicare to replace the wheelchair, knowing full well that the program wouldn’t cover it. It was only once Medicare denied the request that Medicaid began to consider her pleas for a replacement. The whole process took 20 months — so long that she resorted to a makeshift chair that left her with pressure sores and back aches.
In another case, an older man lost his dentures when coverage problems caused him to switch rehab centers multiple times, forcing him to eat only soft foods for years while Medicare and Medicaid refused to pay for replacements.
And a woman with a stroke struggled to receive needed rehabilitation while getting threatened with massive Medicare copays that Medicaid should cover. Then she was told she would lose her Medicaid coverage unless she produced five years of income documentation and re-registered within 13 days. Even her niece, a former top policy strategist at the Center for Medicare and Medicaid Innovation – the Centers for Medicare & Medicaid Services regulator – was stymied by the maze of requirements.
If CMS’s top leaders struggle to navigate the system, who can?
These accounts are emblematic of the problems that plague the nearly 13 million dually eligible individuals with disabilities or are old enough to qualify for Medicare and poor enough to get Medicaid. Nearly all make less than $20,000 a year. They are arguably sicker than any other group enrolled in Medicare or Medicaid, with lifespans that are a decade shorter than other patients. And they cost the government a cool half a trillion dollars a year — a sum greater than any other group and one that will surely rise as the country ages.
It’s not that Medicare and Medicaid fail to provide good coverage. The problem is that the two programs operate independently. At best, they fail to integrate coverage and coordinate care across the two plans.
The New Yorker’s wheelchair woes were created by the fact that federal law requires Medicaid to pay last and only when other payers don’t cover the service, and by Medicare’s detailed, but often outdated, rules that pay for wheelchairs only for inside use. The result should not be surprising, because it is the predictable results of the policies that we have allowed to persist.
As the challenges of navigating Medicare and Medicaid have grown in recent years, commercial companies offering Medicare plans have jumped to offer hundreds of “look-alike” plans that claim to be tailored to meet the needs of dually eligible individuals. In reality, these look-alike plans are designed for marketing appeal, not actual integration with Medicaid.
There has also been growth in integrated managed care products known as Special Needs Plans. These plans offer varying degrees of integration but only in some areas of the country. In some states, an influx of Special Needs Plans gives some beneficiaries dozens of integrated plans to choose from, while in other areas, the choice is limited to just one, or none at all.
To address the problems, a new bill has been introduced by a bipartisan group of senators, led by U.S. Sen. Bill Cassidy (R-La.), a physician who has treated dually eligible individuals and seen firsthand the challenges they face. The bill would have the federal government establish a list of integrated plans that states could choose from. To incentivize true coordination and limit the struggle over which plan pays for what, the bill requires integrated financial accounting between Medicare and Medicaid, and provides incentives to coordinate care by enabling states to share in savings that would otherwise go to Medicare. The measure has already garnered three Republican and three Democratic co-sponsors.
Meanwhile, a second measure, from U.S. Sen. Robert Casey (D-Pa.), was also introduced recently. This bill would give $300 million to CMS and the states to create their own integrated plans covering many of the same elements. It would spur integration by raising the federal matching funds that states receive to support administrative activities focused on integration to 80 percent, up from the customary 50 percent.
Here are three principles that should guide decisionmakers going forward:
- Design integrated coverage by first placing the experiences of the individuals who use these plans at the center and including all the services — medical and non-medical supports — that are needed to thrive. A consumer-informed approach is sorely lacking currently.
- Align financial incentives across Medicare and Medicaid so that a single entity receives unified payment, and responsibility, for providing care. This will eliminate two perverse incentives we see in the system today: first, one payor avoiding paying for prevention today because the other payer will bear the long-term costs, and second, all the back-and-forth currently required to determine which entity provides primary coverage for a given service.
- Provide real, informed choice to everyone who is dually eligible. That doesn’t mean providing dozens of options that overload the brain and lead individuals to choose plans that are not in their financial interest. It means eliminating poor choices and providing consumers with options across a small but meaningful number of integrated plans that are easy to compare, and supporting those choices with good decision aids.
Meaningful change in improving care will require proceeding with caution: there are hundreds of billions of dollars at stake and policymakers will need to be on guard against profit seeking at the expense of quality care. Policymakers and implementers will also need to avoid disrupting successful patient-provider relationships for vulnerable people.
As a physician and a health economist, I know there are monumental barriers to providing comprehensive, high-quality, patient-centered care for dually eligible patients. But we are compelled to try. The good news is that there is remarkable consensus across the country and across the aisle in Congress on the problems and the potential solutions. We can fix this together.
Rachel M. Werner, MD, Ph.D., is executive director of the Leonard Davis Institute of Health Economics at the University of Pennsylvania, where she is professor of medicine and the Robert D. Eilers Professor of Health Care Management and Economics. She is also a physician at the Philadelphia VA.
