Dual eligibles: Federal and state governments point at each other

While the federal and state governments each try to convince the other to take on more responsibility for dual eligibles — those eligible for both Medicare and Medicaid — a new study finds that the focus should be directed more toward serving the population rather than avoiding it.

Medicare, in combination with Medicaid's supplementation, assures access to medical services for its lowest income beneficiaries just as it does for those who are financially better off. But Medicaid, a means-tested program, on its own has never provided the same guarantee of access. In particular, access to home- and community-based services has always been explicitly limited, provided primarily through waivers from Medicaid requirements that allow, among other things, limits on the size of the population being served.

From a fiscal perspective, lead author Harriet Komisar tells State Health Watch, either the federal or state governments would be better off if the other were to bear responsibility for this highly vulnerable, expensive population. But from the perspective of the dual eligibles themselves, enhancement, not retraction, of federal responsibility is essential to better meet critical long-term care needs.

Ms. Komisar, an associate research professor at Georgetown University, says the dual-eligible population is relatively small in number, consisting of about 7 million people in 2000, less than one-fifth of the total number of beneficiaries in either Medicaid or Medicare. But they consume a substantial portion of each program's resources — 24% of Medicare's total spending in 2000 and 42% of Medicaid's in 2002.

Recent policy debates have turned a spotlight on the overlapping federal and state responsibilities to dual eligibles, according to Ms. Komisar. The new Medicare Modernization Act reduced but didn't eliminate limits to Medicare coverage that leave states financially responsible for dual eligibles' prescription drug costs. Under the new law, Medicare will be responsible for drug benefits for dual eligibles beginning in 2006, but states must pay the federal government a specified proportion of the estimated amount they would have spent had they continued to provide drug coverage for dual eligibles.

Even more costly to states than drug coverage, Ms. Komisar wrote, is Medicaid's responsibility for long-term care. That responsibility is not only for the poorest elderly and people with disabilities, but also for middle-income people who exhaust their resources purchasing acute or long-term care services. Fiscally strapped governors have argued that both long-term care and health care expenses for the Medicare population should be a federal rather than state responsibility.

All levels want fiscal relief

Ms. Komisar said the question has been integral to debates about public spending and the size of government for decades. Its appearance on the current political agenda arises from both federal and state fiscal concerns. The federal government's interest, she said, is in limiting the expense of a new Medicare drug benefit and the federal contribution to Medicaid spending. State governments that are facing extraordinary budget pressures want relief from their existing obligations and are understandably resistant to be left holding the bag for a costly and growing population.

"This fiscal struggle between levels of government tends to obscure what is really at stake in policy proposals for both Medicare and Medicaid: The capacity to meet the service needs of vulnerable elderly and disabled people," she wrote.

The survey used for this report was conducted in 1999. Ms. Komisar tells State Health Watch that it was a unique survey in that it asked specific questions about the need for personal services at home and the extent to which those needs were being met, and nothing else like it has been conducted since.

"Nothing inherently has changed that makes us think that the findings are outdated," she says. "For example, we know there has been no great increase in home- and community-based services."

Ms. Komisar says she and her colleagues found that community-based elderly dual eligibles are disproportionately poor, sick, and living alone, compared with other community-based elderly Medicare beneficiaries. Despite their significant need for health care, few report difficulty getting medical care when they need it. But a large proportion of dual eligibles who need long-term care (help from another person with fundamental tasks of life) report they don't get such care and as a result experience serious consequences (falling, soiling, or wetting themselves, or being unable to bathe or wear clean clothing).

"Fortunately, policy appears to make a difference to these outcomes," she says. "Although unmet needs are substantial in all states surveyed, analysis indicates that the broader the access to paid (publicly supported) care in a state, the lower the incidence of unmet needs. If the nation's goal is to assure adequate care and quality of life for its most vulnerable citizens, the policy debate should emphasize the importance of promoting, rather than avoiding, responsibility for adequate service."

Six states in survey

The 1999 survey funded by the Robert Wood Johnson Foundation and the Commonwealth Fund looked at community-based dual eligibles in Georgia, Iowa, Massachusetts, New Jersey, Washington, and Wisconsin. Ms. Komisar said the states were chosen to reflect variation with respect to Medicaid home care spending and Medicare home health spending, along with variation generally in Medicaid programs and geographic location. Further, the range of state characteristics reflects the range that exists among states nationwide.

Based on combined data for the six survey states, community-based dual eligibles are more likely to be female, widowed, living alone, and have low income than other community-based elderly Medicare enrollees in these states, although the characteristics of elderly community-based dual eligibles vary somewhat among the states, reflecting the differences in the states' general populations and, probably to a lesser degree, differences in their eligibility criteria for Medicaid.

Health problems are prevalent among dual eligibles. Half of these elderly dual eligibles are in fair or poor health. Chronic diseases are common, with 92% reporting at least one chronic condition and half the population having three or more chronic conditions. The most commonly reported conditions are arthritis (65%), high blood pressure (62%), and heart conditions (40%).

Consistent with their relatively poor health status, dual eligibles use a lot of health care services. Some 45% of the surveyed community-based elderly dual eligibles reported using hospital care in the previous year, with 35% using the emergency room and 29% having a hospital stay of at least one night, and 19% did both. The overwhelming majority — 88% — take prescription medications, and 35% take five or more prescription drugs.

In addition to medical care, 32% of community-based elderly dual eligibles need long-term care, the help of another person with fundamental, routine tasks. Specifically, people with long-term care needs include both individuals who receive help from another person and those who do not but report a need for assistance with one or more activities of daily living.

Long-term care key problem

Ms. Komisar reported that while community-based elderly dual eligibles have few problems obtaining medical care, the results are more troubling in their implications for the adequacy of long-term care services for dual eligibles. To assess how well the combination of paid services and unpaid assistance was meeting people's long-term care needs, the survey identified individuals receiving help with activities of daily living from another person, and asked both people receiving help and those not receiving help whether they need more assistance with the activities of daily living.

"The survey results indicate widespread shortfalls in people's ability to get needed care," Ms. Komisar wrote. "The proportion of people reporting unmet needs rises with disability level, with 72% of people who need help with five to six activities of daily living reporting unmet need, compared with 48% of people who need help with one to two activities of daily living. The survey indicates that unmet needs can have serious consequences for the people reporting it. Overall, 56% of people with any unmet need for help with activities of daily living report at least one of five serious consequences because of a lack of assistance — bathing, dressing, falling, wetting or soiling, or going hungry."

Ms. Komisar tells State Health Watch policy-makers need to know that both Medicare and Medicaid are vital for the elderly and people with disabilities. And for those with disabling health conditions who need service at home, "it's shocking how many have needs that are not adequately met," she says.

The survey results also show, she says, that when personal supportive services are not provided, there are obvious adverse consequences. "It's clear that quality of life is compromised and there are serious health needs," she says.

The problem with support services, according to Ms. Komisar, is that they are not provided by either program; they are not covered by Medicare by design, and Medicaid varies greatly state-by-state. One potential solution, she says, might be to require Medicaid to provide a specific level of coverage in all states, but it also might take more federal investment to improve the situation.

That the problem is not being addressed, Ms. Komisar says, relates to a broader difficulty in convincing people of the need for investment in long-term care. "People don't see the unmet needs," she says, "and that's why we've been trying to show the needs and the consequences. People are much more aware of the problems that occur with the uninsured than they are with those who are dually eligible for Medicare and Medicaid.

Drug benefit concerns

Meanwhile the issue of personal care services has taken a back seat to potential problems created by the new Medicare Part D prescription drug benefit. Toward the end of 2005, eight advocacy groups asked the federal courts to ensure that no elderly or disabled Americans lose access to their prescription drugs as they enroll in the new Medicare plan. The groups filed suit on behalf of the people who qualify for Medicare and Medicaid because of their incomes. The groups said they were concerned that some dual eligibles will no longer be able to obtain drugs, either because they weren't enrolled in a drug plan or could not understand communications about their new coverage.

"If the government transitions 99% of these men and women flawlessly, there will still be 64,000 people without their medicine come January," said Medicare Rights Centers president Robert Hayes. "That cannot be allowed."

The suit asked for a system under which existing coverage would be continued until the beneficiaries are enrolled in a plan that meets all their prescription needs. Under the transition plans, people who don't choose a plan were to be automatically enrolled effective Jan. 1.

Centers for Medicare & Medicaid Services spokesman Gary Karr said the agency has taken numerous steps to make sure that people with Medicare and Medicaid would have their drug coverage on Jan. 1, including the automatic enrollments.

"We're also working on further steps to insure that, when a beneficiary goes to a pharmacy in 2006, they'll be able to get their prescription drugs, even if the only proof they have is that they are in Medicaid and Medicare," he said.

In addition, CMS administrator Mark McClellan told state Medicaid directors that the agency has assigned 5,498,604 dual eligibles to randomly chosen Medicare prescription drug plans. They were mailed letters informing them of their new coverage and of the fact that they have an option to switch to another plan.

CMS also said pharmacists can file eligibility inquiries to determine a beneficiary's coverage if dual eligibles don't know their drug plan. And it said it has developed a "point of sale mechanism" to ensure coverage if there is a time lag when a beneficiary is first assigned to a plan or switches in and out of dual eligibility. Under that mechanism, CMS contractors immediately can confirm if beneficiaries are eligible and arrange to enroll them in a plan.

However, attorneys representing some low-income Pennsylvanians filed suit asking the courts to block automatic enrollment of dual eligibles in Medicare managed care plans.

The suit claimed automatic enrollments could force some beneficiaries to change their doctors or hospitals, and said the government lacked legal authority to make the change.

Contact Ms. Komisar at (202) 687-2574; e-mail: komisarh@georgetown.edu. HHS information is available at www.cms.hhs.gov.