Priority Area 6: Focus on the Dually Eligible

People eligible for both Medicare and Medicaid account for 42 percent of total Medicaid spending. This group of frail elders and a subset of people with disabilities experiences poorly coordinated care and high costs. Improvements in care for those who are dually eligible has long been a priority for states.

The federal law creates new challenges and opportunities for states. On the challenge side, the changes to the Medicare Advantage program will have implications for existing Special Needs Plans, which, despite their limitations, have been one source for coordination between Medicaid and Medicare. It is not yet clear how this will play out. States will also need to figure out how to integrate the new CLASS Act—a voluntary long-term care insurance program—into their overall strategy for meeting the long-term care needs of their citizens.

On the opportunity side, the law extends and expands the "Money Follows the Person" demonstration program to provide enhanced matching funds to help residents of institutions move back into the community, and creates new options for supports for people with disabilities. The law also establishes a competitive rebalancing incentive program that provides enhanced Medicaid matching payments for home and community-based services if states adopt certain delivery system reforms. The federal law creates a new office within CMS that focuses exclusively on the dually eligible, and the dually eligible are a target population for reforms that can be implemented by the new Center for Medicare and Medicaid Innovation. These two offices have not yet taken shape, but they offer unique vehicles for states to pursue models of integration between Medicaid and Medicare that have never before been available.