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Posted to Web: September 01, 2003

Permanent Link: http://www.urban.org/url.cfm?ID=1000737

This analysis uses Medicaid administrative data to estimate the share of current Medicaid enrollment and spending attributable to dual eligibles and the fiscal effects of hypothetical reforms where the federal government takes up some or all of the states’ expenditures for dual eligibles. In the paper we find that the 7.2 million dual eligibles account for about 14 percent of Medicaid enrollees and for over 42 percent of Medicaid expenditures for medical services. Most of these expenditures are for long-term care services or prescription drugs. In the paper we present six hypothetical restructuring options where the federal government assumes a larger role in the financing of dual eligibles. The largest benefits would accrue to states if the federal government absorbed long term care spending for the dual eligibles, which currently accounts for about two-thirds of all spending on dual eligibles. But savings would be significant if the federal government absorbed responsibility for paying for Medicare premiums and cost sharing on Medicare covered services, which would provide a savings of $6.5 billion (2002 dollars). Taking over responsibility for prescription drugs would increase state savings to $5.6 billion. (Kaiser Commission on Medicaid and the Uninsured brief, September 1, 2003.)

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