Enrollment and Spending Patterns Among Medicare-Medicaid Enrollees (Dual Eligibles)

Medicare and Medicaid are the two largest public health insurance programs in the United States. Medicare is the primary source of health insurance coverage for people ages 65 and older and covers people under 65 with long-term disabilities who qualify for Medicare through the Social Security Disability Insurance program. Medicare is a federal program financed primarily by general revenues, payroll tax contributions, and premiums. Medicaid is the nation’s largest public health insurance program for low-income Americans and the primary payer for long-term services and supports. The federal government sets core Medicaid requirements, but states have some flexibility with respect to the people they cover and the benefits they provide. Medicaid is jointly funded by states and the federal government. The federal government matches state spending for eligible beneficiaries and qualified services without a limit. The federal share of spending for most Medicaid enrollees is determined by a formula that provides a match of at least 50% and provides a higher match for states with lower per capita income relative to the national average.

Medicare-Medicaid enrollees, also referred to as dually eligible beneficiaries or “dual eligibles”, are enrolled in both programs. They receive their primary health insurance coverage through Medicare and receive some assistance from their state Medicaid program. Of the 12.5 million beneficiaries enrolled in both Medicare and Medicaid in 2020, most (73%) were “full-benefit” Medicare-Medicaid enrollees who are eligible for the full range of Medicaid benefits that are not otherwise covered by Medicare, such as long-term services and supports. States are required to provide certain services such as nursing facility care and transportation to medical appointments, and may choose to provide additional services such as home and community-based services and dental care. “Partial-benefit” Medicare-Medicaid enrollees are not eligible for full Medicaid benefits but are eligible for assistance with Medicare premiums and, in many cases, cost sharing through the Medicare Savings Programs (see Box 1).

Box 1: How do Medicare Beneficiaries Become Eligible for Medicaid?

To be eligible for full Medicaid benefits, Medicare beneficiaries must meet states’ Medicaid eligibility criteria. States are required to cover Medicare beneficiaries who receive Supplemental Security Income, and may choose to cover additional groups such as people with income less than the federal poverty level and those who need long-term services and supports. Most, but not all, full-benefit Medicare-Medicaid enrollees are also eligible for Medicare premium and cost-sharing assistance covered under the Medicare Savings Programs, which are administered by states. Federal law defines minimum income and resource limits for each of the Medicare Savings Programs, which are updated annually by the Centers for Medicare and Medicaid Services (CMS). Programs vary by the type of assistance and state, but generally Medicare beneficiaries had to have income below $1,549 each month for an individual ($2,080 for a couple) and resources below $8,400 for an individual ($12,600 for a couple) in 2022. States can raise those limits above the federal floor to provide coverage to individuals who qualify based on the higher eligibility criteria for the Medicare Savings Programs.

This brief examines national and state-level data on enrollment and spending for Medicare-Medicaid enrollees using the 2019 and 2020 Medicare Beneficiary Summary Files and the 2019 Transformed Medicaid Statistical Information System (T-MSIS) (see Methods box for details). Spending data for Medicare includes beneficiaries in traditional Medicare only, since spending data for beneficiaries enrolled in Medicare Advantage plans are unavailable. State-level data on Medicare-Medicaid enrollment and spending are available through KFF’s State Health Facts.

Key findings include:

• In 2020, 12.5 million people were enrolled in both Medicare and Medicaid, 73% of whom were eligible for full Medicaid benefits, such as long-term services and supports.
• In 2019, Medicare-Medicaid enrollees comprised 17% of the traditional Medicare population and 14% of the total Medicaid population but accounted for a higher share of spending in both programs: 33% of traditional Medicare spending and 32% of Medicaid spending.
• Medicare spending per Medicare-Medicaid enrollee in traditional Medicare was higher for full-benefit enrollees than partial-benefit enrollees, and both amounts were substantially higher than per capita spending for other Medicare beneficiaries ($23,235 for full-benefit enrollees versus $18,427 for partial-benefit enrollees versus $9,448 for all other Medicare beneficiaries without Medicaid coverage).
• Medicaid spending per Medicare-Medicaid enrollee was more than 7-times greater for full-benefit enrollees than for partial-benefit enrollees ($19,811 versus $2,683), because Medicaid only paid for Medicare premiums and in many cases, cost sharing for partial-benefit Medicare-Medicaid enrollees. Average spending for all other Medicaid enrollees (those without Medicare) was $5,387. Most Medicaid enrollees without Medicare are children and adults under age 65, who do not qualify on the basis of disability and are less likely to use costly long-term services and supports covered by Medicaid.

How many people were enrolled in both Medicare and Medicaid?

In 2020, 12.5 million people were enrolled in both Medicare and Medicaid (Figure 1). Among Medicare-Medicaid enrollees, 9.1 million (73%) were full-benefit enrollees and 3.4 million (27%) were partial-benefit enrollees.

Medicare-Medicaid enrollees comprised 20% of the total Medicare population (including beneficiaries in both traditional Medicare and Medicare Advantage) and 14% of the total Medicaid population, but the shares varied widely across states. In 2019, Medicare-Medicaid enrollees comprised over 25% of all Medicare beneficiaries in Connecticut, the District of Columbia, Louisiana, Maine, Mississippi, and New York, but only 10% in Utah. Medicare-Medicaid enrollees accounted for more than 20% of Medicaid enrollees in Alabama, Maine, and Mississippi, but less than 10% in Alaska, and Minnesota.

Federal law defines minimum eligibility criteria for Medicaid but states have flexibility to adopt more permissive Medicaid eligibility criteria than federal standards. Variation across states in the share of the Medicare population with both Medicare and Medicaid coverage depends mainly on the income and asset distribution of the Medicare population and Medicaid eligibility criteria for adults who have disabilities or are age 65 or older. The percentage of Medicare beneficiaries who are Medicare-Medicaid enrollees is higher in states where more people meet financial eligibility criteria—either because more people have limited financial resources or because the state has extended Medicaid eligibility to a broader segment of the Medicare population. Variation across states in the share of the Medicaid population with both Medicare and Medicaid depends primarily on how state eligibility criteria for adults who have disability or are age 65 or older compare with the eligibility criteria for children, pregnant women, and other adults.

How much did Medicare and Medicaid spend on Medicare-Medicaid enrollees?

In 2019, Medicare spent $152 billion on Medicare-Medicaid enrollees in traditional Medicare, while Medicaid spending on Medicare-Medicaid enrollees was $190 billion. Medicare-Medicaid enrollees accounted for a larger share of spending in each program than their respective shares of Medicare and Medicaid enrollment (Figure 3). Medicare-Medicaid enrollees comprised 17% of the traditional Medicare population but accounted for 33% of traditional Medicare spending. (These estimates include spending for the 6.8 million Medicare-Medicaid enrollees in traditional Medicare only, excluding the 5.5 million Medicare-Medicaid enrollees in Medicare Advantage, because Medicare spending data are not available for beneficiaries enrolled in Medicare Advantage plans). Medicare-Medicaid enrollees comprised 14% of Medicaid enrollment but 32% of federal and state Medicaid spending.

How much did Medicare and Medicaid spend per Medicare-Medicaid enrollee?

In 2019, Medicare spent $23,235 per full-benefit Medicare-Medicaid enrollee in traditional Medicare, on average, compared with $18,427 per partial-benefit Medicare-Medicaid enrollee in traditional Medicare and $9,448 per traditional Medicare beneficiary not enrolled in Medicaid. Higher average per capita Medicare spending among full-benefit Medicare-Medicaid enrollees likely reflects their poorer health status and greater need for medical care: in 2020, full-benefit Medicare-Medicaid enrollees were more likely to be in fair or poor health and have mental health conditions or Alzheimer’s disease and other types of dementia relative to partial-benefit Medicare-Medicaid enrollees or Medicare beneficiaries without Medicaid. Those conditions have been associated with higher spending, including higher hospitalizations and emergency department visits. Full-benefit Medicare-Medicaid enrollees were also more likely to have limitations in activities of daily living (ADLs) than partial-benefit Medicare-Medicaid enrollees or Medicare beneficiaries without Medicaid. Higher Medicare spending among full-benefit Medicare-Medicaid enrollees also may reflect their ability to access health care services without substantial financial barriers associated with cost sharing, since most full-benefit Medicare-Medicaid enrollees receive Medicaid coverage of Medicare cost sharing. In addition, this group has access to certain Medicaid benefits, such as non-emergency medical transportation and case management, which could ease access barriers and increase use of Medicare-covered services.

In 2019, Medicaid spent $19,811 per full-benefit Medicare-Medicaid enrollee compared with $2,683 per partial-benefit Medicare-Medicaid enrollee, and $5,387 per Medicaid enrollee without Medicare. Medicaid per capita spending for partial-benefit Medicare-Medicaid enrollees was considerably lower than for full-benefit enrollees because Medicaid only pays for premiums and, in many cases, cost sharing for partial-benefit enrollees. Higher Medicaid per capita spending for full-benefit Medicare-Medicaid enrollees reflects coverage of Medicaid benefits in addition to spending on Medicare premiums and, in many cases, cost sharing. Medicaid per capita spending for full-benefit Medicare-Medicaid enrollees was several times larger than for Medicaid enrollees without Medicare, both because of higher health care needs among full-benefit Medicare-Medicaid enrollees, which leads to higher per capita spending, and because most Medicaid enrollees (without Medicare) are children and adults under age 65 who do not qualify on the basis of a disability and tend to have lower per capita spending.

Medicare and Medicaid spending per full-benefit Medicare-Medicaid enrollee varied across states. In 2019, Medicare spending per full-benefit Medicare-Medicaid enrollee in traditional Medicare ranged from $16,032 in New Mexico to $29,360 in Florida. Medicaid spending per full-benefit Medicare-Medicaid enrollee ranged from $10,826 in South Carolina to $43,933 in North Dakota. A myriad of factors could be contributing to the variation in state spending, including but not limited to, variation across states in Medicare-Medicaid enrollees’ health and long-term care needs, variation in state Medicaid programs’ eligibility criteria and covered benefits, differences in payment rates, and geographic differences in the use of health care.

Conclusion

Medicare-Medicaid enrollees account for a higher share of spending relative to their share of enrollment in both Medicare and Medicaid, likely because Medicare-Medicaid enrollees tend to have greater health and functional needs than people who are enrolled in only Medicare or only Medicaid. Several initiatives have been launched that aim to improve health care and reduce spending for Medicare-Medicaid enrollees by integrating the financing and delivery of care across the Medicare and Medicaid programs. Currently, there is mixed evidence on the effect of these initiatives on health outcomes, access to care, and spending. Given the high costs and significant needs of Medicare-Medicaid enrollees as a group, it is likely that policymakers will continue to explore new policy options for improving the coordination and delivery of care between the Medicare and Medicaid programs.

Methods

Enrollment and Spending for Medicare-Medicaid Enrollees, based on Medicare Claims Data: Medicare enrollment and spending is based on analysis of Centers for Medicare & Medicaid Services Chronic Conditions Data Warehouse 2019 research-identifiable Master Beneficiary Summary File (MBSF) Base and the Cost and Utilization Segment. The estimates are based on a 20% sample of Medicare beneficiaries that is weighted to approximate the total Medicare population. Enrollment: For the enrollment counts, Medicare beneficiaries had to have Part A and/or Part B for at least one month in 2019. Additionally, only beneficiaries in the 50 states and Washington, D.C. are included. For Medicare-Medicaid enrollment as a share of total Medicare enrollment nationally and by state, we included beneficiaries in both traditional Medicare and Medicare Advantage. Identifying Full-Benefit and Partial-Benefit Medicare-Medicaid enrollees: We identified Medicare-Medicaid enrollees if they ever had a month in 2019 with the relevant coverage. Those who ever had a dual eligibility code of 02, 04, or 08 were assigned full-benefit Medicare-Medicaid enrollee status and those with a code of 01, 03, 05, or 06 were assigned partial-benefit Medicare-Medicaid enrollee status. We assigned those with any month of full-benefit status as full-benefit Medicare-Medicaid enrollees, those with no full-benefit status but any month of partial-benefit status as partial-benefit Medicare-Medicaid enrollees, and all other Medicare beneficiaries as non-Medicare-Medicaid enrollees. Spending: Medicare beneficiaries had to meet the enrollment sample requirements and have no Medicare Advantage coverage during the year. Total Medicare spending was calculated as the sum of all Medicare Part A, Part B, and Part D service category payments in the MBSF Cost and Utilization Segment. Medicare spending (total and per capita) does not include beneficiary cost-sharing liability. Enrollment and Spending for Medicare-Medicaid Enrollees, based on Medicaid Claims Data: Enrollment and spending for Medicare-Medicaid enrollees based on Medicaid claims uses 2019 Transformed Medicaid Statistical Information System (T-MSIS) Analytic Files (TAF) Research Identifiable Files (RIF) files, 2019 CMS-64 administrative data, and Medicare premium data reported by CMS. Identifying Full-Benefit and Partial-Benefit Medicare-Medicaid enrollees: We identified Medicare-Medicaid enrollees using their latest valid dual eligibility code. Those with a dual eligibility code of 02, 04, or 08 were assigned full-benefit Medicare-Medicaid enrollee status and those with a code of 01, 03, 05, or 06 were assigned partial-benefit Medicare-Medicaid enrollee status. All other Medicaid enrollees were assigned as non-Medicare-Medicaid enrollees. A small number of Medicare-Medicaid enrollees were reported as eligible for Medicaid through the ACA expansion pathway. These enrollees were re-coded as non-Medicare-Medicaid enrollee because Medicare beneficiaries are not eligible for Medicaid through the ACA expansion pathway. Enrollment Used to Calculate Shares: Medicare-Medicaid enrollee enrollment and spending are reported as a share of total Medicaid enrollment and spending. Spending: Medicaid spending is derived from two data sources. T-MSIS spending includes Medicaid spending on fee-for-service spending on health care and payments to managed care plans. Data on Medicare premiums (which are not in T-MSIS) for Part A and Part B are estimated for Medicare-Medicaid enrollees based on months of Medicare enrollment as a Medicaid beneficiary. Premiums change slightly year-to-year and are based on the amounts reported by CMS. Assigning Medicare Premiums to Medicaid Enrollees: Data on Medicare premiums (which are not in T-MSIS) for Part A and Part B are estimated for Medicare-Medicaid enrollees based on months of Medicare enrollment as a Medicaid beneficiary. Part A premiums were assigned to every month an Medicare-Medicaid enrollee had a monthly dual eligibility code of 05 and Part B premiums were assigned each month for which enrollees had codes of 01, 02, 03, 04, or 06. Premiums change slightly year-to-year and are based on the amounts reported by CMS. For 2019, the Centers for Medicare & Medicaid Services reported monthly Part A premiums were $437 and monthly Part B premiums were $135.50.