The country's 9.3 million Medicare-Medicaid dual enrollees account for 31% of all Medicare spending and 39% of all Medicaid spending, prompting intensive policy efforts to optimize care and reduce health expenditures for this population. Although Medicaid provides needs-based supplemental coverage for Medicare's significant out-of-pocket costs, many eligible Medicare beneficiaries do not join Medicaid. Incurring high Medicare-related expenses may prompt low-income individuals to enter Medicaid. If so, Medicare cost- sharing measures that reduce Medicare utilization may also increase Medicaid enrollment. This unintended effect would shift Medicare costs to Medicaid. Due to a high inpatient deductible, hospital stays can be particularly expensive for the 11% of Medicare beneficiaries that have no supplemental private insurance to cover cost-sharing. This project examines the impact of a hospital stay and its related out-of-pocket costs on the likelihood of a Medicare beneficiary enrolling in Medicaid. The study's hypothesis is that individuals will be more likely to enroll in Medicaid following a hospitalization. Individuals who have higher hospital out-of-pocket costs could be even more likely to enroll in Medicaid, an effect that could vary across states depending on Medicaid eligibility policies. Using 2007-2010 Medicare claims and enrollment data, this study will describe the variation across states in first-time Medicaid enrollment rates following a hospital admission among Medicare beneficiaries. Time-series models will characterize new Medicaid enrollees by demographic characteristics and inpatient factors including diagnosis, length of stay, presence of chronic conditions and discharge location for post-acute care. An innovative economic analysis will estimate the impact of an additional ~$1,000 in Medicare inpatient cost-sharing on the likelihood of a Medicare beneficiary enrolling in Medicaid. Exogenous variation in Medicare deductible requirements will be used to compare Medicare enrollment among Medicare beneficiaries with similar hospital utilization but different out-of-pocket costs. An extended version of this analysis will examine whether beneficiaries who live in states that allow Medicare beneficiaries with high medical expenses to more easily qualify for Medicaid are more likely to enroll in Medicaid after incurring larger out-o-pocket costs. The study results will provide evidence for whether inpatient stays and Medicare cost-sharing trigger enrollment in Medicaid for Medicare beneficiaries. A better estimate of how beneficiaries respond to Medicare cost-sharing could lead to more precise estimates of whether reforms to Medicare's cost sharing provisions will increase or decrease Medicaid enrollment and related costs. As states and the Centers for Medicare and Medicaid Services design integrated programs for dual enrollees, these research findings will also inform strategies for effective care coordination for Medicare beneficiaries newly enrolling in Medicaid.
This study's evaluation of how Medicaid enrollment is related to Medicare hospital stays and inpatient deductibles will extend policy makers'knowledge of what factors contribute to Medicaid enrollment. The results may identify an opportunity for Medicare and Medicaid to provide health care access to low-income Medicare beneficiaries more efficiently. This information could inform efforts to optimize Medicare cost-sharing requirements, Medicaid eligibility criteria and integrated Medicare-Medicaid care coordination.