Medicaid Managed Care - U.S. Senate Special Committee on Aging

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As of June 30, 1996, only four of the 16 states that enroll persons with disabilities and
seven of the states that enroll older persons enrolled dual eligibles into their
programs. 2 8 Since that time several other states have begun to enroll dual eligibles,
but the over-all number of programs that enroll dual eligibles remains small.
Nonetheless, states are intensely interested in enrolling dual eligibles into managed
care due to the large number of members of special populations that are dually
eligible and the high cost of caring for this subgroup. While state specific figures are
not available, six million Medicare beneficiaries also participate in state <strong>Medicaid</strong>
programs. Estimates suggest that 95-98% of the elderly <strong>Medicaid</strong> beneficiaries and
50% of the people with disabilities are covered by Medicare.
<strong>Medicaid</strong> managed care programs that enroll dual eligibles need to develop
enrollment procedures that take into consideration the options available under
Medicare, especially in states with a sizeable Medicare HMO market penetration. In
July 1997, 4.8 million Medicare beneficiaries had enrolled in HMOs.29 While
enrollment has been increasing over 30% a year, the provisions of Title TV-A of the
Balanced Budget Act of 1997 is likely to expand enrollment even further. This new
law will allow Medicare to contract with Provider Sponsored Organizations and
Preferred Provider Organizations in addition to HMOs. Each year beneficiaries will
voluntary select a delivery system during an open enrollment period. Beneficiaries
may choose from fee-for-service, HMOs, PPOs and PSOs. Beginning in 2002, once a
beneficiary selects an option, they will remain in that system for the full calendar
year. Beneficiaries may change their selection once during an annual 90 day open
enrollment period. This law is expected to expand the number of managed care
options available and to simplify enrolling dually eligible beneficiaries in managed
care programs. Also, importantly for <strong>Medicaid</strong> agencies, similar changes to
<strong>Medicaid</strong> enrollment rules (12 month lock-in with a 90 day open enrollment) have
potential to bring the administrative rules of these two programs closer together.
<strong>Medicaid</strong> and Medicare have separate enrollment procedures that need to be
coordinated in order to establish the same effective enrollment date when a
beneficiary enrolls in one plan for both programs. The enrollment process for dual
eligibles in most states is complicated by the procedures and timetables followed by
Medicare and <strong>Medicaid</strong>. <strong>Medicaid</strong> recipients cannot be enrolled prospectively and
28 Please see Volume I for more details about specific state policies. It is likely that many of
the state programs that enroll dually eligible older persons are PACE programs specifically designed to
serve dually eligible frail older persons. These programs operate under special federal waivers that reduce
the administrative problems created by dual eligibility.
29 The number of dually eligible beneficiaries enroll in Medicare HMOs is not known.
The National Academy for State Health Policy * 0 8/97 IV-58