Health Care Use and Spending Among Need-Based Subgroups of Medicare Beneficiaries With Full Medicaid Benefits

Importance Beneficiaries dual eligible for Medicare and Medicaid account for a disproportionate share of expenditures due to their complex care needs. Lack of coordination between payment programs creates misaligned incentives, resulting in higher costs, fragmented care, and poor health outcomes. Objective To inform the design of integrated programs by describing the health care use and spending for need-based subgroups in North Carolina's full benefit, dual-eligible population. Design, Setting, and Participants This cross-sectional study using Medicare and North Carolina Medicaid 100% claims data (2014-2017) linked at the individual level included Medicare beneficiaries with full North Carolina Medicaid benefits. Data were analyzed between 2021 and 2022. Exposure Need-based subgroups: community well, home- and community-based services (HCBS) users, nursing home (NH) residents, and intensive behavioral health (BH) users. Measures Medicare and Medicaid utilization and spending per person-year (PPY). Results The cohort (n=333240) comprised subgroups of community well (64.1%, n=213667), HCBS users (15.0%, n=50095), BH users (15.2%, n=50509), and NH residents (7.5%, n=24927). Overall, 61.1% reported female sex. The most common racial identities included Asian (1.8%), Black (36.1%), and White (58.7%). Combined spending for Medicare and Medicaid was $26874 PPY, and the funding of care was split evenly between Medicare and Medicaid. Among need-based subgroups, combined spending was lowest among community well at $19734 PPY with the lowest portion (38.5%) of spending contributed by Medicaid ($7605). Among NH residents, overall spending ($68359) was highest, and the highest portion of spending contributed by Medicaid (70.1%). Key components of spending among HCBS users' combined total of $40069 PPY were clinician services on carrier claims ($14523) and outpatient facility services ($9012). Conclusions and relevance Federal and state policy makers and administrators are developing strategies to integrate Medicare- and Medicaid-funded health care services to provide better care to the people enrolled in both programs. Substantial use of both Medicare- and Medicaid-funded services was found across all need-based subgroups, and the services contributing a high proportion of the total spending differed across subgroups. The diversity of health care use suggests a tailored approach to integration strategies with comprehensive set benefits that comprises Medicare and Medicaid services, including long-term services and supports, BH, palliative care, and social services.