A CRS Series on Medicaid: Dual Eligibles
CRS Report for Congress
Dual Eligibles: A Review of Medicaid's Role in
Providing Services and Assistance
July 6, 2005
Analyst in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress
Dual Eligibles: A Review of Medicaid's Role in
Providing Services and Assistance
The term “dual eligibles” generally refers to individuals who qualify for both
Medicare benefits and all Medicaid benefits offered in their state. Although dual
eligibles represent about one-eighth of Medicaid and one-sixth of Medicare
beneficiaries, the high cost, significant needs, and considerable challenges in
delivering Medicaid and Medicare services to this group have drawn the attention of
both state and federal policymakers.
In FY2002, about 6.6 million individuals were considered dual eligibles
(including those who only received assistance with Medicare premiums and cost-
sharing). These individuals comprise a disproportionate care of Medicaid spending
— representing 13% of Medicaid beneficiaries and 41% of Medicaid spending. In
2002, Medicaid spent $91.7 billion on dual eligibles including $86.5 billion for
Medicaid services and Medicare cost-sharing and $5.2 billion for Medicare
premiums. Of the spending for Medicaid services and Medicare cost-sharing, 69%
was for long-term care services, followed by 17% for prescription drugs.
This report also provides an overview of dual eligible individuals and discusses
the specific role of Medicaid in serving this group. Dual eligibles are more likely to
be female, in a minority group, have less education, and have higher levels of
functional limitations than the average Medicare beneficiary.
Several current issues exist in providing services to dual eligibles, such as the
challenges in coordinating the delivery of Medicaid and Medicare services. Some
efforts have been made by states and the federal government to increase the
coordination of these services; several of these efforts are discussed in the report.
Another significant policy issue is the implications for dual eligibles of the new
Medicare prescription drug benefit enacted by the 108th Congress, (P.L. 108-173).
Starting in January 2006, dual eligibles will be required to enroll in the new Medicare
Part D benefit for coverage of their prescription drugs.
Finally, states must also cover the Medicare premiums and/or cost-sharing for
certain groups of low-income Medicare beneficiaries (some of whom may also
qualify for Medicaid). States also have the option of covering the Medicare
premiums of other individuals who are enrolled in the state’s Medicaid program.
Despite the variety of groups covered, identifying and enrolling these low-income
Medicare beneficiaries remains challenging.
To assist Congress in reviewing policy alternatives and understanding the
current status of Medicaid programs, the Congressional Research Service (CRS) has
produced a number of reports on various aspects of Medicaid including current
programs and policies. This report will be updated.
In troduction ......................................................1
Cost of Providing Services.......................................2
Coordinating Care for Dual Eligibles..............................2
Medicare Prescription Drug Benefit for Dual Eligibles.................2
Who Are the Dual Eligibles?.........................................3
Definition and Eligibility Requirements............................3
Demographic Information on Dual Eligibles.........................4
Estimates of Growth in Dual Eligible Population.....................6
Medicaid Services for Dual Eligibles..................................7
Total Medicaid Expenditures for Dual Eligibles......................8
Nursing Facility Services...................................10
Intermediate Care Facilities for Individuals with
Personal Care Services.....................................12
Home- and Community-Based Waivers.......................13
Prescription Drugs and Changes Resulting from the Addition of a
Medicare Drug Benefit.....................................14
Changes to the Scope of the Prescription Drug Benefit............15
Changes to Premiums and Cost-Sharing Requirements for
Phase-Down State Contribution..............................17
Cost of Providing Services to Dual Eligibles...........................17
Coordinating or Integrating Medicaid and Medicare Services..............19
Issues in Care Coordination.....................................19
Program Administration and Operations.......................19
Coverage of Similar Services................................20
Strategies to Coordinate or Integrate Services.......................20
Individuals Who Receive Assistance with Medicare Premiums and
Qualified Medicare Beneficiaries (QMB)......................25
Specified, Low-income Medicare Beneficiary (SLMB)...........26
Qualified Disabled and Working Individuals (QDWIs)...........26
Qualifying Individual-1 (QIs)...............................26
Total Number of Individuals Receiving Medicare Premium
Assistance through Medicaid............................28
Issues in Providing Assistance with Medicare Premiums and Cost-Sharing....30
Use of More Liberal Methods of Counting Income and Resources.......30
Coverage of Medicare Managed Care Premiums and Cost-Sharing......33
Amount of Medicaid Coinsurance for QMBs.......................33
Outreach for Medicare Premiums and Cost-Sharing Assistance.........34
Summary of Premiums and Cost-Sharing Assistance Groups...........36
Administration and Data Issues for Dual Eligible Programs................38
Administration of Claims Payment for Dual Eligibles................38
Administration of Medicare Premium Assistance....................38
Appendix A. Estimated Medicaid Expenditures for Dual Eligibles by State and
Category of Service, FY2002....................................41
Appendix B. Estimated Number of Dually Eligible Recipients for Selected
Service Types by State, FY2002.................................43
List of Figures
Figure 1. Dually and Non-Dually Eligible Medicare Beneficiaries by Age, 20026
List of Tables
Table 1. Comparison of Dual Eligible to Non-Dual Eligible Medicare
Beneficiaries by Key Demographic Factors, 2002.....................5
Table 2. Estimated Growth in the Number of Dual Eligibles, FY2004-2015, by
Basis of Medicaid Eligibility.....................................7
Table 3. Estimated Medicaid Expenditures for Dual Eligibles by Category of
Table 4. Estimated Number of Dually Eligible Recipients for Selected Service
Table 5. Estimated Number of Recipients and Spending on Medicaid
Long-Term Care Services for Dual Eligibles, FY2002................10
Table 6. An Overview of Medicare Premiums and Cost-Sharing
Table 7. Number of Individuals Receiving Assistance with Medicare
Premiums, April 2004.........................................29
Table 8. States Using Less Restrictive Income or Resource Methodology for
Determining Eligibility for QMB and SLMB in 2001.................31
Table 9. Summary of Medicare Premiums and Cost-sharing Coverage by
Dual Eligibles: A Review of Medicaid's Role
in Providing Services and Assistance
The term “dual eligibles” generally refers to individuals who qualify for both
Medicare benefits and those Medicaid benefits offered in their state. Persons
qualify for Medicare because they are either age 65 or older, or under age 65 and
have a disability and have been receiving Social Security Disability Insurance1
(SSDI) for two years. Persons qualify for Medicaid because they meet one of the
categories specified in federal law (e.g., aged, blind, or disabled) and meet the
income and asset standards states use for eligibility under this means-tested
However, the Centers for Medicare and Medicaid Services (CMS)2 also
includes in the definition of “dual eligibles” certain low-income Medicare
beneficiaries for whom Medicaid covers only certain Medicare premium and cost-
sharing obligations. This latter group (also referred to as the ‘Medicare Savings
programs’) consists of several subcategories of low-income Medicare
beneficiaries. Congress requires state Medicaid programs to cover certain
Medicare premiums, co-payments and/or deductibles for each of these groups, and
gives states the option of covering premiums for other groups. Unless otherwise
specified, all data on dual eligibles provided in this report include both those with
full Medicaid benefits and the low-income Medicare beneficiaries receiving only
premium and cost-sharing assistance from Medicaid.3
This report describes Medicaid’s coverage of dual eligibles including
demographic information on these beneficiaries, the high cost and intensive
service needs of dual eligible individuals and associated Medicaid spending, the
delivery and administration of dual eligible services and assistance with Medicare
cost sharing. Some features of the Medicare program are described to compare the
two programs and discuss their interaction, but a full discussion of Medicare
expenditures for dual eligibles and Medicare program issues is outside the scope
of this report.
1 Also qualifying for Medicare are persons who have End-Stage Renal Disease (ESRD).
2 The federal agency administering Medicaid and Medicare within the Department of Health
and Human Services (HHS).
3 The data used in this report, provided by CMS, does not differentiate between Medicaid
service expenditures and expenditures for Medicare co-payments and deductibles.
Dual eligibles represent about one in eight Medicaid beneficiaries and one in
six Medicare beneficiaries. However, the high cost, significant needs, and
considerable challenges in delivering Medicaid and Medicare services to this
group have drawn the attention of both state and federal policymakers. This
section provides a brief introduction of three key policy issues for dual eligibles
— the cost of providing services, coordinating care for dual eligibles and the new
Medicare drug benefit. Each of these issues is discussed in more detail later in the
Cost of Providing Services
Some policymakers have raised concerns about the overall expenditure
growth in both Medicaid and Medicare. Because dual eligible individuals account
for a disproportionate share of Medicaid and Medicare expenditures compared to
other groups, policy alternatives for dual eligibles are often discussed as ways to
address the growing cost of these programs. Some of these discussions include
how to provide the services in a more cost-efficient manner, but they also include
which unit of government (federal or state) should cover the cost of services for
Coordinating Care for Dual Eligibles
States and the federal government have attempted to address costs and at the
same time improve the quality of services through efforts to coordinate or
integrate services for dual eligibles. Coordinating services for these individuals is
a challenge because: (1) Medicare and Medicaid are administered and operated
very differently from one another; (2) the two programs cover comparable
services that differ in the eligibility requirements or scope; and (3) incentives exist
to shift costs between the two programs which do not necessarily result in the best
quality or continuity of care for the beneficiary.
Medicare Prescription Drug Benefit for Dual Eligibles
The 108th Congress enacted the Medicare Prescription Drug, Improvement
and Modernization Act of 2003 (MMA, P.L. 108-173). This legislation made
several changes to the Medicare program including offering Medicare
beneficiaries access to discounted prescription drugs during 2004 and 2005 and
adding a voluntary prescription drug benefit under a new Medicare Part D
beginning January 2006. These benefits include significant changes for dual
eligibles and those who receive assistance with Medicare premiums and cost-
sharing. In 2006, dual eligible individuals will no longer be eligible for
prescription drug benefits provided under the Medicaid state plan.4 To receive
4 The Medicaid state plan is the document that states submit to the federal government for
prescription drug coverage, dual eligibles must enroll in a private drug plan
authorized to provide the new Medicare Part D benefit.5
Who Are the Dual Eligibles?
Definition and Eligibility Requirements
As noted above, the term “dual eligibles” refers to persons qualifying for
both Medicare and Medicaid benefits. In FY2002, about 6.6 million individuals
were considered dual eligibles (including those who only received assistance with
Medicare premiums and cost-sharing).6 In order to qualify for Medicare,
individuals or their spouses (or, in some cases, their parents) must have worked
and paid Medicare taxes, and they are either elderly or they are under age 65 and
have blindness or a disability as determined by Social Security law.7
Persons qualify for Medicaid if they have limited income and resources and
meet other eligibility requirements. For a Medicare beneficiary to qualify for all
state Medicaid benefits, he or she must meet the Medicaid eligibility criteria in
that state. A common pathway into Medicaid for a Medicare beneficiary is
through his or her eligibility for the Supplemental Security Income (SSI) program
which, in most states, provides automatic Medicaid eligibility.8 SSI is a cash
welfare program providing assistance to low-income individuals. Another
common Medicaid eligibility pathway for a Medicare beneficiary is through the
“medically needy” option. Under this option, the state sets an income standard
and allows certain individuals whose income exceeds that standard to “spend
down” to the qualifying level, by deducting the amount of incurred medical
expenses from the person’s income before determining eligibility for Medicaid.
approval which describes the eligibility groups covered and the services provided.
5 For additional information, see CRS Report RS21837, Implications of the Medicare
Prescription Drug Benefit for Dual Eligibles and State Medicaid Programs, by Karen Tritz;
and CRS Report RL32902, Medicare Prescription Drug Benefit: Low-Income Provisions,
by Jennifer O’Sullivan.
6 FY2002 are the latest data available for analyzing the eligibility and services of dual
7 To be considered to have blindness or a disability under Social Security law, an individual
must meet certain functional criteria depending upon the type of disability and have
countable earnings less than $830 for a disability and $1,380 for blindness in 2005.
8 The SSI income standard is about 73% of the federal poverty level.
The majority of dual eligibles are eligible for both Medicare benefits9 and all
Medicaid benefits provided within state guidelines (including help with Medicare
premiums and cost-sharing charges). A smaller percentage of Medicare
beneficiaries are eligible only for Medicare premium and cost-sharing assistance.
Individuals who qualify for such assistance are generally those who have limited
income and resources, but do not meet the state’s Medicaid eligibility criteria.
Congress requires state Medicaid programs to cover the Medicare premiums
and/or cost-sharing for certain groups of low-income Medicare beneficiaries
(some of whom may also qualify for Medicaid). States also have the option of
covering the Medicare premiums of other Medicaid beneficiaries.
These five groups are introduced below to provide context for the remaining
discussion, but are described in more detail later in this report.
!Qualified Medicare Beneficiary (QMB) program includes
individuals who have Part A Medicare benefits and whose income
does not exceed 100% of the federal poverty level (FPL).
!Specified Low-Income Medicare Beneficiary (SLMB) program
includes individuals who would otherwise be QMBs but whose
income is more than 100% but less than 120% of FPL.
!The Qualifying Individual (QI-1) program covers persons who
meet the other criteria but whose income is less than 135% of
!Qualified Working Disabled program (QDWI) includes persons
who were entitled to Medicare, but lost that entitlement because
of earnings from work and whose income is below 200% of FPL;
!Traditional Medicare Buy-In covers persons who are eligible for
Medicaid but are not eligible for any one of the previously
described groups. The state has the option of paying the Medicare
Part B premiums for these individuals.
Demographic Information on Dual Eligibles
In FY2002, more than 98% of dual eligibles qualified for Medicaid through
the eligibility pathways of elderly, blindness or disability (6.5 million
individuals).10 About 1.3% were persons who qualify under other Medicaid
eligibility pathways such as children and non-disabled adults (about 88,000
9 Medicare benefits are separated into Part A and Part B. Part A covers inpatient hospital
services, up to 100 days of post-acute care in a skilled nursing facility following a hospital
stay, some home health services, and hospice services. Part B covers services such as
physicians, outpatient hospital, laboratory, durable medical equipment and some home
10 Includes dual eligibles who qualified for full Medicaid benefits and those who qualified
just for assistance with Medicare premiums and cost-sharing.
In FY2002, 92% of all elderly Medicaid beneficiaries were dually eligible
(3.6 million individuals), and 39% of Medicaid beneficiaries who were blind or
had a disability were dually eligible (2.9 million individuals). Some Medicaid
beneficiaries with disabilities do not qualify for Medicare because they do not
have a sufficient work history in which they paid Medicare taxes or do not qualify
under a parent’s or spouse’s earnings record. Many of these individuals include
persons with mental retardation and/or developmental disability.
Compared to non-dually eligible Medicare beneficiaries, dually eligible
individuals were more likely to be female, in a minority group, have less
education, and have more and higher levels of functional limitations than the
average Medicare beneficiary (see Table 1).11 Some of these demographic
differences have implications for the types and amounts of services needed by
dual eligibles and the strategies for outreach and beneficiary education compared
to other Medicare beneficiaries. For example, a lower level of formal education in
this group may mean that beneficiary education materials should be targeted to a
certain reading level.
Table 1. Comparison of Dual Eligible to Non-Dual Eligible
Medicare Beneficiaries by Key Demographic Factors, 2002
Dually eligible beneficiariesNon-dually eligible Medicare
(percent of beneficiaries)beneficiaries (percent of beneficiaries)
Female 64% 55%
Male 36% 45%
White 57% 84%
Black 22% 7%
Hisp anic 13% 6%
Othe r 8 % 3 %
Years of schooling
9-12 years (no diploma)24%15%
High school graduate23%32%
Voc/T ech 3% 7%
None 24% 55%
11 A report by the Medicare Payment Advisory Commission (MEDPAC) also found that
38% of dual eligible beneficiaries had a cognitive or mental impairment. This could include
a variety of conditions including mental retardation, mental illness, dementia, etc.
MEDPAC, Report to the Congress: New Approaches in Medicare, June 2004.
Dually eligible beneficiariesNon-dually eligible Medicare
(percent of beneficiaries)beneficiaries (percent of beneficiaries)
Source: Centers for Medicare and Medicaid Services, Characteristics and Perceptions of the
Medicare Population, 2002, pp. 36-39, at
[ h t t p : / / www. c m s . h h s . g o v / M C B S / C M S s r c / 2002/sec8.pdf].
a. IADLs refer to Instrumental Activities of Daily Living including managing one’s money,
shopping for groceries, doing housework, etc.
b. ADLs refer to Activities of Daily Living including eating, bathing, dressing, etc.
A disproportionate number of dual eligible beneficiaries tend to be under
age 65 or over age 85 compared to the general Medicare population (see Figure
1). Individuals under age 65 likely qualify for Medicare because they have a
disability that either they were born with or that has been acquired such as by
means of an accident.
Figure 1. Dually and Non-Dually Eligible Medicare Beneficiaries by Age, 2002
45a r i es
40f i c i
Age of Beneficiary
Dual EligibleNon-Dually Eligible
Source: Centers for Medicare and Medicaid Services, Characteristics and Perceptions of the Medicare
Population, 2002, pp. 36-39. [http://www.cms.hhs.gov/MCBS/CMSsrc/2002/sec8.pdf].
Estimates of Growth in Dual Eligible Population
In FY2002, about 6.6 million individuals were considered dual eligibles
(including those who only received assistance with Medicare premiums and/or
cost-sharing). Assuming that the proportion of dual eligibles in the total
Medicaid population remains constant, the number of dual eligibles would grow
from an estimated 8.4 million in FY2004 to 11.1 million in FY2015. This
projected growth in the number of dual eligibles would result in additional
challenges for federal and state governments because of the increased cost to
Medicaid and Medicare given the higher than average cost per person and the
increased demand for care coordination. See Table 2 below for an estimate of the
growth in the number of dual eligibles by category of Medicaid eligibility.12
12 The recent addition of the Medicare prescription drug benefit, described above, is
reflected in these estimates of the dual eligible population.
Table 2. Estimated Growth in the Number of Dual Eligibles,
FY2004-2015, by Basis of Medicaid Eligibility
Basis of Medicaid eligibility
Fiscal yearTotalAgedIndividuals withblindness orOther
disa bilit y
2004 8.4 4 .7 3.5 0 .2
2005 8.8 5 .0 3.6 0 .2
2006 9.0 5 .1 3.7 0 .2
2007 9.2 5 .3 3.8 0 .2
2008 9.5 5 .4 3.8 0 .2
2009 9.7 5 .5 3.9 0 .2
2010 9.9 5 .7 4.0 0 .2
2011 10.1 5 .8 4.1 0 .2
2012 10.4 6 .0 4.2 0 .2
2013 10.5 6 .1 4.2 0 .2
2014 10.8 6 .3 4.3 0 .2
2015 11.1 6 .5 4.4 0 .2
Sources: CRS analysis based on Congressional Budget Office, Mar. 2005 baseline projections for
total Medicaid enrollment and the Medicaid Statistical Information System, (MSIS), FY2002 data
which provides percentage of dual eligibles by basis of eligibility.
Medicaid Services for Dual Eligibles
Both Medicare and Medicaid offer comprehensive coverage for acute
medical care services. Medicare benefits are separated into Part A and Part B.
Part A covers inpatient hospital services, up to 100 days of post-acute care in a
skilled nursing facility following a hospital stay, some home health services, and
hospice services. Part B covers services such as physicians, outpatient hospital,
laboratory, durable medical equipment and some home health care. Medicaid
covers a similar array of acute care benefits. However, Medicaid covers several
additional categories of services not covered by Medicare but needed by many
elderly individuals and those with disabilities. Long-term care, including both
institutional and community-based services, is one such category of services
covered by states. Prescription drugs have also been covered by states, but will be
covered by Medicare beginning in 2006.
For individuals who are eligible for full Medicaid benefits and Medicare
benefits, Medicare is the primary payer. Medicaid benefits not available under
Medicare (e.g., long-term care services, medical transportation) are paid by
Medicaid unless there is a third-party to cover the cost. Medicaid is generally the
payer of last resort.
Within broad federal guidelines, states can design the scope and availability
of Medicaid benefits. Medicaid law requires states to provide certain services
such as hospital and physician services. Within federal guidelines, states may, at
their option, cover other services, and limit the amount, duration or scope of any
Medicaid service. For example, a state may limit Medicaid coverage of a
particular service to a certain number of hours or days or make a service available
only to those with a particular condition (e.g., individuals who need at least 10
hours of personal care per week).
Total Medicaid Expenditures for Dual Eligibles
In FY2002, Medicaid spent $91.7 billion on dual eligibles including $86.5
billion for Medicaid services and Medicare coinsurance and deductibles and $5.2
billion for Medicare premiums.13 The majority of expenditures, $59.5 billion, or
69%, were for long-term care services. The second highest category of Medicaid
spending for dual eligibles was prescription drugs at $14.9 billion, or 17%. Table
3 provides the estimated Medicaid expenditures for dual eligibles by category of
Medicaid service. (See Appendix A for state-by-state estimates.)
Nationwide 6.6 million dual eligibles received Medicaid services or
assistance with Medicare cost-sharing in FY2002.14 Table 4 provides the
estimated number of dual eligibles who had Medicaid expenditures for selected
types of services within the broad categories of acute care, long-term care,
prescription drugs and managed care. This is not a comprehensive list of all
Medicaid services but is intended to illustrate the variation among the utilization
of certain types of services. (See Appendix B for state-by-state estimates.)
There are three caveats to keep in mind about the data presented in this
section. First, the amounts shown represent Medicaid expenditures for both
Medicaid services and Medicare co-payments and deductibles. The data source15
(the Medicaid Statistical Information System, MSIS) does not permit a
breakdown of these two spending components. Amounts paid for Medicare
premiums are not included in MSIS. Second, the MSIS data on dual eligibles has
some substantial limitations and is not always consistently reported by states.
These issues are discussed at the end of this report. Finally, managed care
expenditures cannot be broken down by service type. Under managed care, states
13 Expenditure data for Medicare premiums from CMS-Form 64, FY2002. Expenditure data
for Medicaid services and Medicare premiums and cost-sharing from CMS, MSIS, FY2002.
The MSIS data does not include spending for Medicare premiums. The analysis of
Medicaid spending by category of service does not include expenditures for Medicare
14 Does not include those who only received assistance with Medicare premiums.
15 The MSIS is the primary federal datasource for information on Medicaid beneficiaries.
This federal database is compiled by CMS from eligibility and claims information submitted
quarterly by the states and the District of Columbia.
pay an organization a fixed, monthly payment per enrollee to provide all the
services specified under the managed care contract. Data reported to the federal
government generally show only the fixed, monthly, per person payment amount
and do not itemize expenditures for specific types of services. This is particularly
true in states that have widespread use of managed care such as Tennessee and
Table 3. Estimated Medicaid Expenditures for Dual Eligibles by
Category of Service, FY2002
expenditures Percentage of total
Category of service(in billions)expenditures
U nkno wn $ 1 . 1 1 . 3 %
To t a l b $86.5 100%
Source: CRS analysis based on Centers for Medicare and Medicaid Services, MSIS data,
a. The amounts shown do not reflect rebates paid to states by pharmaceutical manufacturers. In
FY2002, total Medicaid drug expenditures for all beneficiaries were offset by 20% due to
b. Does not include $5.2 billion in expenditures for Medicare Part B premiums.
Table 4. Estimated Number of Dually Eligible Recipients for
Selected Service Types, FY2002
Number of MedicaidPercentage of total
Category of servicerecipients number of dual eligible
Ph ysicia n 3,942.2 60%
Intermediate care facilities for72.41%
individuals with mental
To t a l a 6,577.3 100%
Source: CRS analysis based on Centers for Medicare and Medicaid Services, MSIS data, FY2002
Note: Included in the beneficiary totals are dual eligible beneficiaries receiving a service listed
above that was funded under a home and community-based program under Section 1915(c) or
Section 1929 of the Social Security Act.
a. Includes all dual eligibles except those for which Medicaid paid Medicare premiums only.
Dually eligible individuals often rely on Medicaid for most or all of their
long-term care services and supports because Medicare provides a very limited
array of services for individuals with long-term care needs. Of all Medicaid
spending for dual eligibles, 69% was for long-term care ($59.5 billion), primarily
for nursing facilities as shown in Table 5 below. In addition, long-term care
spending for dual eligibles represented 72% of all Medicaid long-term care
spending in FY2002 ($82.5 billion). This section describes in more detail several
of the more frequently used Medicaid long-term care services for dual eligibles. If
Medicare covers a comparable benefit, the similarities and differences are
It should be noted that the number of dual eligible enrollees and the
expenditures shown in Table 5 do not include long-term care services for
Medicaid beneficiaries enrolled in a Medicaid managed care program. In these
cases, states generally report the enrollees and expenditures in the managed care
category of service.
Table 5. Estimated Number of Recipients and Spending on
Medicaid Long-Term Care Services for Dual Eligibles, FY2002
Number of dual
eligible recipientsTotal spending (in
Type of service(in thousands)billions)a
Home health services406b$1.6
Rehabilitation 222 b $1.0
Home- and community-based waiver servicesn/ac$9.3
Source: CRS analysis based on Centers for Medicare and Medicaid Services, MSIS data,
FY2002. Numbers may not total due to rounding.
a. The data do not allow for an unduplicated count of the number of individuals who received
long-term care services.
b. Includes individuals who may be receiving the service under a Medicaid home- and community-
based waiver program.
c. The FY2002 MSIS data do not allow for a reliable determination of the number of individuals
who are receiving home- and community-based waiver services.
d. Includes targeted case management ($.5 billion), inpatient mental health services ($.3 billion),
private duty nursing ($.1 billion), and prosthetics and eyeglasses ($2.3 billion). The data
do not allow for an unduplicated count of individuals who received services in the ‘Other’
Nursing Facility Services. Nursing facility services are covered by both
Medicaid and Medicare. However, the Medicare nursing facility benefit is more
narrowly defined as a post-hospitalization, short-term benefit. The Medicaid
nursing facility benefit is much broader in scope and is often used as the long-
term payer for nursing facility services. Medicare pays for approximately 9% of
all patient days in a nursing home compared to Medicaid which pays for about
65% of all days.16 Medicaid is the single largest public payer for nursing home
care. The remainder may be paid for by the individual or, to a much lesser extent,
In general, Medicare covers nursing facility services for those individuals
who need skilled services following a hospitalization of at least three days.
Medicare will pay for up to 100 days of nursing facility services per “spell of
illness.”17 Beneficiaries are not required to make co-payments for this service for
the first 20 days of care, but must pay a daily co-payment for days 21 through 100
($114 in 2005).18
Under Medicaid, states are required to offer nursing facility services to all
Medicaid beneficiaries over age 21 who require this service. As of September
2003, all states except New Mexico also covered nursing facility services for
individuals under age 21.19 There are no limits on the number of days of services
that Medicaid will cover. Medicaid requires that a beneficiary in a nursing facility
contribute all of his or her income above a minimal allowance (generally between
$30 and $60 per month) to offset the cost of his or her care, referred to as “post-
eligibility treatment of income.”20
In FY2002, Medicaid spent $34.4 billion on nursing facility services for 1.3
million dually eligible individuals (which is 20% of all dual eligibles). The
expenditures represent 40% of all Medicaid spending for dually eligibles and 88%
of all Medicaid expenditures for nursing facilities.
16 67 Federal Register 49816, July 31, 2002.
17 A spell of illness begins when a beneficiary is furnished inpatient hospital or skilled
nursing facility care and ends when the beneficiary has not been an inpatient of a hospital
or in a Medicare-covered nursing facility for 60 consecutive days. A beneficiary may have
more than one spell of illness per year.
18 See CRS Report RS21465, Medicare’s Skilled Nursing Facility Payment by Julie Stone-
Axelrad for additional information.
19 U.S. Department of Health and Human Services, Centers for Medicare and Medicaid
Services, Medicaid At-a-Glance, 2003: A Medicaid Information Source, CMS-11024-03.
(Hereafter referred to as CMS, Medicaid At-a-Glance, 2003.)
20 In the case of an individual who has a spouse who is still living in the community,
Medicaid law allows a certain level of protected income and resources for that spouse so
that he or she is not impoverished.
Intermediate Care Facilities for Individuals with Mental
Retardation. Intermediate care facilities for individuals with mental retardation21
(ICF/MR) are provided by all state Medicaid programs at their option. ICF/MR
facilities provide ongoing training, treatment and health and rehabilitative services
to individuals with mental retardation or a related condition who reside in that
facility. These facilities are also governed by federal certification regulations that
outline standards for participating facilities. These include the availability of
physicians, nurses, and other staff, the living environment, and food and nutrition
services among other requirements. Medicare does not cover a comparable
In FY2002, approximately 72,000 dually eligible beneficiaries received this
type of service. Medicaid expenditures for ICF/MR services for dual eligible
individuals totaled $6.7 billion. This amount represents 8% of all Medicaid
spending for dually eligibles and 62% of all Medicaid expenditures for ICF/MR
Personal Care Services. States also have the option of covering
personal care services under Medicaid. Personal care includes a range of human
assistance provided to individuals with a disability or chronic condition. This
assistance generally includes activities of daily living such as eating, bathing,
dressing, toileting, and transferring. Other supportive services may include light
housework, laundry, meal preparation, transportation, grocery shopping and
medication or money management.
As of September 2003, 36 states and the District of Columbia covered
Medicaid personal care services for at least some Medicaid beneficiaries. Many
states, however, limit the number of hours of personal care service (e.g., 20 hours
per week) or the setting (limited to services provided in the home).22
In FY2002, Medicaid spent $3.4 billion on personal care services for about
513,000 dually eligible individuals. This amount represents 4% of all Medicaid
expenditures for dual eligibles and 74% of Medicaid spending for personal care
Home Health. Home health services are covered by both Medicaid and
Medicare. However, the specific eligibility requirements and covered activities
differ between the two programs.
Medicare beneficiaries are eligible for home health care if they are
homebound and need intermittent skilled nursing care, physical therapy, or
speech/language pathology services. For beneficiaries receiving at least one of
these services, Medicare also covers occupational therapy and the services of
home health aides and medical social workers. Beneficiaries may continue to
receive occupational therapy after they no longer need other skilled nursing care
21 States are not required to provide ICF/MR services, but it is one of the optional services
that state Medicaid programs can choose to cover.
or therapies and may receive home health aide or social worker services as long as
they receive occupational therapy.
Under Medicaid, states are required to provide home health services to
individuals who are entitled to nursing facility services. For other individuals,
coverage of home health services is optional. Like Medicare, home health
services are provided in the individual’s place of residence and include
intermittent nursing services, home health aides, and medical supplies and
appliances for use in the home. States may also provide therapies as part of the
home health benefit (e.g., physical therapy, speech and language therapy). Unlike
Medicare, individuals are not required to be homebound to receive home health
services. Several states limit the availability of home health services to a certain
number of visits or require beneficiaries to make nominal co-payments.
In FY2002, Medicaid spent $1.6 billion on home health services for
approximately 406,000 dually eligible individuals (which is 6% of all dual
eligibles). The expenditures represent 2% of all Medicaid spending for dual
eligibles and 44% of all Medicaid expenditures for home health services.
Rehabilitation. Rehabilitation services under Medicaid may include any
medical or remedial services recommended by a physician or other licensed
practitioner within the scope of his/her practice under state law for maximum
reduction of physical or mental disability and restoration of a recipient to his/her
best possible functional level. The definition for Medicaid rehabilitation service
is broad and may cover various Medicaid groups (i.e., elderly, individuals with
disabilities, adults, and children). Many states used this service to provide mental
health services to Medicaid beneficiaries; as of September 2003, 45 states have
used this benefit to provide mental health rehabilitation or stabilization to certain23
In FY2002, Medicaid spent $1.0 billion on rehabilitation services for about
222,000 dually eligible individuals. This amount represents 1% of all Medicaid
expenditures for dual eligibles and 20% of Medicaid spending for rehabilitation
Home- and Community-Based Waivers. States also have the option
of requesting permission from the Secretary of HHS to provide home- and
community-based services for individuals who would otherwise require the level
of care provided in a nursing home, hospital or ICF/MR. This option is referred
to as a “Home- and Community-Based (HCBS) waiver” and is authorized under
Section 1915(c) of the Social Security Act. The HCBS waiver allows states to
limit the number of individuals served and to offer the services on a less-than-
statewide basis. In 2003, there were 275 such waivers in operation in all states
except Arizona.24 These waivers may include a broad range of services such as
case management services, homemaker/home health aide services, personal care
23 CMS, Medicaid At-A-Glance, 2003.
24 Arizona offers similar long-term care services under a Section 1115 research and
services, adult day health services, habilitation services, respite care, home
modifications, and home-delivered meals.25
In FY2002, Medicaid spent about $9.3 billion for dual eligibles on those
home- and community-based waiver services.26 This amount represents 11% of
spending for dual eligibles and 60% of Medicaid spending for home- and
Prescription Drugs and Changes Resulting from the
Addition of a Medicare Drug Benefit
After long-term care, the second largest category of Medicaid expenditures
for dual eligibles is prescription drugs. As of March 2005, all 50 states and the
District of Columbia, at their option, covered prescription drugs for at least some
Medicaid beneficiaries. State Medicaid programs are also permitted to impose
nominal cost-sharing on non-institutionalized Medicaid beneficiaries. As of
March 2005, 40 states and the District of Columbia imposed cost-sharing charges27
for Medicaid beneficiaries who received prescription drugs. Generally, cost
sharing ranged from $.50 to $3.00 per prescription.
In FY2002, Medicaid paid for prescription drugs for 82% of dually eligible
recipients totaling $14.9 billion. This represents 17% of spending for dual
25 Adult day health services refers to a type of service that provides assistance to multiple
individuals with a disability in a group setting that generally operates during the daytime
hours. Generally, the individuals who receive services in this type of setting have a severe
cognitive or physical disability. Habilitation services means those services designed to
assist individuals in acquiring, retaining, and improving the self-help, socialization, and
adaptive skills necessary to reside successfully in home- and community-based settings.
Respite services provide temporary services to an individual with a disability to give the
normal caregiver a break from providing care. Home modifications refer to items such as
a ramp to a home, or bars installed in the shower that the individual can hold onto while
26 A small portion of this spending is for the home- and community-based program for the
functional disabled and elderly authorized under Section 1929 of the Social Security Act.
Only Texas offers this type of program; in FY2002, Medicaid expenditures for Texas’
program were approximately $198,000.
eligibles and 52% of all Medicaid spending on prescription drugs. This total does
not include discounts from rebates on Medicaid prescription drugs.28, 29
As mentioned earlier, the Medicare drug benefit creates significant changes
for individuals who are dual eligibles and those who receive assistance with
Medicare cost-sharing. Starting in 2004, certain Medicare beneficiaries received
discounts on the drugs they purchased through a HHS-endorsed, privately-
sponsored drug discount card. Dual eligible beneficiaries who receive Medicaid
prescription drug benefits were ineligible for the drug discount card, their
prescription drugs continued to be covered by Medicaid with little or no cost-
sharing. However, individuals who only receive assistance with Medicare
premiums and cost-sharing were eligible to receive the discount card and could
receive up to $600 in both 2004 and 2005 to purchase prescription drugs.
Starting in 2006 dual eligible individuals will no longer receive their
prescription drug benefits through Medicaid. They will be required to enroll in
the new Medicare Part D prescription drug benefit to receive coverage.
Individuals will be required to enroll in a private drug plan in their geographic
region that has received approval from HHS to offer the Part D benefit. This new
prescription drug benefit, enacted under the Medicare Prescription Drug,
Improvement and Modernization Act (MMA), will have some significant changes
for the scope of coverage and cost-sharing requirements for dual eligibles. It also
has some important implications for state Medicaid programs.
Changes to the Scope of the Prescription Drug Benefit. Medicaid
currently covers a broad range of prescription drugs. States may create lists of
preferred drugs or require advance (prior) approval for non-preferred drugs, but
statutory requirements insure that Medicaid covers a comprehensive list of drugs.
Most states limit coverage of prescription drugs through the quantity of the
prescription that can be filled at one time (e.g., 30-day supply), the number of
refills, or the number of prescriptions within a given time period.
MMA defines covered drugs as those drugs also covered by Medicaid —
with a few exceptions. However, the private drug plans that will provide the
Medicare Part D benefit will be permitted to establish a formulary as long as it
includes drugs within each therapeutic category and class of covered Part D drugs.
A drug plan does not have to cover all drugs within a category or class. The drug
28 Medicaid law requires drug manufacturers that wish to have their drugs available for
Medicaid enrollees to enter into rebate agreements with the Secretary of HHS, on behalf of
the states. Under these agreements, manufacturers must provide state Medicaid programs
with rebates on prescription drugs used by Medicaid beneficiaries and paid for by Medicaid.
In exchange, states are required to cover all drugs offered by those manufacturers. In
addition, a few states have negotiated supplemental rebates in addition to the federal
agreements. In FY2002, drug rebates negotiated by federal and state officials reduced
Medicaid drug expenditures by 20%.
29 For additional information, see CRS Report RL30726, Prescription Drug Coverage Under
Medicaid by Jean Hearne, and Pharmaceutical Benefits Under State Medical Assistance
Programs by the National Pharmaceutical Council.
plan can use the list of therapeutic categories and classes developed by United
States Pharmacopeia,30 or can propose to CMS an alternative therapeutic
categorization. CMS must review and approve the formularies of the private drug
plans and is to be reviewing the extent to which the formularies provide adequate
coverage for drugs that are used to treat particular diagnoses such as HIV/AIDS
and mental illness. In June 2005, CMS indicated that it is requiring coverage of
all or substantially all of the drugs in the antidepressant, antipsychotic,
anticonvulsant, anticancer, immunosuppressant and HIV/AIDS categories.
If a state wishes to cover other drugs in a therapeutic class or category
included under MMA, the state may not use Medicaid funding. This differs from
other benefits covered by both Medicaid and Medicare in which Medicaid can
supplement Medicare coverage.
From the individual’s perspective, it is likely that the scope of benefits will
change, but the extent of the change and the process for beneficiaries are unknown
at this time. It is unclear if all drug plans will implement formularies or what the
scope of the formularies will be. Unlike the Medicaid program, MMA will not
limit the number of prescriptions an individual can receive, but an individual may
have access to only certain drugs on a drug plan’s formulary. For example, a drug
plan formulary may cover a cholesterol drug that differs from the one an
individual is currently using; in this case, he or she may have to change
prescriptions. MMA will give individuals grievance and appeal rights to access a
particular drug not covered by the formulary.31
Changes to Premiums and Cost-Sharing Requirements for
Prescription Drugs. Currently, most dual eligibles do not pay a premium to
enroll in Medicaid, but they may have nominal co-payment requirements for the32
services they use. To enroll in the Medicare drug benefit, most persons will
have to pay drug plans a premium for coverage and cost-sharing amounts when
they use benefits. MMA, however, establishes special rules for low-income
individuals. All dual eligibles will qualify for low-income subsidies for premiums
and co-payments. Full benefit dual eligibles are entitled to a premium subsidy
equal to the weighted average premium of all drug plans in the region, or if
greater, the lowest premium for a plan in the region. If a dual eligible chooses a
drug plan with a higher premium than the amount of the subsidy, he or she will be
required to pay the difference.
Under MMA, cost-sharing requirements differ for dual eligibles depending
upon whether or not the individual resides in an institution such as a nursing
30 Section 1860D-4(b)(3)(C) of the Social Security Act as added by P.L. 108-173.
31 To appeal coverage of a drug not on the formulary, the individual’s prescribing physician
must determine that all covered drugs on the formulary would not be as effective for the
individual as the non-covered drug or would have adverse effects for the individual.
32 A few Medicaid eligibility groups for working individuals with a disability permit states
to charge premiums for enrollment.
facility. Individuals who reside in an institution have no additional cost-sharing
obligations under MMA (e.g., deductible, co-payment for drugs).33
For dual eligibles who do not reside in an institution, the amount that they
pay for prescription drugs may change. Currently, state Medicaid programs are
permitted to impose nominal cost-sharing on non-institutionalized Medicaid
beneficiaries, as discussed above. Under MMA, the prescription drug benefit
permits drug plans to charge non-institutionalized dual eligibles (among others)
co-payments for prescription drugs.
!Dual eligibles whose income (as calculated by the Supplemental
Security Income (SSI) program) is less than 100% of the FPL can
be charged up to $1 for a generic drug or a preferred drug that is
considered a “multiple source”34 drug and $3 for any other drug.
This co-payment amount will be adjusted annually, beginning in
!For dual eligibles whose income is higher than 100% FPL, their
co-payments will be $2 for a generic drug or a preferred drug that
is considered a “multiple source” drug and $5 for any other drug.
These co-payment amounts will be increased annually, beginning
in 2007, based on the percentage increase in per capita
expenditures for the Medicare Part D benefit.
No co-payments apply after a beneficiary has total drug costs of $5,100 in
2006; this amount is also increased in subsequent years by the increase in
Medicare per capita drug spending. At this writing, it is unclear how cost-sharing
requirements will change for the average dual eligible beneficiary. Any changes
may be magnified over time as the cost-sharing amounts are increased each year.
Phase-Down State Contribution. States are responsible for a portion
of the funding for the new Medicare prescription drug benefit under a provision
called the “phase-down state contribution,” often referred to as the “clawback.”35
The funding level for each state is a function of the number of persons eligible for
both full Medicaid benefits in the state and the Medicare drug benefit (the “dual
eligibles”); the state spending on prescription drugs for dual eligibles in 2003; the
state share of Medicaid funding; inflation (for prescription drugs); and a
statutorily determined annual factor. The annual factor is designed to provide a
partial shifting of prescription drug spending on dual eligibles from the states to
the federal government over time; the factor is 90% for 2006 and gradually
declines to 75% for years after 2014.
33 Medicaid beneficiaries residing in institutions are required to contribute most of their
income to the cost of their care (referred to as “post-eligibility treatment of income”). MMA
does not change this requirement.
34 A “multiple source drug” is a drug for which there are two or more approved,
therapeutically equivalent drug products also on the market. See Section 1927(k)(7)(A)(i)
of the Social Security Act.
35 States will also be responsible for covering a share of the cost of the eligibility
determinations for the low-income subsidy under Medicare Part D.
Although the program rules for covering prescription drugs for dual
eligibles under the Medicare program have been outlined through legislation,
regulation and policy guidance from CMS, questions remain about which drug
plans will participate, what types of drugs will be included in the formularies, and
how this will impact dual eligible beneficiaries.
Cost of Providing Services to Dual Eligibles
As mentioned earlier, dual eligible individuals account for a
disproportionate share of Medicaid and Medicare expenditures compared to other
groups of individuals enrolled in these programs. In 2002, dual eligibles
represented 13% of Medicaid beneficiaries, but accounted for about 41% of
Medicaid expenditures ($86.5 billion).36 In Medicare, based on 2001 data (the
most recent available), dual eligibles account for 15% to 17% of Medicare
beneficiaries and 22% to 26% of Medicare spending (depending on the method37
used to determine dual eligibility). Based on the percentages above and
assuming total Medicare expenditures of $212 billion in FY2001,38 Medicare
spending for dual eligibles was estimated to be $47 to $55 billion.
The Congressional Budget Office (CBO) projects that under current law
federal expenditures for Medicaid will grow at 7% per year from FY2004 through39
FY2015, and Medicare will grow at 8% per year from FY2005 through FY2015.
Facing significant growth in the total program costs of Medicaid and Medicare
and the high cost of dual eligibles, some state and federal policymakers explored
policy options that would, for example, change the way services are delivered for
From a state perspective, rapidly increasing Medicaid spending has strained
state budgets since states are required to match federal Medicaid dollars (on
average, 43% of total expenditures). Many states faced significant budget
shortfalls particularly from 2001 through 2004, and still view Medicaid’s
expenditure growth as unsustainable. In most states, the law prohibits the state
from having a budget deficit — in which the state spends more than it receives in
revenue. State Medicaid expenditures (excluding federal matching funds)
36 CRS analysis of CMS, Medicaid Statistical Information Systems (MSIS), FY2002.
37 MEDPAC, A Data Book: Healthcare Spending and the Medicare Program, June 2004,
[ ht t p: / / www.me dpac.gov/ publ i cat i ons/ c ongr e ssi onal _r e por t s / J un04Dat abookSec2.pdf ] .
39 CRS calculations from the Congressional Budget Office, March 2005 Baseline for
Medicaid and Medicare.
accounted for 12.6% of all state spending in state fiscal year (SFY) 2003.40 To
address budget shortfalls, many states have cut Medicaid eligibility and/or
services, raised beneficiary cost-sharing, or reduced provider payment rates.
In the past, some state governors have proposed that the federal government
assume all the costs of providing services to dual eligibles. In a 2003 letter to the
Senate Finance Committee, the governors argued that (1) providing services and
supports that target Americans age 65 and older is generally a federal
responsibility while states generally serve low-income non-elderly and working
individuals; (2) the quality of services would improve because one program would
be responsible for integrating and coordinating acute care and long-term care
services; and (3) the states no longer have the capacity to fund both education and
health care.41,42 Congress has not considered this type of proposal, and the
Medicare prescription drug legislation (P.L. 108-173), discussed earlier, has
reinforced states’ financial commitment to pay for health care services for dual
Coordinating or Integrating Medicaid
and Medicare Services
Issues in Care Coordination
Coordinating Medicare and Medicaid services for dual eligibles has been a
significant challenge for state and federal policy makers for three primary reasons
(1) the program administration and operations of Medicare and Medicaid are very
different from one another; (2) Medicaid and Medicare may cover similar, but
slightly different services; and (3) there are significant incentives to shift
beneficiaries’ care to Medicaid or Medicare even if this does not result in the
highest quality of care or the greatest continuity of care for an individual.
Program Administration and Operations. The Medicare and
Medicaid programs have a very different history and purpose which affect the
program interaction and the coordination of services. The programs are operated
by different levels of government and have different payment structures, service
definitions, and data systems. These differences can create administrative
complexity for policymakers and providers and confusion for beneficiaries.
40 CRS Report RL31773, Medicaid and the Current State Fiscal Crisis, by Christine Scott,
updated Jan. 21, 2005.
41 This approach has been advocated by some governors for several years, and a letter to the
Senate Finance Committee outlines the rationale for this approach. Letter to Senate Finance
Committee Chairman, the Honorable Charles E. Grassley and Ranking Member, Honorable
Max Baucus, from the Chairman (Governor Paul E. Patton) and Vice-Chairman (Governor
Dirk Kempthorne) of the National Governors Association, June 5, 2003.
42 There are both examples of federal programs that serve the low-income non-elderly and
working individuals (such as the Temporary Assistance for Needy Families (TANF)
program), and state programs that serve individuals age 65 and older (such as state pharmacy
assistance (SPAP) programs). The letter also does not discuss individuals with disabilities.
Medicare is a federally-funded health care program in which the benefits
provided are primarily acute care and skilled care services, and benefits are
uniform nationwide. Medicare is operated by CMS which establishes program
guidelines and contracts with intermediaries and carriers who handle day-to-day
operations for Medicare within a specific geographic area.43 Using the federal
guidelines, these intermediaries and carriers pay Medicare claims, interpret CMS
policy about what services are covered, and interact with Medicare providers.
The Medicaid program, on the other hand, varies widely by state, and
provides a wide array of both health and supportive services (particularly in the
area of long-term care). Medicaid is funded through a combination of federal and
state funding, and states administer the program and set Medicaid policy within
broad federal guidelines established by CMS. In addition, many states have split
up the administration of Medicaid among different state agencies. For example,
there may be separate state agencies for determining Medicaid eligibility,
administering the general acute care program and administering Medicaid long-
term care services.
Coverage of Similar Services. As mentioned earlier, Medicare and
Medicaid cover several of the same services or related services. However, these
services may differ in the scope of coverage or the eligibility requirements which
can be confusing for policymakers, providers and beneficiaries to navigate. For
example, providers may have difficulty knowing whether to bill Medicaid or
Medicare for a particular service.
For example, to be eligible for Medicare home health services, beneficiaries
must be homebound and require intermittent skilled nursing care, physical
therapy, or speech/language pathology. If a beneficiary meets these criteria,
Medicare will also cover occupational therapy and the services of home health
aides and medical social workers. Federal Medicare guidelines determine the
payment rate for home health providers. Medicaid’s home health coverage rules
are similar to Medicare, but do not include the homebound requirement.
Shifting Costs. There are also incentives and opportunities for providers
and states to shift costs from Medicaid to Medicare and vice versa. For example,
if a dual eligible, who is residing in a nursing facility that Medicaid pays for, has a
condition that worsens and he or she needs additional care, the nursing home may
have a financial incentive to transfer that individual to a hospital even if the
nursing home could meet the individual’s needs. If the nursing home transfers the
individual to the hospital, the nursing home would not be responsible for the cost
of the individual’s care while the individual was in the hospital, and the hospital
stay and the post-hospital nursing facility stay would be paid for by Medicare.
43 CMS contracts with intermediaries to administer certain Medicare Part A services such
as inpatient hospitals and with carriers to administer Medicare Part B services such as
physician services. Recent Medicare legislation (P.L. 108-173) simplified the contracting
process for selecting Medicare intermediaries and carriers. Under the new law, the
Secretary is able to competitively contract with any entity to serve as a Medicare contractor
and the distinction between intermediaries and carriers has been removed.
Strategies to Coordinate or Integrate Services
Several state and federal initiatives have tried to address the challenges of
coordinating care. These initiatives have generally included (1) developing a
formal structure or service that coordinates the two programs such as care
coordination; (2) integrating Medicaid and Medicare into one delivery system
through managed care; or (3) a combination of the two approaches. The purpose
of these efforts is to reduce the fragmentation and duplication of services and
increase the quality of services delivered to dual eligibles.44
Care Coordination. Care coordination can be defined broadly as a
service provided to a beneficiary in which an individual other than the service
provider has responsibility for beneficiaries’ health care services. For example,
care coordinators may have responsibility for prior authorization of services,
communications with Medicare and Medicaid service providers, beneficiary
education in managing a chronic condition, or reviewing service utilization to
identify duplication or inefficiencies.
Depending upon the type of program, the care coordinator may have
different levels of interaction with Medicare providers. Some states have
developed care coordination programs that focus on dually eligible individuals
and work with Medicare providers. One example is the Vermont Independence
Project in which case managers (funded by Medicaid) are co-located at the offices
of primary care physicians to specifically assist with care coordination for dually
Care coordination differs from managed care described below in that
providers of care coordination are not financially responsible for the services used
by dually eligible individuals, but may receive bonus payments for meeting45
benchmarks such as a reduction in utilization. Care coordination may be more
difficult in a fee-for-service setting than in managed care, because there is no
direct responsibility for the actual services used.
Managed Care. As described previously in this report, most dual
eligibles are not enrolled in managed care (about 3% are enrolled in a Medicare
HMO, and 13% are in a comprehensive Medicaid managed care program).
Although there are significant and pervasive coordination challenges for most
44 The Robert Wood Johnson Foundation has established the Medicare/Medicaid Integration
Project which provides grants and technical assistance to states to assist them in
restructuring the way they finance and deliver acute and long-term care for dual eligibles.
For additional information and a description of state programs see
45 S. Bratesman and P. Saucier, Applying Managed Fee-for-Service Delivery Models to
Improve Care for Dually Eligible Beneficiaries: A Technical Assistance Paper of the Robert
Wood Johnson Foundation Medicare/Medicaid Integration Program, May 2002, Muskie
School of Public Services, University of Southern Maine.
dual eligibles enrolled in managed care,46 a few programs have developed
managed care models specifically to enhance coordination and integration of
services for dual eligibles.
Depending on the program’s goals and structure, most managed care
programs require some form of federal approval from Medicaid and/or Medicare
under one of several possible program authorities. A full discussion of each of
these managed care authorities is outside the scope of this report.47 A brief
discussion, however, is provided here to outline program options and the
accompanying decisions as it relates to managed care for dual eligibles.
Under Medicaid, managed care programs are available using the following
!Pre-paid health plans: These are generally used if a state wants
to include only a few services in a managed care arrangement.
Enrollment in the program must be voluntary.
!Section 1932 of the Social Security Act: A managed care option
in the Medicaid state plan; it does not require a waiver. States
may not use this option to require dually eligible individual(s) to
enroll in managed care. States may use this option to offer
voluntary managed care enrollment.
!Section 1915(b) waiver: This waiver allows states to require that
dually eligible individuals enroll in a managed care program to
receive their services. The waiver must be cost-effective48 over a
!Section 1115 waiver: This waiver authority is very broad. In this
context, it allows states to expand Medicaid eligibility, and
require dually eligible individuals to enroll in managed care to
receive services. The waiver must be budget neutral over five
!Program of All-Inclusive Care for the Elderly (PACE) program:
The Medicaid component is authorized under Section 1934 of the
Social Security Act and is a Medicaid state plan option. This does
not require a waiver. This program is described in more detail
46 The Medicare and Medicaid data systems are not integrated, which delays access to
current eligibility and enrollment information, and beneficiaries have little access to
information about how their benefits are affected by their dual eligible status. See E. Walsh,
et al., Case Studies of Managed Care Arrangements for Dually Eligible Beneficiaries, RTI
International, CMS Contract No. CMS-500-95-0048, Sept. 26, 2003 for additional
47 For additional information see CRS Report RL30813, Federal and State Efforts to
Integrate Acute and Long-Term Care: Issues & Profiles, by Edward Miller, Jan. 22. 2001.
48 To be cost-effective, the waiver must not cost the Medicaid program more than it would
have cost without the waiver.
Under Medicare, managed care programs are available using the following
!Medicare Advantage: In general, the program makes monthly
payments in advance to participating private health plans for each
enrolled Medicare beneficiary in a payment area (typically a
county). In exchange, the plans agree to furnish all Medicare-
covered items and services to each enrollee. Generally, Medicare
Advantage plans have been unable to limit enrollment to only
certain types of Medicare beneficiaries (such as dually eligible
!PACE: The Medicare component of PACE is authorized under
Section 1894 of the Social Security Act and is specifically focused
on dual eligibles. A more complete description of the PACE
program is provided below.
!Section 222 waiver: 50 This demonstration waiver allows
agencies and organizations to develop projects that evaluate
changes in methods of payment or reimbursement. A
demonstration project under this authority could enroll only dually
eligible individuals; however, dual eligibles cannot be required to
enroll in managed care. The waiver must be budget neutral, and
generally will require a lengthy federal review process.
!Special Needs Medicare Managed Care Plans: The 108th
Congress established a new type of Medicare managed care plan
under Section 231 of the Medicare Prescription Drug,
Improvement and Modernization Act (MMA, P.L. 108-173). This
new type of managed care may replace the need for a Section 222
waiver to develop managed care programs for dual eligibles.
Congress is permitting Medicare managed care plans to limit
enrollment to certain groups of Medicare beneficiaries with
special needs including dual eligibles.
Managed care approaches to improve coordination and services for dual
eligibles have taken a variety of forms. Some states have chosen to require
Medicaid managed care programs to coordinate with Medicare (“a partially
integrated model”). Other programs have combined Medicare and Medicaid
services into a single delivery system where one agency can manage all aspects of
service delivery to provide the most efficient and highest quality services (“a fully
A partially integrated managed care model for dual eligibles is one in which
a Medicaid managed care program has specific responsibilities for coordinating
49 Although non-dual eligibles were not prohibited from enrolling, some Medicare managed
care plans created disincentives for non-dual eligibles to enroll, for example, charging a
monthly premium to enrollees and providing no additional Medicare benefits. Dual eligibles
were also charged a premium, but the Medicaid program would cover the cost of that
50 Refers to Section 222 of P.L. 92-603.
with Medicare even though the two programs are still operating separately.
Several states have implemented these types of managed care programs. For
example, Arizona’s program operates under the authority of a Medicaid Section
1115 waiver which provides all Medicaid services through private managed care
plans. These managed care plans are responsible for coordinating with Medicare
services offered under either Medicare fee-for-service or a Medicare managed care
Other programs have tried to fully integrate all Medicaid and Medicare
benefits into one service delivery system (both acute and long-term care services).
Some of the challenges in developing these types of programs include reconciling
the different administrative structures, different providers and trying to make the
delivery of Medicare and Medicaid services more coherent. Because of the
different rules and regulations in Medicaid and Medicare and the federal waivers
required, many of these programs have taken a significant investment of time by
states and providers.
One example is the Program of All-Inclusive Care for the Elderly (PACE).
The PACE program provides all Medicare and Medicaid services through a
treatment team that is located at a day health center. The PACE project started as
a demonstration project in the mid-1980s. In 1997, the Balanced Budget Act
established PACE as a permanent model within Medicare and as a state option
under the Medicaid state plan. A PACE provider must be a not-for-profit agency
and have an agreement with both the state Medicaid agency and the Secretary of
Several state Medicaid programs have also developed other fully integrated
programs such as the Minnesota Senior Health Options program and the
Wisconsin Partnership Program. Both Minnesota’s and Wisconsin’s programs
provide all Medicare and Medicaid primary, acute and long-term care services
under a managed care model.
Individuals Who Receive Assistance with Medicare
Premiums and Cost-Sharing
Dual eligibles can be eligible for all Medicaid benefits that the state
provides (as described earlier in this report) and/or eligible for assistance with
Medicare premiums and/or cost-sharing. This section describes in more detail the
five groups that can qualify for assistance with Medicare premiums or cost-
sharing from Medicaid.
Medicare beneficiaries (including dual eligibles) are required to pay a
portion of the cost of their Medicare services through premiums and cost-sharing
charges, as described in Table 6. Such charges could pose a potential hardship
51 For additional information see the National PACE Association web site at
for some persons, especially those who do not have supplementary protection
either through an individually purchased “Medigap” policy or employer-based
Table 6. An Overview of Medicare Premiums and Cost-Sharing
Type of Medicare premiums and cost-Amount
sha r ing
Medicare Part AGenerally $0. A limited number of persons
without sufficient work in covered employment
(or whose spouse has not worked in covered
employment) pay a monthly premium of $206 or
$375 per month.
Medicare Part B$938.40 per year ($78.20/month)
Medicare Part A$912 per benefit period
Medicare Part B$110 per year
Co insura nce
1-60 day$0 per day
61-90 day$228 per day
91-150 day$456 per day
Skilled nursing facility
1-20 day$0 per day
21-100 day$114 per day
Medicare Part B ServicesVaries by type of service.
Sources: CMS, Medicare and You Handbook, 2005 and HHS press release, Sept 3, 2004, at
[ h t t p : / / www. h h s . g o v / n e ws / p r e s s / 2004pres/20040903a.html].
Since the inception of the Medicaid program in 1965, states have had the
option of paying for the Medicare Part B premium for Medicaid beneficiaries
(referred to in this report as the “traditional Medicare buy-in”). In 1986, Congress
also permitted state Medicaid programs to pay the Medicare cost sharing charges
for individuals who were not otherwise eligible for Medicaid and whose incomes
were up to 100% of the FPL.
On several occasions since 1988, Congress has required state Medicaid
programs to cover Medicare premiums and cost-sharing for four groups of low-
income Medicare beneficiaries. In addition, states continue to have the option of
paying the Medicare premiums of other Medicaid beneficiaries.
For most of these groups, the federal and state government share the cost of
the Medicare premiums, deductibles, and coinsurance based on the federal
medical assistance percentage rate (FMAP).52 On average the federal government
pays 57% of total expenditures. The federal share, which ranges from 50% to
Each of the groups that qualify for Medicare premiums and cost-sharing
assistance are discussed below.
Qualified Medicare Beneficiaries (QMB). In 1988, Congress
established the Qualified Medicare Beneficiary (QMB) program (Section 301 of53
the Medicare Catastrophic Coverage Act). This bill removed the earlier criteria
of the 1986 provision that the individual could not be otherwise eligible for full
Medicaid benefits and required states to cover these low-income individuals.
Qualified Medicare Beneficiaries are individuals who are elderly or who
have a disability, are entitled to Medicare Part A Hospital Insurance coverage and
have incomes at or below 100% of the FPL ($818 a month for an individual and
$1,090 for a couple in 2005).54 Beneficiaries’ assets may not exceed $4,000 for an
individual and $6,000 for a couple; although, states may apply Section 1902(r)(2)
of the Social Security Act to disregard additional assets, as described later in this
section. Included in QMBs is the relatively small group of aged individuals who
are not automatically entitled to Part A coverage, but who have bought Part A55
protection by paying a monthly premium.
Under the QMB group, Medicaid covers the costs of Medicare premiums,
deductibles, and coinsurance for Medicare-covered benefits. States may charge
QMBs’ nominal co-payments for Medicare services provided that they are the
same charges applied to other Medicaid beneficiaries for comparable services.
CMS refers to individuals who qualify for both Medicare premiums and
cost-sharing assistance under QMB and who qualify for full Medicaid benefits as
“QMB-Plus.” Individuals who only qualify for Medicare premiums and cost-
sharing assistance are referred to as “QMB-only.”
Specified, Low-income Medicare Beneficiary (SLMB). In 1990,
Congress required states to cover Medicare Part B premiums for additional low-
income Medicare beneficiaries beginning in January 1993, (Section 4501(b) of
OBRA 1990, P.L. 101-508). To be eligible under the SLMB pathway, a Medicare
52 If a state chooses to pay the Part B premiums of certain Medicaid beneficiaries whose
income is above levels that qualify them for premiums and cost-sharing assistance (certain
institutionalized or medically needy persons) which is not required by federal law, the state
must use 100% state funds. For the group of individuals categorized as Qualifying
Individuals the federal government pays 100% of the expenditures not related to
administering the program.
53 Most of this act, not including this provision, was subsequently repealed by P.L. 101-234.
54 References to 2005 income limits in this section include a $20 monthly income disregard
which is the standard disregard for the SSI program. The SSI methodology is used for
counting an individual’s income for the Medicare premiums and cost-sharing groups.
55 A QMB must also meet the general nonfinancial eligibility requirements for Medicaid
such as providing a Social Security number and proving residency.
beneficiary’s income may not exceed 120% of the FPL ($977 a month for an
individual, $1,302 for a couple in 2005) and assets cannot exceed $4,000 for an
individual and $6,000 for a couple.
CMS refers to individuals who qualify for both Medicare premium
assistance under SLMB and who qualify for full Medicaid benefits as “SLMB-
Plus.” Individuals who only qualify for Medicare premium assistance are referred
to as “SLMB-only.”
Qualified Disabled and Working Individuals (QDWIs). Congress
also required state Medicaid programs to provide some assistance with Medicare
Part A premiums for Qualified Disabled and Working Individuals (Section
QDWIs are persons who were previously entitled to Medicare on the basis of a
disability, who lost their entitlement based on earnings from work, but who
continue to have a disabling condition. These individuals are still entitled to
enroll in Medicare Part A or Part B but are responsible for the payment of
premiums unless they are low-income and receive assistance under this group.
Medicaid must pay the Medicare Part A premium for individuals whose
monthly income is below 200% of FPL ($3,275 a month for an individual and
$4,363 for a couple in 2005),56 whose resources are below $4,000 for an
individual and $6,000 for a couple, and who are not otherwise eligible for
If the individual has income from 150% to 200% of the FPL, the state may
charge the individual a premium according to a sliding scale. The scale “must be
based on percentages increasing from 0% to 100%, in reasonable increments, as57
the individual’s income increases from 150% to 200% of the FPL.” The state
may terminate the eligibility of a QDWI for nonpayment of the premium.
Qualifying Individual-1 (QIs). The Balanced Budget Act of 1997
(BBA97) added another mandatory eligibility group of low-income Medicare
beneficiaries who receive assistance with Medicare premiums known as
“Qualifying Individuals 1 (QI-1).”58 The QI-1 group was originally set to expire
56 Includes additional earnings disregards.
57 State Medicaid Manual 3485.7.
58 A second group was also added by BBA97 referred to as “Qualifying Individuals-2 (QI-
To have been eligible as a QI-2, an individual must have been entitled to Medicare Part A
and had income of at least 135% of the FPL but less than 175% of the FPL and whose
resources were below $4,000 for an individual and $6,000 for a couple, and who was not
otherwise eligible for Medicaid. Under the QI-2 program, states were required to pay a
portion of the Medicare Part B premium consisting of a percentage of the increase in the
Medicare Part B premiums attributable to the shifting of some home health care from
Medicare Part A to Medicare Part B which occurred in 1997. The benefit was $3.91 per
month in 2002. Although the federal government covered 100% of the cost of this benefit,
in December 2002; however, Congress has subsequently extended the expiration
date, most recently in the 108th Congress, until September 30, 2005 (P.L. 108-
Individuals are eligible as a QI-1 if they are entitled to Medicare Part A and
their incomes are at least 120% of the FPL, but less than 135% ($1,097 a month
for an individual and $1,464 for a couple in 2005) whose resources are below
$4,000 for an individual and $6,000 for a couple, and who are not otherwise
eligible for Medicaid.
The Medicaid benefit for QI-1s consists of payment of the full Medicare
Part B premium. QI-1s are entitled to three months of retroactive coverage if they
were eligible during those months and the retroactive month does not fall before
January of a calendar year.
Allocation and Expenditures. To fund the QI-1 benefit, BBA97
established an annual capped allocation for each state for five years beginning in
January 1998. Due to the limited amount of funding, this program did not
establish an individual entitlement. Rather, individuals receive benefits on a first-
come, first-serve basis. A state is only required to cover the number of persons
that would bring its spending on these groups in a year up to its allocation level.
The total allocation to states for FY2005 is $400 million.
The state’s allocation is a percentage of the total federal funds available;
this percentage is calculated using the average number of Medicare beneficiaries
in that state over a three-year period who are not enrolled in Medicaid and who
fall within the income guidelines and dividing that average by the total number of
Medicare beneficiaries nationwide who are not enrolled in Medicaid and meet the59
In most other areas of Medicaid expenditures, both states and the federal
government contribute funds. However, 100% of the expenditures under the QI-1
program is covered by the federal government (from the Medicare Part B trust
fund) up to the state’s allocation level. However, similar to other areas of
Medicaid, states are required to fund 50% of the administrative costs.
Traditional Medicare Buy-In. If a Medicaid beneficiary is eligible as a
QMB or SLMB, the state is required to cover his or her Medicare premiums and
cost-sharing charges as outlined above. However, if a Medicaid beneficiary is not
eligible for either of these groups, the state has the option of paying the Medicare
this was a very unpopular benefit among states who cited the high administrative costs
relative to the size of the benefit.
59 Department of Health and Human Services, “Medicaid Program; State Allotments for
Payment of Medicare Part B Premiums for Qualifying Individuals: Federal Fiscal Year
Part B premiums under a buy-in agreement60 which has been available to states
since the inception of Medicaid in 1966. Under a buy-in agreement, states may
enroll dual eligibles in Medicare Part B and pay the premium on their behalf.
States may also elect to include payment of Part A premiums under their buy-in
All states have buy-in agreements with the federal government. It is to a
state’s advantage to purchase Part B for some individuals. Federal Medicaid rules
prohibit states from receiving the federal share of Medicaid expenditures, referred
to as “federal financial participation” (FFP), for Medicaid services that are also
covered by Medicare Part B which could have been covered under Part B had the
individual been enrolled.
States must decide which groups of Medicaid beneficiaries they want to
cover in their buy-in agreement. Certain eligibility groups must be covered if the
state has a buy-in agreement; other groups are optional to cover. The state
receives FFP for the Medicare Part B premiums for only certain Medicaid
beneficiaries under the buy-in agreement. Generally these beneficiaries include
individuals who are receiving federally-funded cash benefits or who are deemed
to be receiving these cash benefits. If the state chooses to pay the Part B premium
for other groups of individuals (e.g., certain institutionalized individuals and
medically needy), the state must use 100% state funds. In April 2004, 30 states
reported payment for Part B premiums for certain groups of individuals using
Total Number of Individuals Receiving Medicare Premium
Assistance through Medicaid. Table 7 below shows the number of
individuals who received assistance with Medicare premiums in April 2004. The
totals shown in Table 7 do not include individuals in the QDWI group who
received assistance with the Part A premium62 or those QMBs in which a state
chooses a separate payment mechanism for the Medicare Part A premiums. In
addition, the data provided is based on a single month. One would expect that an
annual count of all individuals who received premiums and cost-sharing
assistance at some point during the year would be greater than the number
reported here for a single month.
60 Section 1839 of the Social Security Act.
61 CMS, Third Party Premium Billing File, Apr. 2004.
62 CMS officials estimate that less than 50 individuals nationwide participate in the QDWI
program. This rate is not entirely surprising because very few individuals with disabilities
lose their Social Security Disability Insurance (SSDI) cash benefit as a result of earnings.
Table 7. Number of Individuals Receiving Assistance with
Medicare Premiums, April 2004
StatePart A QMBsPart B Buy-Insa
Alabama 2 ,081 162,817
Alaska 666 10,249
Arizona 842 93,236
Arkansas 2,441 85,674
California 137,276 965,821
Co lo rado 341 59,581
Co nnecticut 2,724 66,146
Delaware 305 15,605
District of Columbia84815,588
Florid a 46,221 394,181
Georgia 2 ,898 197,044
Hawaii 3,736 22,763
Idaho 504 21,805
Illinois 2 ,343 186,918
Indiana 1 ,855 103,496
Iowa 887 57,292
Kansas 618 45,663
Kentucky 2,551 124,003
Lo uisiana 4 ,014 130,286
Maine 1 5 43,363
Maryland 8,698 74,301
Massachusetts 18,475 168,330
Michigan 14,184 159,862
Minneso ta 5,976 76,435
Mississippi 4,868 131,658
Misso uri 750 102,515
Montana 377 13,581
Nebraska 0 22,971
Nevada 1,883 26,220
Ohio 5,088 192,778
Oklaho ma 3,258 71,989
Oregon 75 69,153
StatePart A QMBsPart B Buy-Insa
Pennsylvania 15,884 229,884
T ennessee 4 ,786 206,198
T exas 46,137 419,010
Utah 77 19,150
Vermont 8 7 14,954
Virginia 3,280 121,541
Washington 8,735 108,058
Wisconsin 3 ,794 79,196
Wyoming 152 7,448
To t a l b 384,263 6,222,404
Source: Centers for Medicare and Medicaid Services, Third Party Premium Billing File, Apr.
a. Part B Buy-Ins include QMBs, SLMBs, QI-1s and traditional Medicare Buy-In recipients.
b. Total does not include the five U.S. territories: American Samoa, Commonwealth of the
Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands.
Issues in Providing Assistance with Medicare
Premiums and Cost-Sharing
This section discusses issues that federal and state policymakers face in
providing Medicare premiums and cost-sharing assistance for the various groups
described above including:
!the counting of income and resources for determining eligibility
!the challenges in covering premiums and cost-sharing assistance
for dual eligibles who are enrolled in Medicare managed care;
!the intersection of differing provider payments under Medicare
and Medicaid and the amount of coinsurance Medicaid is
obligated to pay; and
!reaching persons who are eligible for, but not receiving, premiums
and cost-sharing assistance.
Use of More Liberal Methods of Counting Income and
When a state determines eligibility for assistance with Medicare premiums
and cost-sharing, it generally uses the same guidelines for counting income and
resources as are used in the SSI program.63 However, Section 1902(r)(2) of
Medicaid law allows states to establish more generous methods for counting
income and resources through additional disregards for certain Medicaid
eligibility groups. Section 1902(r)(2) can be applied to all mandatory Medicare
Savings program groups except Qualified Working Disabled Individuals (i.e.,
QMB, SLMB and QI-1).64
Table 8 below describes the extent to which states have applied additional
disregards for these groups. A few examples of additional income disregards
include a deduction for children and irregular or infrequent income. Examples of
additional resource disregards include additional amounts for burial expenses, the
value of a life insurance policy under a certain level and income producing
property. A few states disregard all resources for purposes of determining
eligibility for Medicare premiums and cost-sharing.65 States may disregard all
resources because the administrative requirements for collecting the paperwork
documenting a person’s resources may be burdensome for both the state and the
individual and may not result in a significant number of individuals becoming
ineligible for the program.
Table 8. States Using Less Restrictive Income or Resource
Methodology for Determining Eligibility for QMB and SLMB in
StateUses less restrictive methodsfor counting incomeUses less restrictive methods forcounting resources
AlabamaXX - excludes all resources.
Al a s k a X
Arizona XX- excludes all resources.
Ar ka nsa s X
Califo r ni a X X
Co lo r a d o
ConnecticutXX- excludes all resources for QI-1.
DelawareXX- excludes all resources.
63 The SSI guidelines are generally used for Medicaid eligibility pathways relating to
individuals who are elderly or have a disability. However, there are 11 states that use more
restrictive methods for counting income or resources than those used in the SSI program
(referred to as “209(b) states”). Congress has prohibited states from applying these more
restrictive standards to determine whether an individual is eligible for Medicare premiums
and cost-sharing assistance.
64 Section 1902(r)(2) does not specifically apply to individuals who receive premium
assistance through a traditional Medicare buy-in, because the traditional Medicare buy-in
is not a separate Medicaid eligibility group.
65 The 108th Congress enacted the Social Security Protection Act of 2003 (P.L. 108-203)
which includes provisions to exclude additional types of income and resources in SSI
eligibility determinations such as certain types of infrequent or irregular income and certain
interest or dividend income. These new provisions also apply to eligibility determinations
for QMB and SLMB, and QI-1 and may render a few states’ previously established
StateUses less restrictive methodsfor counting incomeUses less restrictive methods forcounting resources
District of Columbia
Flo r id a X X
Geo r gia X X
Hawa ii X
I llino is X X
Kansas X X
K e nt uc ky
Lo ui s i a n a
M a ssa c huse t t s
M i nne so t a X X
MississippiXX- excludes all resources.
M i sso ur i X
Neb r aska
Neva d a
P e nnsyl va ni a
T e nne sse e X X
Vermo nt X X
Vir ginia X
W a shi ngt o n X
W i sc o nsin
Source: National Association of State Medicaid Directors, Aged, Blind and Disabled Survey,
2001, at [http://www.nasmd.org/eligibility/introduction.asp].
Coverage of Medicare Managed Care Premiums and Cost-
The Medicare Advantage program (previously known as the Medicare +
Choice program) is a voluntary Medicare managed care program for Medicare
beneficiaries (including those who are dually eligible). Generally, dually eligible
individuals have had low enrollment in Medicare managed care. The General
Accounting Office (GAO) estimated that 3% of dual eligibles received their66
Medicare benefits through Medicare managed care.
For those dually eligible individuals who are eligible as a QMB and
enrolled in Medicare managed care, states must cover the coinsurance and
deductibles those plans charge enrollees. These are in lieu of the Medicare
coinsurance and deductibles which would be paid if the individual were not
enrolled in managed care and instead were in the traditional fee-for-service
program.67 The requirement to pay coinsurance and deductibles has been difficult
for states and Medicare managed care plans to implement because (1) most states
do not have reliable ways of knowing which dual eligibles are enrolled in a
Medicare managed care plan, and (2) many managed care plans do not have
reliable information on dual eligible status. A 1999 report found that fewer than
half of the states that have Medicare managed care plans pay dual eligible
individuals’ co-payments for services provided.68 As a result, dual eligible
beneficiaries may be inappropriately charged for co-payments that Medicaid
Amount of Medicaid Coinsurance for QMBs
State Medicaid programs frequently have payment rates that are lower than
those used by Medicare for comparable services. Federal program guidelines
permit states to limit Medicare cost-sharing for QMBs to the difference between
what Medicare has already paid the provider and the rate that Medicaid would
have paid for that service. For example, if the recognized payment amount for a
Medicare physician visit is $100, Medicare would reimburse the provider 80% of
the amount of that Part B service ($80). If the state’s Medicaid rate for a similar
service was $85, the state would only be required to pay the Medicare provider an
additional $5. This is $15 less than the Medicare provider would receive if the
beneficiary did not receive cost-sharing assistance from Medicaid and had been
liable to the provider for the $20 coinsurance.
66 General Accounting Office (GAO), Medicare and Medicaid: Implementing State
Demonstrations for Dual Eligibles Has Proven Challenging, GAO/HEHS-00-94, Report to
U.S. Senate, Special Committee on Aging, Aug. 2000.
67 States at their option may also pay any additional enrollment premiums that may be
charged to dual eligibles for participating in the managed care plan.
68 P. Nemore, Variations in State Medicaid Buy-In Practices for Low-Income Medicare
Beneficiaries: A 1999 Update, National Senior Citizens Law Center, Dec. 1999. (Hereafter
referred to as Nemore, 1999 Buy-In Practices)
In 1997, a state survey reported that 12 states had a policy of not
reimbursing providers the full Medicare coinsurance amount.69 Several providers
sued states to try to receive the full Medicare amount. In response to these
lawsuits, Congress specified in BBA97 that states are not required to pay
Medicare cost-sharing to the extent that the payment would exceed the rate that
Medicaid would have paid. A follow-up survey in 1999 found that the number of
states that had instituted a policy reimbursing providers only what Medicaid
would have paid (less than the full Medicare coinsurance rate) had grown to 30.70
Congress was concerned that this reduction in Medicaid payments to
Medicare providers would affect Medicare beneficiaries’ access to services and
requested a review of this issue in 2000 by the HHS.71 HHS found “a statistically
significant correlation” between the reductions in states’ payments to Medicare
providers for cost-sharing and beneficiary service utilization. Specifically, the
study found that for every 10% decrease in Medicaid payment of Medicare cost-
sharing, there was a 1% reduction in the probability of a Medicare outpatient
physician visit occurring and a 3% reduction in the probability of a Medicare
outpatient mental health visit occurring. The study concluded that the impact on
utilization was “relatively small” and “the effect on health outcomes is
unknown.”72 The study did not propose a specific cause for the decrease in
Outreach for Medicare Premiums and Cost-Sharing
The final issue discussed in this section is the number of participants who
are currently receiving assistance with Medicare premiums and cost-sharing
versus the number of individuals who would be eligible for these programs.
Estimates of individuals who actually participate in QMB or SLMB compared to
the number who are eligible to participate range from 47% to 57%.73 Although
the estimated participation rate of eligibles for QMB and SLMB together is about
one-half, other studies have found significant differences in participation between
69 P. Nemore, Variations in State Buy-In Practices for Low-Income Medicare Beneficiaries,
National Senior Citizens Law Center, Nov. 1997.
70 Nemore, 1999 Buy-In Practices.
71 Section 125 of the Medicare, Medicaid and SCHIP Benefits Improvement an Protection
Act of 2000 (BIPA).
72 HHS, Report to Congress: State Payment Limitations for Medicare Cost Sharing, 2003.
73 GAO, Low-Income Medicare Beneficiaries: Further Outreach and Administrative
Simplification Could Increase Enrollment, Apr. 1999 GAO/HEHS-99-61; Actuarial
Research Corporation, Estimating the Universe of Medicare Beneficiaries Potentially
Eligible for Medicaid Buy-In, Feb. 1999; and The Barents Group LLC, A Profile of QMB-
Eligible and SLMB-Eligible Medicare Beneficiaries, Apr. 1999.
the QMB and SLMB groups. The estimated participation rate for QMBs was
A survey of states found several possible reasons for the low enrollment of
eligible QMBs and SLMBs including a lack of understanding about the programs,
language and/or cultural barriers, the physical accessibility or lack of familiarity
with the county Medicaid office where they may have to go to apply the complex
enrollment process including the documentation of income and assets, and the
welfare stigma which may be associated with applying for assistance at a county
office.75 The estate recovery provisions of some states may also deter
participation among some beneficiaries.
A study by the Barents Group found that those Medicare beneficiaries who
were more likely to seek assistance with Medicare premiums and cost-sharing
may have had greater contact with the local human service system, may be able to
access program information and enrollment assistance, or may not be deterred by
the application process or applying for the assistance at a county office.
Those who were less likely to enroll in the Medicare Savings program fell
into two categories. The first category was those who were considered “hard-to-
reach.” Individuals in this category tended to be very elderly, Hispanic-Latino
beneficiaries, and beneficiaries who used fewer services and had less contact with
the health care systems. The second group of individuals were those who had
somewhat more income and assets than the first group but still met the income
and asset guidelines for the program. These individuals tended to be married, had
relatively high levels of formal education, were homeowners, were in relatively
good health, and had private supplemental insurance.76
In 1999, CMS made a concerted effort to raise the number of eligible
Medicare beneficiaries. This was in response to the Government Performance
Review and Accountability Act (GPRA) measure to “Improve Access to Care for
Elderly and Disabled Medicare Beneficiaries Who Do Not Have Public or Private
Supplemental Insurance.” CMS established state specific goals, conducted a
series of regional seminars, developed outreach materials, awarded grants to
states, sponsored conferences, and engaged in other efforts to raise awareness of
the assistance available to low-income Medicare beneficiaries.77 The Social
Security Administration (SSA) is also required to conduct outreach mailings to
potential QMBs, SLMBs, and QI-1s. These efforts have increased participation in
the programs by a few percentage points, but the number of individuals who are
receiving assistance with premiums and cost-sharing continues to fall well below
74 M. Moon, et al., “Options for Aiding Low-income Medicare Beneficiaries,” Inquiry —
Blue Cross and Blue Shield Association; fall 1998, pp. 346-356.
75 H. Shaner, Dual Eligible Outreach and Enrollment: A View from the States, Mar. 1999.
76 The Barents Group LLC, A Profile of QMB-Eligible and SLMB Eligible, Apr. 1999.
77 For additional information on CMS activities to increase participation see State Medicaid
Director Letter dated Jan. 13, 2000 at
[ ht t p: / / www.cms.hhs.gov/ s t a t e s/ l e t t e r s / s md11300.asp]
the number who are considered eligible based on population estimates of this
Many policymakers believe that the addition of a new Medicare prescription
drug benefit in 2006 will increase participation in the QMB and SLMB programs.
Under the legislation, states are required to screen individuals for eligibility in
QMB and SLMB if the individual applies for financial assistance with premiums
and cost-sharing for the Medicare prescription drug benefit.
Summary of Premiums and Cost-Sharing Assistance
Table 9 summarizes Medicare premiums and cost-sharing assistance for the
groups of beneficiaries discussed in this section. It outlines the various types of
Medicare premiums and cost-sharing charges and describes who is responsible for
covering each of these components.
Table 9. Summary of Medicare Premiums and Cost-sharing Coverage by Assistance Group
Type of Medicare premiums and cost-sharing
Medicare fee-for-serviceMedicare managed care
Part A deductible,deductible,Additional
Categorycoinsurance, co-coinsurance, co-enrollment fee (ifCoinsurance,
(income criteria)Part A premiumpaymentsPart B premiumpaymentsapplicable)deductible
Generally, no cost toState required toState required to
beneficiary or state. But ifcover the cost up tocover the cost up toState option to
required, state must cover theequivalentState required to coverequivalent Medicaidcover. OtherwiseState required to cover
ow 100% FPL)cost.Medicaid rate.the cost.rate.individual pays.the cost.
Generally, no cost to
iki/CRS-RL32977beneficiary or state. But ifrequired, the individual mustIndividual coversState required to coverIndividual coversState option tocover. OtherwiseIndividual covers the
g/wow 120% FPL)cover the cost.the cost.the cost.the cost.individual pays.cost.
leakState required to cover if
individual’s income is below
://wiki200% FPL, but may require
httpthat the individual pay part ofthe premium if his/her
Iincome is between 150% andIndividual coversIndividual covers theIndividual coversIndividual coversIndividual covers the
ow 200% FPL)200% FPL.the cost.cost.the cost.the cost.cost.
Generally, no cost toState covers the cost
beneficiary or state. But ifthrough 100% federalState option to
1required, the individual mustIndividual coversdollars up to stateIndividual coverscover. OtherwiseIndividual covers the
ow 135% FPL)cover the cost.the cost.allotment.the cost.individual pays.cost.
States choosing the
Generally, no cost tobuy-in option, must
beneficiary or state. But ifcover the costs for someState option to
itional Medicare Buy-Inrequired, the state has theIndividual coversgroups and have theIndividual coverscover. OtherwiseIndividual covers the
ined by the state)option to cover.the cost.option for other groups.the cost.individual pays.cost.
Administration and Data Issues
for Dual Eligible Programs
Administering claims for Medicaid services and assistance with Medicare
premiums and cost-sharing for dually eligible individuals as described in this
report is complex. State Medicaid programs must develop systems to determine
what bills Medicare has paid and the amount that should be paid to providers.
States must also determine who is eligible for assistance with Medicare premiums
and cost-sharing. This section discusses the administration of dual eligible
programs and some of the complexity involved in this process.
Administration of Claims Payment for Dual Eligibles
State Medicaid agencies must “cost avoid” or reject any claims that may be
paid by a third party, including Medicare. For those dual eligibles for whom a
service may be paid for by Medicare, the provider first submits the bill for
services to Medicare. If Medicare accepts the claim, the Medicaid agency would
only be required to pay the beneficiary cost-sharing charges. In billing the
Medicaid agency for the cost-sharing charges, either the Medicare fiscal
intermediary or carrier would send a bill to the state Medicaid agency, or the
Medicare provider would be required to bill the state Medicaid agency for the
If Medicaid pays a claim and the state subsequently becomes aware that it
could have been paid by a third party such as Medicare, then the state must seek
recovery from that third party (referred to as “pay and chase”). To help ensure
that Medicaid only pays when it’s appropriate, states may educate providers to
explain when Medicare is billed versus Medicaid, review paid claims to check for
potential third-party payment sources, resubmit selected cases to Medicare for78
payment, or, in a few cases, appeal denied Medicare claims.
Administration of Medicare Premium Assistance
To enable the administration of Medicare premium assistance, there are
several contractual and data-related agreements among states, SSA and CMS.
One of the contractual agreements (discussed previously) is the traditional
Medicare buy-in between states and CMS. Under the buy-in agreement, dually
eligible individuals are automatically enrolled in Medicare. This system can
include not only the traditional Medicare buy-in group, but also QMB and SLMB.
Beneficiaries who are covered under the buy-in agreement are not subject to the
78 W. Anderson, et al., “Adoption of Retrospective Medicare Maximization Billing
Practices by State Medicaid Home Care Programs,” Journal of Health Politics, Policy and
Law, vol. 28, no. 5, Oct. 2003.
traditional restrictions on when an individual can enroll in Medicare Part B, thus
avoiding penalties for late enrollment.79
Most states have also entered into contractual agreements with the SSA
under Section 1634 of the Social Security Act to automate part of the Medicare
premium and cost-sharing process. The 32 states which have entered into a “1634
agreement” automatically consider SSI-eligible individuals to be eligible for a
Medicare Part B buy-in. SSA sends a monthly list to CMS of individuals who
should receive Medicare premium and cost-sharing assistance based on their SSI
status. CMS verifies the information, automatically enrolls these individuals in
Medicare Part B, and bills the states via a data file for the Medicare premiums.
For all individuals who reside in states without a 1634 agreement and for
those individuals who reside in a state with a 1634 agreement but who are not
eligible for SSI, the state Medicaid agency determines eligibility for Medicare
Savings Programs and transmits that information to CMS. CMS then combines
the data received from SSA with the state determinations and bills the states on a
monthly basis for the Medicare premiums attributable to those beneficiaries. This
data file is referred to as the “Third Party Premium Billing File.”
Certain individuals are not included in the Third Party Premium Billing
File. All QDWIs and QMBs in certain states must enroll themselves in Medicare
and may be subject to enrollment restrictions and penalties. Unlike other groups,
these individuals are not automatically enrolled in Medicare. After the individual
enrolls in Medicare Part A and the state Medicaid program verifies that the
individual is eligible for cost-sharing assistance, CMS bills the states on a
monthly basis for the Part A premiums. These individuals are included in the
“group payer” category and are not included in national data on the number of
individuals receiving assistance with Medicare premiums.
Gathering reliable and consistent federal data on dual eligibles is a
challenge because there is no common definition of dual eligibles or reliable
method of estimating enrollment of dual eligibles, particularly the number of
individuals in specific subcategories (e.g., QMBs, SLMBs). Some policymakers
include individuals who only receive assistance with Medicare cost-sharing in the
definition of dual eligibles, others define dual eligibles as only those who are
receiving full Medicaid benefits.
In addition, individuals may be enrolled in more than one Medicaid group
which is not always reflected in the data that states send to the federal government
on the Medicaid Statistical Information System (MSIS). For example, an
individual may be receiving assistance with Medicare cost-sharing as a QMB and
79 L. Carpenter, “Evolution of Medicaid Coverage of Medicare Cost Sharing,” Health Care
Financing Review, winter 1998, pp. 11-18.
may be receiving full Medicaid benefits due to the receipt of SSI cash benefits.
Often, states will report the eligibility code to the federal government as SSI. The
individual’s QMB status is not included. Therefore, the number of individuals
reported on MSIS as QMB may under count the number of individuals who
actually receive assistance through this category.
For example, based on documentation of FY2002 MSIS data, 18 states
could not identify the dual eligible status of 15% or more of Medicaid enrollees or
had another problem that made their dual eligibility reporting unreliable. Even
when states are able to identify an enrollee as a dual eligible, they may not be able
to identify a specific category of dual eligibility (QMB/SLMB only, QMB/SLMB
with full benefits, QDWI, etc.). In FY2002, 17 states could not identify a category
of eligibility for 25% or more of the dual eligibles, and nine could not identify a
category for 50% or more of the dual eligibles. These data issues make it difficult
to fully understand the role of Medicaid in providing services to dual eligibles and
create challenges in the implementation of the new Medicare drug benefit or other
policy changes that may affect this group of individuals.
Dual eligibles represent a small share of Medicare and Medicaid
beneficiaries, but these individuals have significant health and long-term care
needs that are served by two very different and very complex programs.
Significant challenges remain to ensure that beneficiaries can access a
coordinated, understandable package of Medicare and Medicaid services and low-
income assistance, and that program administrators and providers can easily
navigate the administration and operations of these two programs.
Appendix A. Estimated Medicaid Expenditures for
Dual Eligibles by State and Category of Service,
Acute Lo ng-Term Prescriptiona M a naged Other/
State Total care care drug s care unkno w n
Alabama 1 ,180.13 110.69 828.18 213.99 6.72 20.55
Alaska 172.73 19.19 112.83 35.53 0.00 5.18
Arizona 767.23 25.56 17.11 1.10 717.90 5.56
Arkansas 1,017.37 237.97 597.45 165.77 3.27 12.91
California 8 ,798.91 681.91 5,217.46 1,970.53 820.19 108.81
Co lo rado 930.78 45.66 658.80 129.05 78.32 18.95
Co nnecticut 1,990.43 79.59 1,659.68 244.94 0.55 5.67
Delaware 242.34 15.06 189.62 29.47 2.99 5.19
District of Columbia263.9737.85185.8632.960.966.35
Florid a 3 ,701.42 217.50 2,293.41 948.06 129.31 113.14
Georgia 1 ,531.51 198.02 998.04 309.86 2.39 23.21
Hawaii 238.32 19.09 171.27 45.90 0.54 1.52
Idaho 158.39 16.66 104.21 34.03 0.17 3.31
Illinois 2 ,990.72 217.26 2,143.72 577.79 2.94 49.01
Indiana 1 ,734.20 139.90 1,219.41 345.47 0.23 29.20
Iowa 900.19 68.21 658.53 157.84 12.27 3.33
Kansas 747.15 38.32 571.70 129.27 0.08 7.79
Kentucky 1,182.11 127.81 732.35 265.63 36.57 19.75
Lo uisiana 1 ,154.16 92.63 763.98 281.45 0.01 16.08
Maine 640.44 42.11 451.69 138.25 0.01 8.38
Maryland 1,300.64 113.24 949.79 205.22 19.90 12.49
Massachusetts 3,326.58 203.87 2,490.97 524.77 52.08 54.89
Michigan 1,800.73 68.60 1,217.37 473.27 28.64 12.86
Minneso ta 2,210.82 100.58 1,686.78 170.37 225.37 27.73
Mississippi 1,117.46 159.28 590.77 338.19 0.00 29.23
Misso uri 1 ,836.67 168.52 1,184.61 459.39 3.83 20.32
Montana 208.73 19.13 148.21 40.62 0.01 0.75
Nebraska 576.18 47.25 420.74 104.29 0.80 3.11
Nevada 211.38 23.62 142.59 41.99 0.11 3.08
Ohio 4,296.47 266.93 3,331.78 621.97 2.33 73.47
Oklaho ma 948.09 77.99 694.69 168.66 5.46 1.29
Acute Lo ng-Term Prescriptiona M a naged Other/
State Total care care drug s care unkno w n
Oregon 791.35 23.23 444.43 156.75 155.30 11.64
Pennsylvania 3 ,862.92 69.01 2,743.48 445.00 604.88 0.54
T ennessee 1 ,663.42 106.82 985.91 265.85 290.93 13.89
T exas 4 ,019.32 183.44 2,974.00 724.13 72.45 65.30
Utah 256.46 9.28 147.54 56.22 40.45 2.98
Vermont 240.73 17.65 154.81 65.37 0.02 2.89
Virginia 1,336.60 119.32 915.35 286.68 7.35 7.90
Washington 876.62 89.41 491.06 285.37 3.89 6.88
Wisconsin 1 ,973.75 98.43 1,380.39 301.14 171.79 22.00
Wyoming 121.99 6.71 97.30 17.84 0.00 0.15
To t a l b 86,496.37 7,075.78 $59,509b 14,877.58 3,906.75 1,127.18
Source: CRS analysis based on Centers for Medicare and Medicaid Services, MSIS data, FY2002.
a. The amounts shown do not reflect rebates paid to states by pharmaceutical manufacturers. In FY2002,
total Medicaid drug expenditures for all beneficiaries were offset by 20% due to rebates.
b. Does not include $5.2 billion in expenditures for Medicare Part B premiums.
Appendix B. Estimated Number of Dually Eligible Recipients
for Selected Service Types by State, FY2002
TotalSelected managed care
number ofSelected acute care servicesSelected long-term careprogram
dua l PrescriptionInpa t i ent Outpatient Nursing Personal
Alabama 126.5 32.0 12.5 96.6 23.8 0 .4 0.0 96.4 0 .0
Alaska 9.9 2 .0 6.4 7 .5 0.6 0 .0 1.9 9 .1 0.0
Ar izona 68.8 1 .8 6.9 2 .3 0.6 0 .0 0.7 1 .4 62.2
Arkansas 109.5 26.6 57.2 89.7 18.1 1 .1 16.0 83.1 0 .0
California 946.2 95.6 288.1 527.9 94.5 5 .1 188.9 721.9 136.5
Co lo rado 63.0 7 .5 22.9 14.0 14.2 0 .1 0.0 43.2 11.5
Co nnecticut 77.5 16.3 43.1 50.3 26.7 1 .1 10.5 69.7 0 .5
iki/CRS-RL32977Delaware 13.2 2 .4 6.0 10.6 3 .0 0.2 0 .0 9.3 1 .2
g/wDist. of Columbia126.96.36.199.04.10.60.118.50.4
s.orFlorid a 357.6 91.9 165.5 161.6 68.5 2 .1 0.0 314.9 29.7
leakGeorgia 178.4 39.1 110.2 156.6 34.1 0 .8 0.0 134.4 0 .0
://wikiHawaii 22.9 0 .6 1.0 20.1 9 .3 0.1 0 .0 21.3 0 .5
httpIdaho 12.4 2 .8 7.1 10.7 1 .2 0.2 2 .6 9.9 0 .0
Illinois 210.3 20.3 90.7 140.3 62.1 6 .7 7.8 189.1 0 .4
Indiana 107.2 25.8 61.6 80.8 35.6 3 .6 0.0 94.3 0 .2
Iowa 60.9 13.3 32.7 43.9 19.0 1 .3 0.0 53.6 0 .1
Kansas 42.5 5 .9 14.2 27.2 12.8 0 .6 13.7 38.0 0 .1
Kentucky 122.1 30.2 63.2 94.8 24.2 0 .5 0.0 83.9 12.4
Lo uisiana 117.0 71.7 7 .5 93.8 27.1 3 .1 0.1 93.4 0 .0
Maine 76.6 0 .7 5.9 34.1 7 .6 0.2 1 .2 74.6 0 .0
Maryland 80.2 19.2 37.3 63.6 18.9 0 .3 3.6 71.9 5 .1
Massachusetts 194.6 17.1 118.3 141.8 47.8 1 .1 2.8 181.3 1 .8
Michigan 190.8 14.6 64.9 95.9 40.3 0 .1 7.7 178.9 11.7
Minneso ta 98.8 16.9 45.0 55.9 31.4 2 .4 15.7 61.2 43.6
Mississippi 136.3 38.6 85.0 121.2 17.7 1 .4 0.0 131.6 0 .0
Misso uri 146.3 30.8 90.1 89.8 34.7 0 .9 34.2 134.1 0 .7
Montana 15.8 3 .3 8.3 12.0 4 .3 0.1 2 .0 14.3 0 .0
Nebraska 34.3 7 .2 19.0 25.6 10.5 0 .5 0.9 32.5 0 .2
TotalSelected managed care
number ofSelected acute care servicesSelected long-term careprogram
dua l PrescriptionInpa t i ent Outpatient Nursing Personal
Nevada 21.9 2 .6 8.7 0 .0 3.8 0 .1 2.0 15.8 0 .1
Ohio 206.4 55.9 119.7 174.6 68.9 5 .4 0.0 185.1 1 .5
Oklaho ma 82.1 22.2 32.5 61.9 21.2 1 .3 10.3 75.8 2 .3
Oregon 76.4 1 .5 16.8 27.5 9 .7 0.0 9 .7 59.2 32.2
Pennsylvania 272.7 25.6 12.1 76.2 68.8 3 .2 4.3 147.4 144.2
g/wT ennessee 288.6 28.8 33.2 189.4 33.0 1 .0 0.0 200.5 287.9
s.orT exas 357.3 90.1 8 .9 38.5 79.3 8 .0 0.8 324.1 32.9
leakUtah 18.3 1 .1 3.7 6 .2 4.4 0 .4 0.3 16.5 9 .9
://wikiVermont 26.8 3 .0 10.0 14.0 3 .2 0.0 0 .0 25.9 0 .0Virginia 120.2 32.1 71.5 90.3 24.2 1 .4 8.1 96.7 2 .8
httpWashington 102.5 11.3 49.9 66.2 19.2 0 .0 0.0 94.2 3 .7
Wisconsin 134.5 22.1 59.8 46.5 33.6 2 .3 8.5 124.2 4 .4
Wyoming 7 .1 1.5 4 .1 5.6 2 .2 0.1 0 .0 5.6 0 .0
To t a l a 6,577.3 1 ,212.1 2 ,537.4 3 ,942.2 1 ,329.2 72.4 512.9 5 ,376.5 883.4
Percentage of total number of
CRS analysis based on Centers for Medicare and Medicaid Services, MSIS data, FY2002
Included in the beneficiary totals are dual eligible beneficiaries receiving a service listed above that was funded under a home- and community-based program under
ion 1915(c) or Section 1929 of the Social Security Act.
cludes all dual eligibles except those for whom Medicaid paid for Medicare premiums only.