Vulnerable Americans are stuck in a Medicare-Medicaid maze. Is a fix in sight?

On Thursday, a bipartisan group of six U.S. Senators will unveil a bill aimed at helping millions of Americans trapped in a special kind of health insurance hell. These people, who are among the country's sickest and poorest patients, are covered by two government health insurance programs — Medicare and Medicaid — yet still struggle to get the care they need.

Their struggles persist despite Medicare and Medicaid combining to spend nearly half a trillion dollars a year — almost $40,000 per person on average — on these patients, who are sometimes called "duals" or "the dually eligible."

"If you can come up with a set of solutions that can save the taxpayer money and make a patient's life better, by golly you've found a sweet spot," the bill's lead author, Sen. Bill Cassidy, R-Louisiana, said in an interview with Tradeoffs.

The bill, known as the DUALS Act of 2024, targets what many experts see as the fundamental source of this system's inefficiency and ineffectiveness: its fragmentation. It will be introduced later today at a press conference by Democratic Senators Tom Carper, Mark Warner and Bob Menendez and Republicans Bill Cassidy and John Cornyn. Sen. Tim Scott, Republican of South Carolina, is also a co-sponsor of the bill.

Right now, to access vital services, most of the 12 million 'duals' are forced to deal with two different insurance plans and decipher two sets of confusing, sometimes conflicting rules. Medicare covers more urgent medical needs like surgeries while Medicaid pays for longer-term services like regular home visits from an aide. This bill aims to remove the patient from the middle of that maze.

The legislation mandates states to offer people at least one single, seamless insurance plan option that manages all of their medical, behavioral and long-term care — combining the Medicaid and Medicare sides of their benefits. Lawmakers hope the move makes care better and more cost-effective.

Senators promise relief to patients stuck in the middle of a $500 billion mess

People qualify as "dually eligible" because of their low incomes and by either having a long-term disability, being over 65 or all three. Any delay to receiving care can take a toll. Bronx resident Saleema Render-Hornsby experienced that firsthand in 2022.

The 34-year-old has spina bifida — a spinal cord issue that limits her use of her lower legs — and her trusty wheelchair nicknamed "the Cadillac" broke down in the middle of a New York City street. Medicare and Medicaid tossed her request for a new chair around like a hot potato.

"I shouldn't be stuck in the middle," Render-Hornsby said. "Why do I have to keep repeating what I need until I'm blue in the face?"

After multiple appeals and her mother buying a temporary chair that caused Render-Hornsby back aches, nerve pain and pressure sores, Render-Hornsby got her chair.

It took 20 months.

Bill's impact in doubt

Today, just north of 1 million duals are enrolled in a plan that's as seamless as the kind outlined in this legislation. The bill requires states to pick a plan from a list of options that would be approved by the federal government.

Industry groups, consumer advocates and academic experts applaud the bill's authors for lighting a federal fire under states to solve this annual half-a-trillion-dollar problem. However, many question if it would achieve the bill sponsors' twin goals of saving taxpayer money and improving patient health.

The legislation is silent on many key technical details like how much health insurance plans would be paid to run these new seamless plans or how plan quality would be measured, they point out.

"We have the opportunity to be transformational and to hold health plans accountable," said Amber Christ, managing director of health advocacy for the nonprofit Justice in Aging. "I don't see this legislation really moving the needle."

One major barrier to the bill's success is that states lack a proven formula to build a super seamless plan. Twelve states have participated in a pilot program created by the Affordable Care Act to test different approaches, but the results over the last decade have been disappointing.

"There are some exceptions, but we have not seen consistent success across states in terms of lowering health care spending or improving outcomes," said Alice Burns, associate director at the health research organization KFF.

A murky marketplace makes better plans hard to find

Perhaps the sharpest critiques are aimed at the bill's failure to clean up the insurance marketplace for duals.

"This legislation adds one more thing to an already confusing landscape," said Allison Rizer, executive vice president at ATI Advisory, a research and consulting firm. "It does not do away with any existing programs."

Some dually eligible people today have as many as 100 local plans to choose from, according to Rizer, who says the thicket of options needs thinning out.

Private insurance companies have flocked to this market over the last decade, lured by higher payment rates and other regulatory changes. The industry now offers nearly 900 different insurance plans nationwide designed specifically for the dually eligible.

That's on top of thousands of standard plans available to all Medicare beneficiaries. Almost all of these plans provide little help coordinating people's Medicare and Medicaid benefits.

"This is what's broken with health care," said Hong Truong who helped her mother enroll in a private Medicare plan designed specifically for dually eligible people. Her mom, who lives in San Jose, Calif., suffers from severe kidney disease.

She still had to deal with two different insurers and neither offered help when Truong needed to find her mom an in-home caregiver who spoke Chinese or Vietnamese — languages that Truong does not speak. She relied instead on relatives to act as recruiters.

The poorly coordinated coverage also left Truong to her own devices when her mom's transportation service repeatedly failed to pick her up from her dialysis appointments. Truong ended up orchestrating drivers via the ride-sharing app Lyft and paying out of her own pocket.

"Everyone just referred me to somebody else," Truong said. "It was all so frustrating."

Aggressive marketing by insurers and brokers only further muddies this marketplace. A survey by the Commonwealth Fund found that, compared to wealthier Medicare beneficiaries, those with low incomes were nearly twice as likely to report being misled by advertisements and feeling pressured by a broker to switch plans.

Rather than clearing out some of the clutter, this legislation instead proposes shepherding people into these new, more seamless plans by automatically enrolling them (with a chance to opt out.) That tactic has done poorly in some states. Instead, their seamless plans have seen low enrollment, and some patients have experienced disruptions in their care.

Cassidy's bill faces an uphill climb

Sen. Cassidy acknowledges that his bill faces slim odds of passing this session. But he believes this population's half-a-trillion dollar price tag and the country's rapidly aging demographics make this problem too big to ignore for much longer.

At a minimum, he believes this bill will help Congress "get comfortable" with this wonky issue and predicts they'll ultimately feel compelled to act. One sign of progress: Senate aides said they expect a hearing on the topic to happen later this year.

If momentum eventually builds then Rizer says lawmakers will face a difficult question about how to make the most of a rare opportunity to help an overlooked population and rein in federal spending.

"Do you go big?" Rizer asked, "Or do you settle for something that's going to kick the can another 10 to 15 years down the road?"

Absent major changes to the bill introduced Thursday, Rizer said, the latter is far more likely.

This story comes from the health policy podcast Tradeoffs. Dan Gorenstein is Tradeoffs' executive editor, and Leslie Walker is a senior reporter/producer for the show, where a version of this story first appeared. Tradeoffs' weekly newsletter brings more health policy reporting to your inbox.

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