According to the Centers for Medicare and Medicaid Services (CMS), in 2008 there were an estimated 9.2 million individuals who were eligible for and enrolled in both the Medicare and Medicaid programs (commonly referred to as “dual eligibles”). Two-thirds of dual eligibles qualify because they are over age 65, while the other third qualify because of a disability. Dual-eligible beneficiaries typically have multiple chronic conditions that require a higher level of care and result in increased spending relative to other Medicare and Medicaid beneficiaries; however, their care is not usually coordinated. Policymakers have expressed concern that the lack of coordination between the two programs results in higher costs and poorer health outcomes than would be achieved if Medicare and Medicaid services were better integrated.

Approximately 10 million American seniors and individuals with disabilities need long-term services and supports (LTSS), and the number is expected to increase to nearly 21 million by 2040. Private long-term care insurance represents only a fraction of long-term care financing, due to a host of issues ranging from the high cost of insurance premiums to concerns about the high rate of coverage denials. Medicare only covers short-term skilled nursing care services and home health services, and Medicaid, the primary payer of LTSS (almost 50%), covers a range of services, but is only available to low-income individuals with disabilities. In the Patient Protection and Affordable Care Act (ACA), Congress addressed the long-term care needs of the elderly and disabled by making a number of changes in Medicaid coverage of home and community based services, and by establishing the Community Living Assistance Services and Support (CLASS) program, a voluntary, federally administered health insurance program designed to assist eligible individuals in purchasing long-term community living services and supports.