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  • Data Points #11: Newly Medicare-eligible disabled: comparison of duals and nonduals

Data Points Publication Series



Research Report - Final – Jun. 15, 2012

Data Points #11: Newly Medicare-eligible disabled: comparison of duals and nonduals

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Note: This report is greater than 5 years old. Findings may be used for research purposes, but should not be considered current.

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Overview

Among disabled individuals in the first six months of Medicare eligibility, comorbidities and health care utilization differ greatly across categories of State support.

Beneficiaries who qualify for some assistance but not full Medicaid benefits are particularly high users of Medicare services.

The percentage of beneficiaries who receive any support or full Medicaid benefits varies widely across States.

In 1972, Congress expanded the Medicare program to provide health care benefits for individuals under age 65 whose disabilities entitle them to Social Security benefits for 24 consecutive months. The program has grown steadily since its inception; by 2010, about 8.1 million individuals received health insurance under this Medicare benefit.

Low-income disabled Medicare beneficiaries may also receive full Medicaid benefits or assistance with Medicare premiums and copayments. The terms "dual-eligible," "dual beneficiaries," or "duals" are commonly applied to those who receive both full Medicaid and Medicare benefits, and the same terms inconsistently include those who receive assistance with Medicare premiums and copayments but not full Medicaid benefits. Since 1980, the number of dual beneficiaries has risen dramatically; in 2009, 46.6 percent of disabled Medicare beneficiaries received assistance ranging from premiums to full Medicaid benefits. This increase may be due in part to the fact that in 1993, State-based assistance programs expanded to include broader options such as financial support for premiums, copayments, and deductibles.

Many studies compare health care usage between those who are and are not dual-eligible, but only a few focus specifically on those whose Medicare benefits are due to disability. Findings from this small body of research consistently reveal that duals use more health care than those who are similarly disabled but not dual-eligible.

Identifying factors that drive health care usage by dual-eligible disabled persons is challenging. First, newly disabled and chronically disabled persons differ in important ways. Second, States vary with regard to their policies and generosity with Medicaid benefits, so the barriers associated with becoming dual-eligible also vary across States.

Distinguishing the effects of local policies from the actual characteristics of disabled persons presents difficulties. Finally, disabled duals and nonduals make up a heterogeneous and largely community-dwelling group. In fact, Foote and Hogan estimated that from 1994 to 1996, only eight percent of Medicare beneficiaries with disabilities lived in institutional settings, and a 2003 estimate suggested a similar rate of 9.4 percent.9 These estimates, however, mask tremendous variation between disabled persons who are and are not also eligible for State assistance (including full Medicaid benefits). The rate of institutional living is a striking 10.9 percent for those who are eligible for State assistance, compared to only 0.8 percent for those who are not.

This report focuses on the first six months of Medicare eligibility for persons with disabilities, examining their demographic characteristics, prevalence of select comorbidities, and Medicare service use and expenditures. We include information about Medicare enrollees who are also Medicaid eligible, beneficiaries who receive State assistance with their Medicare expenditures, and those who receive no State assistance.

Conclusion

Our analysis underscores the need for policy and research to focus beyond disabled Medicare beneficiaries who qualify for full Medicaid benefits to include those who receive some assistance (SLMB/QMB) and those whose assistance status changes over the first six months of Medicare enrollment. These four groups differ significantly in their demographic and health care profiles.

It is safe to assume that nearly all full duals are already covered by Medicaid when they become Medicare eligible. Thus, although this group tends to be very poor, its members do not enter the Medicare program after an extended period without health insurance. In contrast, disabled persons with no Medicaid benefits during the Medicare waiting period are often completely uninsured, and thus may delay needed care or not fill all prescriptions due to cost concerns. The relative usage of Medicare benefits across categories of assistance is consistent with these patterns. If higher usage by those with partial and incomplete assistance levels reflects pent up demand, then experience in the first six months will not necessarily correlate with later usage patterns. Two studies have examined the effect of eliminating the waiting period, and both concluded that doing so would increase Medicare expenditures to an extent not completely offset by longer term consequences of delayed care seeking.

Based on our data, we can neither use insurance status to categorize individuals entering Medicare, nor accurately determine the impact of prior insurance status on care use during the first six months in the program. To discern how to best direct programs aimed at appropriate use, further research should examine usage over longer time periods and seek to determine whether usage levels stabilize and whether categories of use continue to differ across groups. Our analysis does not distinguish beneficiaries who are institutionalized from those who are community dwelling, or those whose disabilities are developmental from those whose disabilities are acquired. These important distinctions likely correlate with both health care consumption and level of State assistance.

Most estimates suggest that disability rates among working-aged adults are rising. The growing number of people who receive Medicare benefits under the Social Security Administration disability program probably does reflect an actual increase in the population of disabled persons under age 65. However, there is no simple way to determine whether there is a change in the percentage of persons with disabilities who receive health care through the Medicare program.

Pezzin and others suggest that the generosity of State Medicaid programs plays an important role in dual eligibility. Such examinations are beyond the scope of this report. We do, however, show considerable State variation in the percentage of newly disabled who receive State assistance. State Medicaid policy could affect Medicare disability enrollment in multiple ways. For example, increased generosity could include assistance with completing applications and thus lead to an increase in Medicare disability applications.

Alternatively, reduced State generosity would lead to an increased number of disabled people turning to the Social Security Administration and Medicare for support. Monitoring trends in disability and program enrollment will be necessary to determine the impact of State generosity in these realms and to identify differences in how States and individuals use State support for Medicare benefits.

Our findings suggest that health care usage in the first six months of Medicare enrollment varies significantly across categories of State support. In particular, new enrollees who qualify for assistance with copayments and/or deductibles but who do not receive full Medicaid benefits for at least part of the six-month period are particularly high users of health care. This pattern is consistent with the reality of pent up demand for health care in this group. We were intrigued to find that the greatest health care need is not among full Medicaid enrollees--who presumably have the greatest health problems--but rather among poor individuals who receive financial assistance for Medicare premiums and copayments. This analysis serves as a reminder that broad groupings of disabled persons obscure important distinctions. Future research is needed to examine the nature and persistence of the patterns we have identified. If these initial distinctions among groups persist beyond the first six months, they would point to potential opportunities for focused outreach during the early enrollment period in Medicare.