State Medicaid Programs Face Increased Spending On Medicare Premiums

Medicaid covers Medicare premiums and out-of-pocket expenses for low-income older adults, who make up a growing segment of the US population. Using administrative data, we characterized the change in the number of beneficiaries dually enrolled in Medicare and Medicaid and corresponding changes in Medicaid spending on Medicare Part A and Part B premiums during the period 2013-24. The number of dually enrolled beneficiaries increased by 27 percent, while Medicaid spending on Medicare premiums nearly doubled, primarily as a result of growing Part B premium spending. We estimated that at least half of the growth in Part B premium spending was attributed to the increasing per beneficiary Part B premium cost over time, with a smaller portion attributed to rising enrollment. Dual enrollment per capita increased in all but nine states. State Medicaid programs face a greater burden from rising Part B premium costs, yet they have little opportunity to control this spending without federal action.