Medicaid fills critical gaps in health coverage for Medicare beneficiaries with low incomes or for many in need of extensive long-term care services. About 7 million people are covered by both Medicare and Medicaid, nearly one-fifth of each program's enrollment. But these dual enrollees account for a much higher share of each program's spending: 28 percent for Medicare and 35 percent for Medicaid. This overlapping of the two programs has prompted federal and state policymakers to be concerned about the effect of each program on the other's costs, and to seek improvements in the coordination of care across programs for dual enrollees.

The Roles of Medicare and Medicaid in Financing Health and Long-Term Care for Low-Income Seniors, a new Commonwealth Fund chart book by Harriet Komisar and Judith Feder of Georgetown University and Daniel Gilden of JEN Associates, examines Medicare-Medicaid enrollees in Georgia, Maryland, Massachusetts, and Wisconsin. It focuses on the way Medicare and Medicaid interact to serve low-income seniors covered by both programs. There is little available national data on this population, and the chart book is one of the first analyses to look at service use and spending across both programs for a large sample of Medicare-Medicaid enrollees in several states. The findings show how the two programs work in tandem to serve elderly beneficiaries and reveal how the experiences of enrollees vary among different groups and in different states.

Medicaid is vital to eligible low-income Medicare beneficiaries. It pays for Medicare's premium and cost-sharing requirements, allowing enrollees to obtain needed care that they otherwise might not be able to afford because of premiums, deductibles, or coinsurance costs. Medicaid also pays for services not covered under Medicare, the most important being prescription drugs, nursing home care, and other home- and community-based long-term care services.

In the four states analyzed here, spending across both programs for elderly Medicare-Medicaid enrollees averaged $1,675 per person per month in 1995, or about $20,100 per year (for Medicare-Medicaid enrollees with full Medicaid benefits). This spending reflects relatively high use of acute care services, which are primarily financed by Medicare, as well as the use of long-term care services, which are primarily a Medicaid responsibility.

It is essential to understand the use and spending patterns of Medicare-Medicaid enrollees when evaluating various policy proposals under discussion for the future of both programs, according to the findings. To ensure that low-income Medicare-Medicaid enrollees are adequately protected in the future, policymakers must bear in the mind the importance of both programs in serving this vulnerable population.

Facts and Figures
  • Just over three-quarters (77%) of elderly Medicare-Medicaid enrollees are women. Among Medicare-Medicaid enrollees age 85 and older, 84 percent are women.
  • Spending across both programs for elderly Medicare-Medicaid enrollees (with full Medicaid benefits) averaged $1,675 per person per month in 1995. Medicaid financed 59 percent of this spending, reflecting the significant amount of long-term care received by elderly Medicare-Medicaid enrollees.
  • In the four states, Medicaid covered 15 percent of Medicare enrollees in 1995, about the same as the nationwide figure that year of 16 percent.