Medicare Advantage Special Needs Plans: Issue Brief

Special Needs Plans (SNPs) are a specialized type of Medicare Advantage plan designed to serve the health care system’s fastest growing population – frail, disabled, and chronically-ill individuals.1 Over 4 million Traditional Fee-For-Service (FFS) Medicare beneficiaries in 2014 had six or more chronic conditions, representing 51% of FFS Medicare spending.2 SNPs enable Medicare Advantage plans to target care to high risk beneficiaries. SNP Medicare Advantage plans tailor care to the needs of a targeted population with complex conditions. SNPs are designed to manage and treat beneficiaries through approved Models of Care. The program aligns incentives and contains costs by emphasizing primary care, chronic care management, and integrated health care services.

Over 18.5 million Medicare eligible beneficiaries have chosen Medicare Advantage, and over 2.4 million of those beneficiaries are in SNPs.3 SNPs are required to offer all Medicare Part A and B benefits and serve beneficiaries who are dually eligible for Medicare and Medicaid, have certain chronic conditions, or receive long-term care in an institutional setting such as a Skilled Nursing Facility. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) extended the SNP program through December 31, 2018.


The brief offers the following policy recommendations:

  • Permanently Authorize the SNP Program
  • Provide SNPs with More Flexibility in Benefits
  • Provide Beneficiaries with More Information About SNPs
  • Ensure Effective Implementation of the Model of Care
  • Strengthen the CMS Medicare-Medicaid Coordination Office (MMCO)
  • Ensure Accurate Payment and Quality Measurement for SNPs
  • Utilize Demonstration Authority to Test Community-Based Institutional SNPs (I-SNPs)
  • Update Report to Congress Evaluating SNPs Impact on Cost and Quality of Beneficiary
  • Care
  • Utilize Demonstration Authority to Simplify Criteria for Institutional Equivalent SNPs
  • (IE-SNPs)
  • Reinstate Seamless Conversion with Appropriate Protections
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