In 2020, approximately 12.3 million people were enrolled in both Medicare and Medicaid. Many of these dually eligible beneficiaries, or dual eligibles, have multiple chronic conditions and physical and developmental disabilities. About 40% of dual eligibles have also been diagnosed with at least one mental health condition.
As a result, dually eligible beneficiaries often need:
- Ongoing medical care
- Long-term services and supports
- Prescription drugs
- Behavioral health services
- Supplemental services related to social determinants of health.
Medicare and Medicaid benefits often lack coordination, resulting in fragmented care. In addition, the programs are not well aligned in terms of financing and operational policy. Improving how Medicare and Medicaid integrate care and financing can potentially improve the health of dually eligible beneficiaries and reduce federal and state spending on their care.
The Financial Alignment Initiative’s Role in Improving Health Care for Beneficiaries and Reducing Health Care Costs
In 2011, the Centers for Medicare & Medicaid Services (CMS) launched the Financial Alignment Initiative (FAI) to enhance the quality of care provided to dually eligible beneficiaries, improve population health, and reduce or maintain Medicare and Medicaid spending. The demonstrations aim to develop person-centered care delivery models that integrate medical and behavioral health services and long-term services and supports for Medicare-Medicaid enrollees.