Dual-eligible beneficiaries (aka Duals) are individuals who qualify for Medicare while also receiving assistance through their state Medicaid program, making them simultaneously enrolled in both Medicare and Medicaid. Individuals can be enrolled in Medicare FFS and Managed Medicaid; Medicare FFS and Managed Medicaid (MM); Medicare Advantage (MA) and Medicaid FFS; or MA and Managed Medicaid. These two plans often are not talking to each or integrated in any capacity; however, Duals have the option to participate in a Dually-Eligible Special Need Plan (D-SNP), a type of MA plan that coordinates Medicaid and Medicare benefits (ranging from the less integrated coordination-only plans, to the more integrated highly-integrated plans (HIDEs), to the even more integrated fully-integrated plans (FIDEs).
The Dual population is relatively small (one-fifth of the Managed Medicaid population), but also growing at a rapid rate. McKinsey estimates that the Duals population enrolled in managed care will grow at more than a 9% CAGR from 2022 through 2027, as compared to 5% for MA. Within the Duals market, the needle is moving toward FIDE and HIDE plans which allow a single plan to take on and distribute risk for their beneficiaries, while coordinating benefits across Medicaid and Medicare. In 2023, D-SNPs, a plan offered by Medicare Advantage Organizations (MAOs), had enrolled 5.2M individuals (8% of which were FIDE; 35% were HIDE; 57% were coordination-only plans). While risk pools for individual plans are small, the market is consolidated among large insurers, with about half of D-SNP enrollees in United Healthcare (UHC) or Humana plans in 2023. Lastly, D-SNP enrollment varies significantly by state.
The spend for Duals is typically higher than MM and Medicare. Average patients between cost $1K and $1.7K PMPM in D-SNPs. This cost corresponds with their acuity, as 70% of Duals have 3 or more chronic conditions and 41% have a behavioral health disorder. Along with higher spend, D-SNP plans follow the same risk score regulations as MA plans, allowing for more coding upside.
| Type of Medicare | Type of Medicaid | % of Total Duals Population |
|---|---|---|
| Medicare FFS | Medicaid FFS | 28% |
| Medicare Advantage (MA) | Managed Medicaid | 24% |
| Medicare FFS | Managed Medicaid | 23% |
| Medicare Advantage (MA) | Medicaid FFS | 19% |
Of the 24% that were in Medicare Advantage and Managed Medicaid, 43% are at-risk with Medicare Advantage plans. Among the 43% of dual-eligible individuals in Medicare Advantage, more than half (3.6 M) were covered through dual eligible special needs plans D-SNPs.
D-SNP Enrollment by state, as of 2021
8% of which were FIDE: As of January 1, 2023, FIDE SNPs are D-SNPs that provide coverage of Medicare and Medicaid benefits under a single legal entity that holds both: (1) an MA contract with CMS; and (2) a contract with the state Medicaid agency that meets the requirements of a managed care organization. These plans must meet the requirements of coordination-only D-SNPs and must also offer an aligned Medicaid plan that integrates the Medicare and Medicaid benefits. Medicare pays the plan for Medicare-covered services and Medicaid pays the plan for Medicaid-covered services. Currently, Duals may enroll in the D-SNP without also enrolling in the Medicaid-plan. Similarly, there may be Medicaid enrollees with coverage through the aligned Medicaid plan who are not also enrolled in the D-SNP. Starting in 2025, enrollment in fully integrated D-SNPs will be limited to those who are enrolled in both the Medicare and Medicaid plans.
35% were HIDE: These plans must meet the requirements of coordination-only D-SNPs and must also have a Medicaid plan operating in the same counties as the D-SNP. The parent organization provides both Medicare and Medicaid services, but there is no requirement that people enroll in both plans. There are 2.2M Dual enrolled in these integrated plans.
57% were coordination-only (CO) plans: These plans provide Medicare-covered services and are required to coordinate the delivery of benefits with the Medicaid program, contract with state Medicaid programs, and notify states when enrollees are admitted to inpatient facilities.