$500 to $620 Billion Could Be Saved by Modernizing Medicare and Medicaid

February 03, 2017

A recent report from UnitedHealth Group finds that $500 billion to $620 billion could be saved by modernizing Medicare and Medicaid. The report highlights the 10-year projected federal savings, for fiscal years 2017 through 2026, for the following initiatives:

Modernize Original Medicare for Non-Dual Fee-for-Service (FFS) Beneficiaries

Original Medicare can be significantly improved to deliver quality care and better value through the infusion of value-based care management programs, greater empowerment of beneficiaries, and improved infrastructure. Modernizing Original Medicare to address the key challenges facing the program requires advancing and scaling best practices, fostering innovation, and aligning incentives to ensure beneficiaries receive high-quality care and an improved consumer experience.

  • Potential savings: $377 billion - $468 billion

Enroll Dual-Eligible Beneficiaries in Managed Care Plans That Integrate Their Medicare and Medicaid Benefits

Under a modernized approach to serving dual eligibles, health plans would provide combined Medicare and Medicaid benefits, including all acute and long-term care services, thereby addressing the full range of duals’ complex care needs.

  • Potential savings: $82 billion - $101 billion

Enroll the 15 Percent of Non-Dual Medicaid Beneficiaries Currently in FFS Into Managed Care Plans

In a modernized approach to delivering Medicaid services, states would achieve savings and improve care through continuing and expanding their partnerships with managed care plans. Health plans have the capacity to address the complex care needs of Medicaid beneficiaries with disabilities, chronic illnesses, and behavioral health conditions.

  • Potential savings: $28 billion - $35 billion

Utilize Predictive Analytics to Reduce Fraud and Increase Payment Accuracy in Both Medicare and Medicaid

Broader application of predictive analytics in the Medicare and Medicaid programs — including the use of tools deployed in the private sector in combination with the public programs’ data resources — would help address unnecessary costs and increased spending in Medicare and Medicaid.

  • Potential savings: $13 billion - $16 billion