MACPAC Shares Spending Trends Among Dual Eligible Beneficiaries

MACPAC has released data on utilization and healthcare spending trends among dual eligible beneficiaries in calendar year 2019.

First, the report assessed dual eligible use of certain Medicare services and compared their utilization and spending to trends among fee-for-service Medicare beneficiaries. Under Medicare Part A and Part B, the report analyzed utilization and costs for inpatient hospital services, skilled nursing facility care, home healthcare, and other outpatient services. The report also looked at trends in Medicare Part D.

Nearly a quarter of all full-benefit fee-for-service dual eligible beneficiaries used inpatient hospital care in 2019, including psychiatric hospital services. This was a significant source of spending for this population, accounting for 37 percent of all healthcare spending under Medicare Part A and Part B.

In contrast, 15 percent of fee-for-service non-dual eligible Medicare beneficiaries leveraged inpatient hospital care. Inpatient hospital care made up 30 percent of overall healthcare spending for this population.

Per-patient spending was higher among dual eligibles than among fee-for-service Medicare beneficiaries. Among dual eligible beneficiaries, inpatient hospital spending reached $23,652 per patient. Among fee-for-service Medicare beneficiaries, inpatient hospital spending totaled nearly $19,400 per patient.

For both populations of patients, the Medicare Part A and Part B service category with the highest utilization and spending was the “other outpatient” category. This category covered provider services, durable medical equipment, emergency room use that did not result in an inpatient stay, and other services.

Most dual eligible beneficiaries (94 percent) used other outpatient services. Spending on this care category amounted to 44 percent of all expenditure among dual eligible beneficiaries.

Meanwhile, among fee-for-service Medicare beneficiaries, 92 percent of the population used other outpatients services, which contributed 57 percent of the group’s overall healthcare spending.

As for every other service category, spending per patient on other outpatient services was higher among dual eligible beneficiaries when compared to non-dual eligible fee-for-service Medicare beneficiaries. 

Other outpatient spending reached $7,350 per patient among dual eligible patients, while non-dual eligible fee-for-service Medicare beneficiaries paid on average $5,789 per patient for these services.

The report also highlighted that dual eligible beneficiaries had higher spending on skilled nursing facility services than their non-dual eligible counterparts. Twelve percent of dual eligible beneficiaries’ total spending went toward skilled nursing facility care, compared to six percent among non-dual eligible beneficiaries.

Second, the report assessed dual eligible use of Medicaid services, in contrast to their non-dual eligible Medicaid counterparts who were disabled and under the age of 65.

In three categories, non-dual eligible Medicaid beneficiaries had a higher utilization: acute hospital care, prescription drugs, and managed care capitation. One category tied with dual eligible beneficiaries’ utilization: home and community-based services (HCBS).

Seventeen percent of dual eligible beneficiaries received institutional long-term services and supports (LTSS), compared to only four percent of non-dual eligible Medicaid beneficiaries. 

However, costs tended to be higher for the smaller group of non-dual eligible Medicaid beneficiaries who received LTSS care, amounting to $77,934 per beneficiary. In contrast, spending amounted to $51,571 per dual eligible beneficiary.

Although spending was much higher per patient for non-dual eligible Medicaid beneficiaries, the cost did not take up as great of a share of overall expenditure per beneficiary compared to dual eligible beneficiaries. 

Among non-dual eligible Medicaid beneficiaries, spending on institutional LTSS took up 12 percent of the group’s overall spending, but this share reached 37 percent among dual eligible beneficiaries.

When researchers drilled down on the use of institutional LTSS varied by age, they found that dual eligible beneficiaries under the age of 65 had much higher spending in these institutions, whereas dual eligible beneficiaries over age 65 had much higher spending.

“Use of Medicaid-covered institutional LTSS among individuals dually eligible for Medicare and Medicaid services resulted in disproportionately high Medicare and Medicaid spending,” the report found.

Only 17 percent of dual eligible beneficiaries used institutional LTSS. However, 29 percent of Medicare spending on dual eligibles and 41 percent of Medicaid spending on dual eligibles could be traced back to LTSS services.

“Over the last two decades, federal and state policymakers have focused on shifting LTSS use from institutional settings toward HCBS,” the report explained. 

“In CY 2019, the share of FFS full-benefit dual-eligible beneficiaries who used HCBS was higher than the share who used institutional LTSS (26 percent vs. 17 percent). However, institutional LTSS and HCBS represented similar shares of Medicaid spending on FFS full benefit dual-eligible beneficiaries (42 percent vs. 41 percent).”

Since the timeframe for this report in 2019, the coronavirus pandemic has forced some changes to LTSS. Many states have expanded their LTSS services in response to the long-term side effects of the coronavirus and the need to protect seniors and vulnerable populations from exposure.

These data points are essential as policymakers consider streamlining care and providing better support for dual eligible beneficiaries.