The Role of Medicare's Inpatient Cost-Sharing in Medicaid Entry

Examining Medicaid Participation and Medicaid Entry Among Senior Medicare Beneficiaries With Linked Administrative and Survey Data

Because Medicare beneficiaries can qualify for Medicaid through several pathways, duals who newly enroll in Medicaid may have experienced various financial and/or health changes that impact their Medicaid eligibility. Alternatively, new enrollment could reflect changes in awareness of the program among those previously eligible. Using monthly enrollment data linked to Health and Retirement Study survey data, we examine financial and health changes that occur around the time new Medicaid participants enter the program, and we compare those with changes experienced by both those continuously enrolled in Medicaid and those not enrolled. We find that Medicaid entry is often timed with a marked increase in out-of-pocket medical expenses, a substantial decrease in assets for some, and increases in activities of daily living (ADL) limitations. We also observe financial changes among persons continuously enrolled in Medicaid. Our results inform discussions about Medicaid eligibility policies and potential gaps in the protection that Medicaid offers from financial risk.

Financial Stress and Risk for Entry into Medicaid Among Older Adults

Background and Objectives

Spending in the Medicaid program is a significant concern to both state and federal policy makers. Medicaid spending is driven by program enrollment and services use. Older adults with high health care needs incur a disproportionate proportion of program spending. This analysis identifies factors that place older Medicare beneficiaries at increased risk for entering into Medicaid.

Research Design and Methods

We use multinomial logistic regression and the 2011–2017 National Health and Aging Trends Study (NHATS) to examine the risks among older Medicare beneficiaries for entering into Medicaid over a 6-year follow-up period. We examine both time-invariant and time-varying factors to measure the impact of social and health and functioning changes at older ages.

Results

The risk of entry into Medicaid was higher for older adults who relocated to a nursing home (relative risk ratio [RRR]: 7.75; 95% confidence interval [CI]: 5.33–11.26) or other residential care setting (RRR: 1.36; 95% CI: 0.96–1.92) compared to those who remained in traditional community settings. Older adults who reported skipping a meal in the last month because there was not enough money to buy food were 2.4 times (95% CI: 1.10–5.21) more likely to enter Medicaid than those who did not. Similarly, older adults who reported not having enough money to pay household utility bills in the last year were 1.89 times (95% CI: 1.08–3.30) more likely to enter Medicaid.

Discussion and Implications

Study findings suggest that trouble paying for basic needs increases the risk of entry into Medicaid. Further research is required to examine whether addressing these needs through improved access to social services that enable older adults to live safely in their home may delay or mitigate entry into Medicaid.