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Our Take

Using SNPs to cost-effectively address senior care

30 Minute Read

Medicare Advantage Special Needs Plans (SNPs) are currently the fastest growing type of Medicare Advantage (MA) plan but the least well-known. Despite their small size, these plans have a proven record of producing better outcomes for their target populations than traditional fee-for-service (FFS) Medicare or standard Medicare Advantage (MA) plans. As such, they are becoming an increasingly central part of CMS’ broader efforts to address health equity in the senior care market.

Read on for our take on how the rapid growth of SNPs will impact the health care industry as well as specific industry stakeholders.


What are special needs plans?

Medicare Special Needs Plans (SNPs) are a type of Medicare Advantage coordinated care plan designed to provide targeted care to older adults with specialized care needs.

More on caring for seniors

Explore the collection of resources that our team has developed to help you understand how the industry is currently caring for older adults (ages 65+), why change is essential, and how industry stakeholders can collaborate to build a better care model for seniors.


About SNPs

Typical target market for SNPs

Medicare SNPs limit membership to people with specific diseases or characteristics. The plans tailor benefits, provider networks, and drug formularies to best meet the specific needs of their unique member population.

Types of SNPs

There are four types of SNPs:

  • Chronic condition SNPs (C-SNPs): Serve people with certain severe chronic conditions (e.g., heart disease, diabetes, dementia, etc.)
  • Institutional SNPs (I-SNPs): Serve people residing in nursing homes
  • Institution-equivalent SNPs (IE-SNPs): Serve those requiring care equivalent to that offered in a nursing home but who reside outside such a facility
  • Dual-eligible SNPs (D-SNPs): Serve people covered by both Medicare and Medicaid

The vast majority (88%) of people enrolled in SNPs are dual-eligibles (D-SNPs), while those in C-SNPs account for 10% of all SNP enrollees, and those in I-SNPs account for 2%.

Common characteristics of SNPs

  • SNP beneficiaries tend to have more chronic conditions than those enrolled in FFS Medicare or traditional MA.
  • SNP beneficiaries are increasingly and disproportionately lower-income Black and Latinx members of the U.S. population.
  • SNP plans are more profitable, on average, than standard MA plans.

The conventional wisdom

SNPs are one of the best tools the health care industry has to manage care for seniors with the most complex care needs, but awareness of and enrollment for these products remain limited despite their rapid growth. Senior care organizations that have either entered the SNP market themselves or are partnering with SNPs are increasingly enthusiastic about their utility and financial benefits. Senior care organizations that don't risk entering the SNP market risk being left behind as SNPs become more popular.

Most older adults are covered by traditional Medicare, but MA penetration is growing.

America’s older adult population is growing, living longer, has more chronic conditions, and will be more financially unstable than in years past. This has led to increased utilization of the health care system and increased costs that accompany it. In the past, most older adults have relied on traditional FFS Medicare to cover health costs. However, traditional Medicare has higher premiums than MA and covers mostly acute care services.

Older adults want to decrease their expenses, add more benefits like transit and food stipends, and be able to access support to help them age in place for as long as possible. These factors are leading to growth in the number of (and enrollment in) Medicare Advantage products, particularly those targeting high-need populations. In 2021, 42% of older adults had an MA plan compared to 48% with a traditional Medicare FFS plan, and experts expect MA penetration continues increase. By 2030, more than half of older adults are expected to be enrolled in an MA plan.

SNPs are the fasting growing type of MA plans.

Unlike traditional Medicare or standard MA plans, SNPs are designed to better coordinate an older adult’s care by following a detailed Model of Care (MoC) that delineates how each patient’s care will be coordinated. SNPs also tailor their benefit package to meet the complex care needs of their specialized population. SNPs are the smallest MA product by enrollment but have been growing exponentially since 2010, with more SNPs available in 2022 than any year since they were authorized. To put into perspective just how quickly SNP offerings are growing: the number of available SNP plans in 2022 is more than double the number of plans available in 2017, and with 10,000 Americans turning 65 every day until 2030 SNP growth is not expected to slow anytime soon.

Another factor driving this robust growth in the SNP market is their potential for attractive financial returns. The total annual bonuses paid to Medicare Advantage plans has nearly quadrupled, rising from $3 billion in 2015 to $11.6 billion in 2021, and SNPs tend to generate even higher returns than typical MA plans. This rise in bonus payments across MA can be attributed mostly to two factors:

  • Growth in the number of enrollees on Medicare Advantage plans
  • A stark increase in the number of plans receiving bonuses for meeting certain Star Rating thresholds—CMS reports that approximately 90% of people are currently in an MA plan that will have four or more stars in 2022

C- and IE-SNPs have the greatest challenge. The geographic dispersion of their members makes it harder to shape outcomes compared to I-SNPs, whose members are in long-term care facilities. C- and IE-SNP operators also face a greater challenge aggregating risk than D-SNP operators, who often have access to a known pool of potential members (Medicaid).


Our take

Through our research on the topic and conversations with thought leaders on special needs plans, we have uncovered the following three insights:

1. Low awareness of SNPs among senior care organizations will limit their ability to proactively prepare for the effects of SNP growth.

Outside of plans and people involved in long-term senior care facilities, most organizations and individuals (especially MA brokers and patients) in the senior care market have minimal or no awareness of SNPs or their growth potential. But the growth of SNPs will impact every sector of the industry, from providers and patients to health systems, vendors, and residential operators. Increased enrollment in SNPs will shift how and where older adults will receive their care, leading to downstream impacts across the industry.

2. SNPs are one of the best tools to manage care for older adults with complex care needs—but only in certain geographic areas.

Geographic dispersion of beneficiaries is the greatest challenge for managing SNPs, especially D-, C-, and IE-SNPs. In these plans, beneficiaries can live anywhere in the community, making it more difficult for care navigators and PCPs to manage, coordinate, and track their care. This is especially true for beneficiaries living in rural and lower-income urban areas where access to providers and social determinants of health (SDOH) resources is more challenging. Because that access is limited, many older adults living in those areas will not have the support they need to safely age in place, such as supplemental benefits that support healthy diet, transportation access, and in-home modifications (e.g., grab bars or an accessible shower). This, along with the limited availability of C- and IE-SNP plans in areas where care is more difficult to access, will create a geographic divide of which older adults will be able to age safely in their homes and which will have to move into a facility with more structure to support their care.

3. Growth of I-SNPs relies on long-term care staffing.

The role of nursing homes and long-term care will change steadily over the next 10 years, with a shift toward short-term stays and away from longer-term senior care housing (except for niche, complex cases). The relative dearth of workers in long-term care facilities will likely be the biggest barrier to growth for I-SNPs, which are currently the fastest growing segment of SNPs.

IE- and C-SNPs will help enable the shift toward shorter-term stays in long-term facilities, because the plans will allow providers and senior residence owners to focus resources necessary for acute-level senior care outside of traditional acute-care locations. The ability of SNPs to redirect resources to lower-acuity settings will be limited by the availability of senior care clinical and non-clinical workers, putting additional pressure on that already stressed workforce. SNPs will therefore not “solve” the senior care workforce challenges, though they will allow for a redistribution of older adults across different types of senior residences.


Four challenges that will impact SNP growth

The rest of this report explores how the following challenges would impact SNP growth and the ripple effects onto the health care industry overall. We will also detail the specific impacts of SNP growth on industry stakeholders.

  • Challenge

    Managing geographically dispersed, complex care needs

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  • Challenge

    Streamlining care coordination for C- and D-SNP members

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  • Challenge

    Redistributing long-term care staff

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  • Challenge

    Navigating regulatory changes to SNP coverage

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How will SNP growth impact industry stakeholders?

The growth of SNPs will create ripple effects throughout the health care industry. In the following pages, we’ll look at specific impacts for health care stakeholders.

Health plans

  • SNPs generally offer the broadest supplemental benefit packages among all MA plans, and the push to expand them further will continue in response to the need to further shape SDOH and improve outcomes.
  • SNP operators are increasingly expressing frustration that they are forced to operate under most of the same star rating metrics as other MA plans. Expect CMS to further tweak SNP star rating metrics in the future to better evaluate the effectiveness of their models of care and health equity efforts.
  • While the biggest payers will face stiff competition in the I-SNP market, they will continue to dominate the D-SNP market, where they can take advantage of their bigger organizational capacities.


  • Long-term care providers are currently creating I-SNPs at a faster pace than plans. The pace for LTC providers will accelerate as more providers learn to use SNPs to increase their revenue and reduce the administrative hassle of juggling the needs of multiple payers.
  • While most SNPs are using RNs as the “traffic cop” for their care coordination teams, there will be a shift to using more APPs in that role due to their relative availability (compared to PCPs) and ability to make more clinical decisions than RNs.
  • The growing popularity of SNPs will put more pressure on PCPs’ time, given SNPs’ care coordination requirements. Care team design will be key to relieving some of that burden.


  • SNPs will begin to incorporate pharmacists more closely into their care management teams to avoid rehospitalizations due to adverse drug events.
  • To penetrate areas with fewer providers, SNPs will increasingly rely on telepharmacists as part of their telemedicine outreach.

Senior housing

  • SNPs are already enabling creative collaborations between real estate investment trusts (REITs), providers, and plans around ways to scale complex care delivery within lower acuity residential settings.
  • Assisted living facilities are beginning to work with C- and IE-SNPs to retain residents even as their care needs increase.
  • Retirement communities have also begun to partner with SNPs to help separate out the cost of housing from the cost of care, in order to make the communities more attractive to younger retirees to start managing complex care as soon as possible.


  • With the proliferation of smaller I-SNPs led by providers and facilities will come greater CMS oversight. Current CMS regulations don’t require the same level of outcomes reporting for plans with small enrollments as they do for bigger plans (those that receive star ratings), but CMS is being pressured to conduct more oversight on these smaller, regional I-SNPs.
  • Even though the financial burden on the federal government from D-SNPs will increase alongside the increase along with the increase in the dual-eligible population. But it will become increasingly difficult for the federal government to lower the high reimbursement rates for D-SNPs because private payers would likely pull out of many underserved communities where care coordination and delivery are more difficult.

Parting thoughts

With the aging of baby boomers and their desire to avoid institutional settings, SNPs will play an increasingly important role in the management of patients with complex conditions across a wide variety of settings.

SNPs are useful tools for addressing the needs of older adults with complex conditions because of their emphasis on care coordination. However, our ability to use this tool is challenged by low awareness of the product and geographical dispersion of members.

We are starting to see some industry moves to address the low level of SNP awareness, but there will need to be much more concerted effort by payers to enroll SNP-eligible members in these plans to help older adults get the care they need in the spaces they want to live. The ability of SNP operators to address the competing challenges of finding enough SNP enrollees to protect them from risk, while shaping their provider and SDOH experiences to provide better financial and health outcomes, will determine which organizations succeed in this market.

Ultimately, we will see unpaid caregiving play a larger role for those who can’t afford, don’t want, or can’t access the complex care coordination their situation may warrant. Some will want to age in place even if that means limiting their care and lifespan, while many others will age in more blended senior residential situations where their care can be more easily coordinated.

For additional information about caring for an aging population, check out

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