Medicare Special Needs Plans: What Are They and How Do They Work?
Key takeaways:
Medicare special needs plans (SNPs) are a specialized type of Medicare Advantage (MA) plan.
SNPs provide benefits and coordinated care for people who have specific conditions or meet other requirements.
There are three types of SNPs: chronic condition, dual-eligible, and institutional.
Table of contents
If you're eligible for Medicare and have a chronic condition like diabetes, heart disease, or lung disease, you might want to consider a type of Medicare Advantage (MA) plan called a special needs plan (SNP).
There are three types of SNPs: chronic condition, dual-eligible, and institutional. To enroll in one of these plans, you have to prove your eligibility and potentially pay an additional premium.
What is a special needs plan?
SNPs are one of the six types of MA health insurance plans. These plans are offered by Medicare-approved private insurance companies.
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Like all MA plans, SNPs provide coverage that’s equivalent to original Medicare (Part A and Part B). But unlike other MA plans, SNPs offer benefits, such as coordination of medical care, that are tailored to people who need extra assistance. In addition to providing full Part A and Part B coverage, Medicare SNPs must also include prescription medication coverage (Part D) so that members can reliably access their medications.
Although SNPs aren't offered everywhere in the U.S., they are becoming more widely available. Nearly 6 million Americans were enrolled in SNPs in 2023.
What are the three types of special needs plans?
The three types of SNPs — chronic condition, dual-eligible, and institutional — serve different groups of people, as detailed below.
Chronic condition special needs plans
Chronic condition special needs plans (C-SNPs) are designed for people with certain health problems, including:
Cancer (excluding precancer conditions)
Chronic and disabling mental health conditions
Chronic dependence on alcohol and other substances
Chronic lung disorders
End-stage liver disease
End-stage renal disease requiring any mode of dialysis
According to the Kaiser Family Foundation, almost all 2023 C-SNPs enrollees are in plans that are designed for people with diabetes or cardiovascular conditions.
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Institutional special needs plans
Institutional special needs plans (I-SNPs) are designed for people who live in a nursing home or inpatient care facility. There are also plans for people who require a high level of nursing care but still live at home, which are sometimes called institutional equivalent special needs plans (IE-SNP).
Dual-eligible special needs plans
Dual-eligible special needs plans (D-SNPs) are designed for people who qualify for both Medicare and Medicaid, a situation known as dual eligibility. D-SNPs have contracts with state Medicaid programs to help coordinate Medicare and Medicaid benefits for eligible people. Covered services depend on the state and an individual person’s eligibility.
Who qualifies for Medicare special needs plans?
Medicare SNPs are not available to everyone. You can enroll in an SNP only if:
You have Medicare Part A (hospital insurance) and Part B (medical insurance).
You live within the service area of an SNP.
You have a condition or life situation that qualifies you for one of the three types of SNPs listed above.
How are special needs plans different from typical Medicare Advantage plans?
All MA plans provide coverage for hospital and outpatient medical care. Some MA plans — including some SNPs — also offer vision, hearing, and dental care benefits. But SNPs are different because their benefits are designed for plan members’ health conditions and personal circumstances.
For example, people with C-SNPs have access to care coordinators. These coordinators make sure plan members get the information and attention they need to manage their medical condition.
A C-SNP focused on patients with congestive heart failure could feature a drug formulary that includes medications for heart disease. It could also include a network of cardiac specialists or case-management programs for people with heart conditions.
A C-SNP for people with diabetes might have dedicated care coordinators who help members monitor their blood sugar, food intake, and exercise schedule. These coordinators might also set up regular eye and foot exams to help members prevent common problems associated with diabetes.
If you qualify for both Medicare and Medicaid, a D-SNP might offer you access to a care coordinator to help you use your various Medicare and Medicaid benefits. This type of coordinator could assist you with:
Transitions between care in different settings, like the home, a hospital, or a care facility
Connect you to social services agencies
Make sure you receive all the Medicare and Medicaid benefits you’re entitled to
An I-SNPs might provide coverage tailored to people who receive care in a nursing home setting. For example, this type of plan might provide for a nurse practitioner who coordinates care between outside healthcare providers and nursing home staff. Some I-SNPs also cover services like physical exams, lab tests, and prescription medications.
How much do Medicare special needs plans cost compared to original Medicare?
If you enroll in a Medicare SNP and don’t qualify for assistance with premiums, your costs will depend on the specifics of your plan:
Health maintenance organization (HMO) plans: HMO plans generally have the lowest premiums and out-of-pocket costs, but you must use in-network healthcare providers.
HMO plans with a point-of-service (POS) option: These types of HMO plans cover some out-of-network care. But you pay more for out-of-network care than in-network care.
Preferred provider organization (PPO) plans: PPO plans cost more than HMO and POS plans. But they allow you to see out-of-network providers, potentially with a higher copay.
Your costs depend on the healthcare services you need, how often you get them, whether you follow the plan rules, and what the plan charges. But, in general, when you enroll in an SNP, you will likely pay:
Your regular monthly Medicare Part B premium
Any extra monthly premium the SNP charges for Part A and Part B coverage
Any extra monthly premium the SNP charges for prescription medication coverage
Any extra monthly premium the SNP charges for additional benefits
Any deductibles, coinsurance, or copays the SNP requires
If you have both Medicare and Medicaid, an SNP can't charge you more than you'd pay for original Medicare or Medicaid. But it’s a good idea to contact the representatives of any SNPs you’re considering to understand your exact costs before enrolling.
Cost rules for special needs plans
SNPs are required to provide all the benefits of original Medicare, but they have unique rules about costs. Those rules are often complicated. A few to consider are:
SNPs are not allowed to charge more than original Medicare for certain kinds of care, including chemotherapy, dialysis, and skilled nursing facility care.
Each SNP sets its own deductible and copay amounts. So your exact out-of-pocket costs will depend on the plan you choose.
SNPs are allowed to charge higher copays for certain aspects of care, including durable medical equipment and hospital expenses.
D-SNP members automatically qualify for Extra Help — a federal program that’s also known as the Part D Low-Income Subsidy (LIS). With Extra Help, people can get most or all of their prescription medication costs covered, depending on their income, assets, and eligibility for other programs.
When can you enroll in a Medicare special needs plan?
You can enroll in an SNP during:
Initial enrollment period: When you first become eligible for Medicare, you can enroll in an SNP during your 7-month initial enrollment period. This period includes the 3 months before and after you turn 65 and the month you turn 65.
Annual enrollment period: From October 15 to December 7 each year, you can enroll in or switch to an SNP for coverage starting January 1, if you have Medicare.
Special enrollment period: If you have Medicare and develop a qualifying chronic condition or enter a nursing home, you can join an SNP designed for those needs at any time. Or, if you qualify for both Medicare and Medicaid, you can join a D-SNP at any time.
If your circumstances change and you no longer meet the qualifications for an SNP, your plan will notify you, and you will be disenrolled. Once disenrolled, you have a grace period of at least 1 month to requalify. If at that time you want to switch plans, you can do so during a special enrollment period that occurs when you lose SNP coverage.
How do you enroll in a Medicare special needs plan?
Once you select an SNP you want to join, you can enroll in a few ways:
Fill out a paper application for the plan and mail it back to the insurance company.
Complete an application online through the plan's website.
Visit the Medicare Plan Finder online if you have Medicare and Medicaid.
Call a representative for the plan directly or call 1-800-633-4227 (1-800-MEDICARE) to join by phone. TTY users can call 1-877-486-2048.
A representative for the plan you choose can provide more details on how to complete the enrollment process.
You'll need to provide proof that you meet the SNP's eligibility criteria. Depending on your situation, you may need to provide a physician's letter, your Medicaid card, or documentation of your need for long-term care (of at least 90 days) as proof.
For free help with applying for a Medicare SNP, you can contact your local State Health Insurance Assistance Program (SHIP). The SHIP national network provides one-on-one counseling and assistance with Medicare paperwork.
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The bottom line
Medicare Advantage special needs plans (SNPs) focus on coordinating care for three different groups: people with specific chronic illnesses, people who qualify for both Medicare and Medicaid, and people who need institution-level nursing care. These plans are required to provide the same benefits as original Medicare, but they may charge an additional premium.
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References
Centers for Medicare & Medicaid Services. (2011). Your guide to Medicare special needs plans (SNPs).
CMS.gov. (2023). Chronic condition special needs plans (C-SNPs). Centers for Medicare & Medicaid Services.
CMS.gov. (2023). Dual eligible special needs plans (D-SNPs). Centers for Medicare & Medicaid Services.
CMS.gov. (2023). Medicare managed care manual. Centers for Medicare & Medicaid Services.
CMS.gov. (2023). Special needs plan. Centers for Medicare & Medicaid Services.
Medicaid and CHIP Payment and Access Commission. (n.d.). Medicare Advantage dual eligible special needs plans.
Medicare.gov. (n.d.). Special needs plan (SNP).
Medicare Interactive. (n.d.). Enrolling in a SNP.
Medicare Interactive. (n.d.). Extra Help basics.
Medicare Interactive. (n.d.). SNP costs and coverage.
Medpac.gov. (2013). Medicare Advantage special needs plans.
Ochieng, N., et al. (2023). Medicare Advantage in 2023: Enrollment update and key trends. Kaiser Family Foundation.
Vardaman, K. (2019). Analysis of care coordination requirements in integrated care models. Medicaid and CHIP Payment and Access Commission.
