Here is what you’ll find in this week’s newsletter!

1. Important links 🔗 - the best articles we found this week about the Medicare Market along with links to Jared’s recent LinkedIn posts.

2. Deep Dive 📚 - D-SNPs and C-SNPs: What’s changing for AEP 2025 🔍

3. Compliance Chatter 📢 - Excepted Benefits guidance provided by Colorado and Virginia.

4. Sponsor Snapshot 🚀 - brought to you by Modivcare.

It’s only a 5 minute read, but it will make you 10x smarter.

DEEP DIVE 📚

D-SNPs and C-SNPs: What’s changing for AEP 2025 🔍

A few weeks ago I wrote about the “Wild Medicare Market”. We looked at all the moving pieces leading up to AEP 2025.

But, I missed one important change in the MAPD market heading into AEP.

A smart LinkedIn follower reminded me that special enrollment periods (“SEPs”) for Dual-eligible special needs plans (“D-SNPs”) are changing in 2025.

And another follower mentioned that C-SNPs will be a big focus area going forward.

Then, last week, Humana’s CFO mentioned their D-SNP plans were not facing the same profitability headwinds as some of their other plans (link).

So, this weeks deep dive focuses on D-SNPs and C-SNPs.

1. What are they?

2. What does current enrollment look like, and how has it changed?

3. What is changing for D-SNP special enrollment periods in 2025?

4. What is the impact?

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What are D-SNPs and C-SNPs?

We’ve written two deep dives on this topic already, so check those out for more info (link, link).

But as a reminder.

Special Needs Plans (SNPs): SNPs are a subset of Medicare Advantage plans designed to meet the specific needs of certain populations.

The two largest subsets are D-SNPs and C-SNPs.

Dual-Eligible SNPs (“D-SNPs”): individuals eligible for both Medicare and Medicaid.

It’s important to note that there are 3 types of D-SNPs (this will be important when discussing the changes to special-enrollment periods):

• Coordination-Only D-SNPs (CO): provide Medicare-covered services and are required to coordinate the delivery of benefits with the Medicaid program, contract with state Medicaid programs, and notify states when enrollees are admitted as an inpatient.

• Highly Integrated D-SNPs (HIDE) must meet the requirements of COs and must also have a Medicaid plan operating in the same counties as the D-SNP. The carrier provides both Medicare and Medicaid services, but there is no requirement that people enroll in both plans.

• Fully Integrated D-SNPs (FIDE) must meet the requirements of COs and must also offer an aligned Medicaid plan that integrates the Medicare and Medicaid benefits. Medicare pays the plan for Medicare-covered services and Medicaid pays the plan for Medicaid-covered services.

Chronic SNPs (“C-SNPs”): C-SNPs cater to individuals with one or more specific chronic conditions (cancer, cardiovascular disorders, stroke, etc.), offering specialized care and benefits to manage their health more effectively.

Because both D-SNPs and C-SNPs cover a higher risk population, and the intent is to provide better care leading to better outcomes, the cost associated with covering these members is significantly higher.

And therefore, the revenue that payers generate to cover these populations is also significantly higher leading to the potential for higher profits.

This is why there has been, and will continue to be, focus on growing and retaining membership on these plans.

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What does current enrollment look like, and how has it changed?

Overall, D-SNP and C-SNP account for 6,734,303 enrollees in August 2024.

Both segments have outpaced non SNP growth over the past 3 years, with C-SNP accelerating this year.

The typical Large carriers have the largest share of D-SNP enrollees.

With United, Humana and Elevance making up the majority share of C-SNP enrollees.

This does vary by state. For example, SNP enrollment by Carrier in CA looks quite a bit different.

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What is changing for D-SNP special enrollment periods in 2025?

First, the long term goal of CMS is to move more individuals to D-SNP plans where both the D-SNP and Medicaid benefits are with the same organization.

As part of that goal, special enrollment periods are changing for D-SNPs in 2025.

[For deeper analysis of the changes check out these two sources (link, link).]

Today, all D-SNPs have a quarterly special enrollment periods (“SEP”).

This means all D-SNP enrollees can change plans every quarter. The result is that there is significant switching happening in the D-SNP population throughout the year.

In 2025, the quarterly SEP goes away, and a new monthly SEP is introduced, but only for a subset of D-SNPs.

The new monthly SEP is only for the following scenarios:

1. All D-SNPs can disenroll from MA and go to Traditional Medicare / Stand-alone PDP (one time per year)

2. Full-Benefit D-SNPs can enroll or change between aligned or fully integrated plans

   1. Importantly, partial-benefit D-SNPs no longer have SEPs

      … AND….

   2. Coordination only D-SNPs no longer have SEPs

From a number standpoint, here is what that means.

• Currently, all 5,949,230 D-SNP enrollees can switch every quarter.

• Under the new rules only a subset of those would be able to switch.

  • ~2.04 million who are estimated to be fully-eligible and in the HIDE or FIDE plans will be able to switch monthly

  • ~the 2.7 million who are fully-eligible, but in a Coordination Only plan will be able to switch during the year, but only if they are switching to a HIDE or FIDE D-SNP plan

  • ~1.2 million would not have a SEP.

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What is the impact?

Here are my thoughts on what this means as we head into AEP.

1. Plans with Medicaid contracts and D-SNP plans in the same state will gain more market share

   1. The new SEPs favor FIDE and HIDE D-SNPs.

2. Over time there will be fewer D-SNP plans available

3. Payers that do have D-SNPs will be competing to gain and keep market share

   1. Because there will be fewer D-SNP plans, those that are in the market will be trying to attract and retain members. So, if there is an area where benefits actually increase this AEP, it could be here.

4. There will be fewer D-SNP sales opportunities throughout the year

   1. As already discussed, fewer D-SNP enrollees will be eligible for SEPs

   2. In addition, those that are eligible for a monthly SEP will have fewer switching options

5. But, that also means there will be less switching/better retention on these plans going forward.

   1. For Coordination only D-SNPs, switching can only happen during AEP & OEP (unless switching to a FIDE or HIDE.

6. C-SNPs will be the new area of potential growth for payers.

   1. Based on recent growth, and new SEPs for D-SNPs, will C-SNPs be the new frontier for plans in the coming years?

Okay, that’s all for this week. I hope it’s helpful!

If you’re ready, here are some ways we can help you:

• Newsletter Sponsorship opportunities: Promote your product or services to leaders in the Medicare space. Let’s discuss. (link)

• Market Research: Reports that help you wrap your arms around the Senior focused insurance markets. (link)

• Consulting: We can help you develop new insurance products for the Medicare market, appraise your books of business, and keep you compliant. Let’s discuss. (link)