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By Monica E. Oss

February 21, 2011

One new wrinkle in cost containment is the focus on consumers with disabilities who fall in that often-discussed high-needs, high-cost category. This group includes (but is certainly not limited to) individuals who are dual eligibles (people who are eligible for both Medicare and Medicaid based on disability and low income). The reason for this focus is certainly clear. Though only 21% of Medicare beneficiaries are dual eligible, they make up 36% of Medicare spending (Dual Eligibles Account for 36% of Medicare Spending ). And that same population makes up 15% of the Medicaid population, but close to 40% of spending (40% of Medicaid Outlays Due to Dual Eligibles ). It’s a matter of going where the money is.

Historically, this group has been excluded from the more aggressive forms of health care cost containment. But, that is no longer the case.

A recent letter from Department of Health and Human Services (HHS) Secretary Kathleen Sebelius outlined several Medicaid cost containment options that are available to states (Federal Government Issues Guidance to States on Medicaid Cost Containment Options ) — among them were several directed specifically at this high cost population.

Moving the dual eligible population towards more home and community-based services is also a way to cut costs – and the data clearly supports this recommendation (see Cost of Services for Dual Eligible Population 27% Less for Those Receiving Community Based Long-Term Supports & Services ).

And, because managed care has the potential to save the health care system billions of dollars in the long term (see Capitated Health Care Plans for ‘Dual Eligible’ Individuals Could Cut $70 Billion From Federal Spending by 2024 ), states (and Medicare) are increasingly including this population in managed care initiatives. (For example, California Granted New 1115 Medicaid Waiver, Starts Mandatory Managed Care for Seniors & People With Disabilities and Hawaii Medicaid Moving Seniors & Disabled Consumers to Mandatory HMOs .)

This is a significant shift in policy – that will result in a significant shift in practice – in the health care field. Look to our team for continuing coverage.


Monica E. Oss
Chief Executive Officer, OPEN MINDS


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To read more about special needs plans and the dual eligible population, see: 27% More Medicare Advantage Special Needs Plans for Dual Eligibles in 2011 all members 

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