States With Medically Needy Pathways: Differences in Long-Term and Temporary Medicaid Entry for Low-Income Medicare Beneficiaries

Medically needy pathways may provide temporary catastrophic coverage for low-income Medicare beneficiaries who do not otherwise qualify for full Medicaid benefits. Between January 2009 and June 2010, states with medically needy pathways had a higher percentage of low-income beneficiaries join Medicaid than states without such programs (7.5% vs. 4.1%, p < .01). However, among new full Medicaid participants, living in a state with a medically needy pathway was associated with a 3.8 percentage point (adjusted 95% confidence interval [1.8, 5.8]) increase in the probability of switching to partial Medicaid and a 4.5 percentage point (adjusted 95% confidence interval [2.9, 6.2]) increase in the probability of exiting Medicaid within 12 months. The predicted risk of leaving Medicaid was greatest when new Medicaid participants used only hospital services, rather than nursing home services, in their first month of Medicaid benefits. Alternative strategies for protecting low-income Medicare beneficiaries’ access to care could provide more stable coverage.