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Dual-eligible beneficiaries account for a disproportionate share of Medicare and Medicaid spending owing to their complex medical, behavioral, and social needs. Care for this population presents multiple challenges, in part, because Medicare and Medicaid are distinct programs with conflicting incentives for managing costs, which can result in unintended cost shifting across programs, poor care coordination, and potentially avoidable use.
To address these challenges, policy makers have sought to expand integrated care programs, in which financially at-risk entities (such as managed care plans) coordinate Medicare and Medicaid services, and in some cases, manage costs in both programs. Currently, the predominant model for delivering integrated care is through Medicare Advantage Dual-Eligible Special Needs Plans (D-SNPs), which operate under varying levels of financial integration and accountability.
In 2025, 46 percent of dual-eligible beneficiaries with full Medicaid were enrolled in traditional Medicare. Medicare accountable care organization (ACO) models, in which provider groups take risk for attributed beneficiaries’ Medicare-funded medical costs, served 30 percent of dual-eligible beneficiaries with traditional Medicare in 2025. Yet Medicare ACOs historically have lacked an architecture for financial integration with Medicaid.