Benefit Bulletin: October 2012

Benefit Bulletin: October 2012

Medicaid Changes Raising TSCL Concerns For Low-Income Seniors

An untested federal and state Medicare and Medicaid demonstration program is raising concerns that it affects too many low–income seniors, and is growing too fast.  Enrollment has far exceeded early expectations and both provider, and advocacy groups are warning that its size would be hard to unwind if the demonstration fails to provide quality services and access to medically necessary services.

The program was designed to address the needs of low–income seniors, who receive both Medicare and Medicaid.  The group includes the oldest, sickest and poorest of seniors, including many Notch Babies, who tend to have multiple health problems, including the need for long term care.  Although they make up only 15 percent of all Medicaid beneficiaries, they account for almost 40 percent of Medicaid expenditures, according to the Kaiser Commission on Medicaid and the Uninsured.

Enrollment in the demonstration program far exceeds early target of 1–2 million beneficiaries set by the Centers for Medicare and Medicaid Services (CMS).  If all 26 state proposals are approved, approximately 3 million dual–eligible beneficiaries, about 40 percent of seniors who receive both Medicare and Medicaid, would be automatically enrolled into new managed–care plans.

In a letter to Marilyn Tavenner, the Acting Administrator of CMS, the Medicare Payment Advisory Commission (MedPac) warned that some of the health plans don't have the experience to manage the full range of benefits required by dual eligibles or the capacity to serve large numbers that would be automatically transferred into the plans en masse at the beginning of the program.

CMS plans to automatically enroll the seniors in participating states with an "opt-out" provision. But TSCL has concerns as to whether beneficiaries will be able to choose the best form of care and how they would be able to switch plans or return to traditional Medicare.

TSCL is especially concerned about how seniors and their families would be informed about the change of health plans.  Dual eligible seniors are more likely to have cognitive challenges, and their family caregivers may not understand that a transition to a new health plan is taking place, or how to navigate the changes.  TSCL is particularly concerned that seniors may not be able to keep their former doctors and other healthcare providers if those providers don’t participate under the new plans.  If so, this raises the potential for unintended and uncovered costs, if seniors unwittingly continue to see their former doctor or present the wrong health plan card when visiting providers.

So far critics of the program have not convinced CMS to pare down the size of the demonstrations and states winning approval will get the green light to start shifting patients into managed care plans starting next year.

The period to watch for changes will be this fall.  If you or a family member currently receives both Medicare and Medicaid, carefully watch your mail for announcements of changes to a new health plan.  Should you have questions about your Medicare or Medicaid benefits, you can get free counseling from your State Insurance Assistance Program (SHIP).  Contact your local area agency on aging or find a counselor at

Sources:  Letter to Marilyn Tavenner, Acting Administrator, CMS, from Medicare Payment Advisory Commission, July 11, 2012.  Testimony of Robert A. Berenson, M.D., Institute Fellow, the Urban Institute, U.S. Special Committee on Aging, July 18, 2012.