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 = 333 240) comprised subgroups of community well (64.1%, n = 213 667), HCBS users (15.0%, n = 50 095), BH users (15.2%, n = 50 509), and NH residents (7.5%, n = 24 927). 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 $26 874 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 $19 734 PPY with the lowest portion (38.5%) of spending contributed by Medicaid ($7605). Among NH residents, overall spending ($68 359) was highest, and the highest portion of spending contributed by Medicaid (70.1%). Key components of spending among HCBS users’ combined total of $40 069 PPY were clinician services on carrier claims ($14 523) 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.