The 9 million Americans who are enrolled in full coverage from both Medicare and Medicaid have some of the highest health needs in the country, and account for an outsized proportion of spending in both programs. The programs were not designed to work well in tandem. Enrollees often struggle to get care that could help them thrive and would lead to better outcomes and slower cost growth.

A decade ago, the federal government embarked on the Financial Alignment Initiative (FAI) to test ways to integrate care with effective financial incentives. Despite the promise of the concept, the FAI fell short of creating high-quality, integrated care at scale. 

In a new piece, LDI Executive Director Rachel M. Werner, LDI Senior Fellow Eric Roberts, and LDI Director of Policy Strategy Julia Hinckley outline a path forward for federal and state policymakers based on lessons learned from the FAI, with the goal of raising enrollment in models that efficiently integrate Medicare and Medicaid services. The recommendations, also collected in an LDI policy brief and white paper, are based on discussions with a broad range of national experts. 

Here are six ways to make progress on this high-need, high-cost problem:

1. Create an Integrated Option for all

Congress should require states to offer at least one substantially integrated Medicare-Medicaid option to all qualified individuals and provide the funding to support its creation and administration; Use carrots and sticks to reduce the number of nonintegrated plans serving large groups of this population.

2. Support Improved Plan Choice Resources

Congress and CMS should provide these individuals with meaningful and easier-to-navigate choices for integrated coverage.

3. Implement Continuous Eligibility for Medicaid

Congress should require 12-month continuous Medicaid eligibility for these individuals and help states simplify and streamline Medicaid redeterminations.

4. Authorize Shared Savings in Integrated Plans

With authority from Congress and in consultation with states, CMS should design and implement a shared savings structure that captures the long-term savings or slower cost growth across both programs by using effective financial incentives.

5. Extend Integrated Models to Traditional Medicare Enrollees

CMS should require that all risk-bearing entities (such as accountable care organizations) serving a large number of dually eligible individuals have formal relationships with state Medicaid agencies, clarifying their responsibilities to coordinate care and share information.

6. Hold Plans Accountable to Meet the Needs of Beneficiaries

CMS and states should implement processes to hold plans accountable, including developing and reporting quality measures, establishing ombudspersons, and creating joint oversight of integrated care models.

---

The piece “Toward Integrating Care for Dually Eligible Beneficiaries” was published in JAMA Health Forum on May 16, 2025 by Rachel M. Werner, Julia Hinckley, and Eric Roberts. 

---

Author

---