There are nearly nine million people in the United States who receive both Medicare and Medicaid benefits. Recent cost estimates show that this group, known as dual eligibles, accounts for a disproportionate share of spending in both programs. Although the Medicare and Medicaid programs were never intended to work together, a provision of the Affordable Care Act of 2010 established a Federal Coordination Health Care Office to streamline benefits for this group of beneficiaries.

An April 18 Health Affairs Web First study examined 2007 costs and services associated with the dual eligibles. Authors Teresa A. Coughlin, Timothy A. Waidmann, and Lokendra Phadera of the Urban Institute found that this group is indeed a costly group overall. For example, per capita Medicare and Medicaid spending in 2007 for dual eligibles was $29,868, more than four times the per capita spending for other Medicare beneficiaries.

However, Coughlin and her colleagues also found a great deal of variation within the dual eligible population: 20 percent of dual eligibles accounted for more than 60 percent of combined spending for this population, while nearly 40 percent of the group had lower average per capita spending than other Medicare beneficiaries. Fewer than 1 percent of dual-eligible beneficiaries were among the top 10 percent of spenders in both Medicare and Medicaid. For high-cost Medicaid dual eligibles, most spending went toward long-term care services, while for high-cost Medicare dual eligibles, most spending was for acute-care services.

“These findings suggest that decision makers need to take a multiprong policy approach to improving the value, efficiency, and quality of care provided to dual-eligible beneficiaries,” conclude the authors. “By carefully designing programs to meet the specific needs of different types of dual eligibles, the Medicare and Medicaid programs can improve efficiency and value while maintaining and perhaps improving access to needed services.”