The past few years of high utilization, shrinking reimbursement rates and enrollment challenges have made identifying sustainable growth opportunities an urgent priority for Medicare Advantage plans.
The dual-eligible segment, representing individuals insured by both Medicare and Medicaid, has become the industry’s panacea, with a population of 13 million expected to grow by 6% annually through 2028. The opportunity to scale in this fast-growing, well-reimbursed space offers a promising path forward for health plans and providers alike to stabilize their financial performance and expand market share.
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Realizing that promise, however, will require transforming how care is delivered for a chronically ill, often disabled and socioeconomically vulnerable population – people that health plans and providers have traditionally had difficulty engaging and retaining consistently over time.
Historically, our healthcare system has failed to effectively meet the many and frequent needs of dually eligible individuals. As a physician, I’ve seen firsthand the lived experiences of those who have had to navigate two separate, disjointed systems of coverage while being both sick and economically marginalized.
In 2021, fewer than 5% of dually eligible individuals received their benefits through integrated Medicare and Medicaid coverage arrangements. Despite the real value that these models can offer, only a small portion of dually eligible members receive care from a provider operating under a value-based or outcomes-aligned financial structure.
This means the burden of managing care — juggling different sets of providers, understanding complex eligibility criteria and navigating coverage rules — falls solely on the dually eligible enrollee and family members, while payers and providers operate in silos, using inflexible tools like utilization management and network design within fee-for-service care delivery models.
As a result, dually eligible individuals often skip necessary appointments because they don’t know which part of their plan is paying for it. Their chronic conditions can quickly spiral out of control because neither their plan nor their provider is incentivized to offer coordinated support. Material conditions like lack of stable housing, transportation or cell phone access make them hard to reach, even harder to continually engage, and especially susceptible to preventable health crises.
Every year, many enrollees choose to switch to a different health plan, lured by the promise of better coverage or easier access, but ultimately in search of a care experience that delivers value and helps them achieve their goals.
It’s no surprise, therefore, that costs in this segment continue to rise unsustainably, even as the number of dual eligibles grows. The current administration’s intensified focus on cost containment makes the imperative to improve care for dually eligible individuals even more urgent.
And yet, the opportunity to do well financially while doing right by this incredibly vulnerable population still exists. Plans are increasingly focusing on growing their footprint in this segment as a means of stabilizing their overall Medicare Advantage performance and expanding market share in a competitive environment. Providers recognize that as the U.S. population ages with more chronic conditions, the complexity and size of their patient population will grow in parallel.
The market is likely to experience much more acute growth in the near term. A federally mandated initiative is requiring greater integration of Medicare and Medicaid benefits for dually eligible individuals – a move that will push health plans to better align services across both programs and create more seamless care experiences.
Many health plans are already leaning heavily into the dual-eligible opportunity in front of them, but few fully appreciate that succeeding in this space will require a fundamental transformation of the status quo. Success in this market will depend on health plans’ ability to retain members by improving care delivery and the overall experience while bending the trend in rising costs.
Recent changes to CMS’ risk adjustment methodology make this even more important. In the past, health plans could improve their bottom line by submitting more diagnoses. Now, financial success relies more heavily on actually improving outcomes. In this new world, health plans and at-risk providers that are prepared with an engagement strategy and a willingness to move quickly will come out on top.
The engagement equation starts with a localized approach to care – in patients' homes, with digital tools and community clinics. An accessible, multi-modal approach to care delivery is the foundation on which plans can forge stronger member relationships, opening an avenue to address social drivers of health and deliver coordinated, comprehensive care. Keeping healthcare local, accessible and multidisciplinary will help to ensure members stay engaged in their health journey.
Obviously, this is easier said than done. The dually eligible population is not a monolith; these are high-acuity, high-risk, heterogenous communities with diverse needs. Traditional primary care providers are often too rigid to meet the long-term needs of these patients. One-dimensional vendors are ill-equipped to treat members with multiple chronic and behavioral health conditions. Management service organizations are too removed to keep dually eligible members engaged.
These are the structural challenges that have historically hindered value within the dual-eligible segment. Their shortcomings offer lessons that health plans can’t ignore moving forward.
Improving engagement across the healthcare system will require close partnerships with community providers who understand the realities of members’ lives and can deliver easily accessible, comprehensive care that accounts for medical, behavioral and social needs. Without the flexibility of value-based care arrangements, the costs of this level of care can quickly spiral out of control.
The health plans that succeed in the coming years will be those that embrace an engagement-through-excellence approach to care delivery. Engagement opens the door, but it’s what follows that creates lasting value. Plans that fail to offer population-based, whole-person care for their dually eligible members will lose them to competitors who can.
Dr. Toyin Ajayi is co-founder and CEO of New York-based Cityblock Health.
