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Consumer Reports

'Dual enrollees' in Medicare, Medicaid become a political hot potato | (KRT) Elmo Cruz is 67 years old, uses a wheelchair and lives alone in a government-funded apartment in Manhattan. His only money comes from his monthly federal disability and Supplemental Security Income checks.

Disabled by dystonia, an incurable muscular disorder, Cruz also has angina. He relies on Medicaid to pay for the various prescription drugs he requires. Without the federal coverage, he said, "I would probably die, because I don't have the money to pay for the medicine."

Cruz is typical of the estimated 6.5 million people who get health care through both Medicaid and Medicare, the nation's public-health plans for the impoverished and the elderly, respectively. Most are poor, sick and old.

The average prescription-drug costs for these "dual enrollees" in federal health-care programs top $2,800 a year, compared with $1,240 for Medicaid-only enrollees, according to a recent study by the Commonwealth Fund, a private, nonpartisan foundation that supports health research.

As Congress nears approval of legislation that will spend $400 billion over 10 years subsidizing prescription-drug costs for Medicare beneficiaries, dual enrollees such as Cruz have become a political hot potato. Neither state governments, stung by tax revenue shortfalls and rising Medicaid costs, nor the federal government, which is trying to rein in Medicare costs, wants primary responsibility for paying the $16 billion prescription-drug tab that dual enrollees run up annually.

The legislation before the House of Representatives would shift their entire drug bill to Medicare. That would save the states about $6.8 billion a year. The Senate version assumes Medicare would pay only $15 billion for their bills over 10 years. The final shape of the new Medicare drug-benefit law could depend heavily on how this dispute is resolved.

Cruz and those like him would retain drug coverage either way, although specifics could differ between plans offered under Medicaid versus those under Medicare. The primary issue is whether the expense is borne solely by the federal government or shared by Washington and the states.

The final terms will have immense long-range implications, because aging baby boomers - born between 1946 and 1964 - will push the number of adults 50 and older to more than 108 million by 2015. As boomers age, the number of dual enrollees in Medicare and Medicaid is projected to grow by 130,000 to 195,000 a year. Their medical expenses will rise as well.

That outlook doesn't square well with proposals in Congress to cut costs for both Medicare and Medicaid. Some experts question whether cost-cutting constitutes "reform" in light of such trends.

"Reform is making programs work better for people who need it. And if you're not doing that for the people who need it most, how can you call it reform?" asked Judy Feder, a health care expert and dean of the Public Policy Institute at Georgetown University.

A disproportionate share of dual enrollees - 42 percent - are minorities. Most are women; many are likely to have a poor education, live alone and have more than two chronic illnesses.

About 23 percent of dual enrollees are in nursing homes, compared with only 3 percent of other Medicare recipients. That high nursing-home rate is the main reason the average annual medical bill of a dual enrollee dwarfs that of Medicare- and Medicaid-only beneficiaries - $16,278, compared with $7,396.

Those figures help explain why the nation's governors offered to accept a cap on their federal Medicaid funding if Congress would agree to pay for dual enrollees' drug costs through Medicare. That would save states about $6.8 billion a year, according to the Commonwealth Fund study. Medicare is paid entirely with federal tax dollars. Medicaid is funded with both state and federal tax dollars.

Said Rep. Bill Thomas, R-Calif., the chairman of the House Ways and Means Committee, who supports such a shift, "This approach ensures that all seniors across the country will have access to affordable prescription drugs, while alleviating much of the burden states now confront."

Govs. Paul E. Patton of Kentucky, a Democrat, and Dirk Kempthorne of Idaho, a Republican, echoed those sentiments in a recent letter to Senate Finance Committee Chairman Charles Grassley, R-Iowa, who co-sponsored the Senate Medicare bill:

"If the dual eligible populations continue to be a joint responsibility, states will be forced to cut the optional (Medicaid) benefits and populations - mostly women and children - which are a key investment in the future."

Supporters also say that placing the dual enrollees under Medicare would allow patients to better coordinate their drug usage with their Medicare-funded doctors and provide more uniform services, since state Medicaid programs vary widely.

Despite the lobbying, the bipartisan Medicare proposal heading toward Senate passage next this provides only minimal relief for the states. Grassley said there just wasn't enough money to do more.

"The easiest thing for us to do was to help the states with some of the costs and leave (the dual enrollees) where they were," Grassley said.

But the issue isn't dead.

Sen. John "Jay" Rockefeller, D-W.Va., will offer an amendment on the Senate floor to beef up federal funding for this purpose, but its outlook is uncertain. The issue is likely to be debated again when the House and Senate reconcile their versions of the bill in a joint conference committee, said Senate Majority Leader Bill Frist, R-Tenn.

"At this juncture, I can't predict how that debate will play out. But it will be one of the issues that is debated," Frist said.

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© 2003, Distributed by Knight Ridder/Tribune Information Services