Integrating care for people dually eligible for Medicare and Medicaid has the potential to improve both health outcomes and care experiences for this population, which often has complex physical, behavioral health, and long-term care needs. By aligning Medicare and Medicaid programs, integrated care reduces fragmentation that can undermine quality and increase costs.

Under the federal Financial Alignment Initiative (FAI), authorized by Congress in 2010, several states tested a capitated model integrating Medicare and Medicaid services. As of January 1, 2026, seven states currently operating capitated FAI demonstrations — Illinois, Massachusetts, Michigan, Ohio, Rhode Island, South Carolina, and Texas — will transition to integrated dual eligible special needs plan (D-SNP) programs.

This fact sheet, developed by the Center for Health Care Strategies in partnership with the Bipartisan Policy Center, highlights key design elements of these states’ new programs, as well as additional details.