As Special Needs Plan Market Booms, Can I-SNPs Catch Up?

Even as 2025 shapes up to be a year of service area reductions and product reshuffles, Medicare Advantage insurers are still making big investments in Special Needs Plans (SNPs). There are 137 net new SNP plans for 2025, according to Clear View Solutions, LLC’s analysis of the 2025 MA and Part D landscape files. Nearly 7 million people are currently enrolled in SNPs, and the majority are dually eligible for Medicare and Medicaid, according AIS’s Directory of Health Plans (DHP). CMS expects SNP membership growth of more than 8% in 2025. Pursuing growth in SNPs — particularly Dual Eligible SNPs (D-SNPs) and Chronic Condition SNPs (C-SNPs) — may help payers improve their margins after a challenging year for MA. SNP enrollees typically have a higher risk profile than other Medicare beneficiaries, which translates to higher reimbursement for payers. The Medicare Payment Advisory Commission (MedPAC) in its 2023 status report to Congress noted that D-SNPs offered for-profit payers pretax margins of 6.4% vs. 2.8% for all MA plans. One plan type is being left out from the SNP boom, however. The Institutional SNP (I-SNP) market is shrinking for the second year in a row, down to 162 plans from a high of 191 in 2023. Market leader UnitedHealthcare is offering 28 fewer I-SNPs for 2025, with Elevance Health, Inc. and Humana Inc. also dropping plans. I-SNPs, which are designed to provide enhanced primary care coordination through on-site practitioners, typically serve long-term residents of nursing homes, while Institutional Equivalent SNPs (IE-SNPs) may enroll non-residents that require an institutional level of care (though this places extra assessment burdens on payers). The share of long-stay nursing home residents enrolled in I-SNPs increased from 2.2% in 2006 to 8.8% in 2021, according to a study published Oct. 7 in Health Affairs. Despite this growth, nearly 70% of nursing homes had no residents enrolled in I-SNPs in 2021, and over 60% of U.S. counties lacked any I-SNP availability. There are several reasons payers may find the market unappealing, from regulatory burdens to limited membership potential within existing provider networks. “Converting current MA members with likely low premiums and extra benefits to an I-SNP is challenging,” Stephen Wood, co-founder and partner at Clear View wrote in an Oct. 4 white paper. “Many residents are dually eligible [for] Medicare/Medicaid, where Medicaid enhanced benefits may already be offered. Other MA options like chronic disease SNPs may be increasingly interested in enrolling residents. Nursing home residents are not exclusively the domain of I-SNPs.” The nursing home population itself is shrinking — down more than 200,000 residents over the past decade — noted Wood. Technological advances have made it easier for seniors to age in place, and many MA plans offer supplemental benefits that address in-home care needs. Nevertheless, the in-home supplemental benefits currently offered by I-SNPs, IE-SNPs and C-SNPs are very limited, observed Wood in a follow-up white paper. Clear View’s analysis of the 2024 landscape shows that most of these benefits involve caregiver telephonic or digital coaching. “Those few that offer genuine benefits are very limited — 20 to 60 hours per year or a maximum of $15 a month,” while some “require hospital or skilled nursing home discharge to access,” meaning they would have had to originate as skilled care, he wrote. Given that qualifying IE-SNP enrollees have to be certified as requiring nursing home (NH) level of care based on their medical condition, “it would seem that this type of SNP would be the most likely to offer an in-home Medicare benefit,” Wood suggested. In a late-stage effort to sway senior voters and their “sandwich generation” caregivers, Vice President Kamala Harris in October proposed a Medicare at Home benefit. She lost the presidential election to Donald Trump, who included directing “resources back to at-home Senior Care” and reversing “disincentives that lead to Care Worker shortages” in his plans to protect seniors. “But only one offered the benefit in 2024 and it is limited to 40 hours per year,” lamented Wood. “Another I-SNP offers a similar benefit but requires a hospital or NH discharge to trigger. The remainder don’t offer any in-home benefit. Perhaps the assumption is that IE-SNP members will mostly be duals and this would be covered by Medicaid. This also may explain the very low enrollment of IE-SNPS. There is no money in the current MA benchmarks to cover this supplemental benefit.” Wood does not think that I-SNPs are a lost cause, however, pointing to Humana’s continued partnership with Longevity Health as a bright spot. The co-branded Humana Together in Health I-SNP will be available in eight new states for 2025. Longevity currently serves about 5% of the I-SNP market, according to DHP.