Feb 20th, 2014
New data says that long term care residents who qualify for Medicaid but not Medicare accrue the most expenses for their state’s program.
The US Government Accountability Office released a report detailing the expenditures of Medicaid beneficiaries based in their form of payment. The report uses information from 2009 government data and analyzes the differences in costs between the different groups.
Beneficiaries are split into four distinct groups for statistical purposes: high expenditure Medicaid-only beneficiaries, all other Medicaid-only beneficiaries, high expenditure dual-eligible beneficiaries, and all other dual-eligible beneficiaries. Dual eligible beneficiaries are those who qualify for both Medicaid and Medicare.
Individuals receiving benefits from the state Medicaid program who fall within the top 5% of the state’s total expenditures are considered to be in the “high expenditure” group. The report shows that these individuals, though they only make up 4.3% of all Medicaid recipients across the nation, accounted for 31.6% of state Medicaid spending in 2009.
This disparity is huge, especially considering all other Medicaid-only beneficiaries, which make up 81.2% of the nation’s Medicaid recipients, account for just a small amount more of costs at 33.1% of total expenditures.
The report explains that long term care residents have a 24% chance of falling within the high expenditure group, followed by individuals with HIV/AIDS, who have a 20.8% chance. Individuals with disabilities are the next most likely group to fall within that qualification, with an 18.3% chance.
Reduce Costs and Plan for Long Term Care
The report can help enhance efforts to manage Medicaid expenditures and provide information that can potentially help change the way the benefits program works to be more cost effective. Because such a small group of people accounts for such a large amount of expenditures, it is crucial to begin looking more closely at this data and attempting new ways to solve this problem.
Helping people plan for long term care is one way that the state can avoid significant Medicaid expenditures. Most states now have Long Term Care Insurance Partnership Programs that provide incentives for individuals to purchase this type of insurance and helps the state avoid the high costs that are associated with long term care. The programs involve a Medicaid spend-down waiver for the policyholder to ensure that should they need care for longer than their policy allows, they won’t be forced to deplete all their assets just to qualify for Medicaid.
Encouraging personal responsibility and action for the risk of long term care will help substantially reduce the financial burden that Medicaid currently places on states. Read more about how to plan for long term care or request free information on Long Term Care Insurance by filling out this form.
You can view the full GAO report on Medicaid expenditures here.