What Is a Medicare Special Needs Plan?

Medicare Special Needs Plan (SNP)

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If you have chronic conditions, live in a nursing home, or are dual eligible for Medicaid, Original Medicare (Part A and Part B) may not be right for you. You have a choice to make and that may include a Medicare Special Needs Plan.

Different Types of Medicare Plans

There are two types of Medicare plans, those run directly by the government and those run by commercial insurance companies. In both cases, the federal government sets the standard of care in terms of what must be covered. Commercial plans have the option of adding supplemental benefits on top of that.

A Medicare Cost Plan is a commercial plan offered in rural areas where there may be limited access to hospitals, specialists, and other medical resources. It can offer supplemental benefits like a managed-care plan but gives you the freedom to switch to Original Medicare whenever you access care outside of your plan's network.

As of 2020, these plans are only available in Colorado, Iowa, Illinois, Maryland, Minnesota, Nebraska, North Dakota, South Dakota, Texas, Virginia, and Wisconsin.

Medicare Advantage (Part C) accounts for the majority of commercial plans. In 2018, nearly 20 million Medicare beneficiaries signed up for one of these plans. Medicare Cost plans are not available where there are more than two Medicare Advantage options.

A Medicare Special Needs Plan (SNP) is a special type of Medicare Advantage plan. Like all Medicare Advantage plans, they provide care within a local network of providers and medical facilities. Unlike traditional Medicare Advantage plans, however, they are tailored to meet the medical and social needs of the poor and people with chronic medical conditions.

There are three different types of Medicare Special Needs Plans:

  • Chronic Condition SNPs (C-SNPs)
  • Dual Eligible SNPs (D-SNPs)
  • Institutional SNPs (I-SNPs)

Chronic Condition SNPs (C-SNPs)

Chronic Condition SNPs are intended for people who have specific medical conditions. The plan will provide services intended to maximize health outcomes for the condition(s).

For example, they will make sure there are specialists that treat that condition in your network and that appropriate medications are included on your medication formulary. Care coordinators may be assigned to help you keep track of your progress.

At this time, the Centers for Medicare and Medicare Services (CMS) only recognizes 15 chronic illnesses and disease categories for eligibility in a C-SNP. To apply for one of these plans, you must have one of the following medical conditions:

  • Autoimmune disorders (polyarteritis nodosa, polymyalgia rheumatica polymyositis, rheumatoid arthritis, and systemic lupus erythematosus)
  • Cancer, excluding pre-cancerous or in-situ conditions
  • Cardiovascular disorders (arrhythmias, coronary artery disease, peripheral vascular disease, and chronic venous thromboembolic disorder)
  • Chronic alcohol and other drug dependence
  • Chronic heart failure
  • Chronic lung disease (asthma, chronic bronchitis, emphysema, pulmonary fibrosis, and pulmonary hypertension)
  • Chronic mental health conditions (bipolar disorders, major depressive disorders, paranoid disorder, schizophrenia, and schizoaffective disorder)
  • Dementia
  • Diabetes mellitus
  • End-stage liver disease
  • End-stage renal disease (ESRD) requiring dialysis
  • Hematologic disorders (aplastic anemia, hemophilia, immune thrombocytopenic purpura (ITP), myelodysplatic syndrome, and sickle-cell disease)
  • HIV/AIDS
  • Neurologic disorders (amyotrophic lateral sclerosis (ALS), epilepsy, Huntington’s disease, multiple sclerosis, paralysis, Parkinson’s disease, polyneuropathy, spinal stenosis, and stroke-related neurologic deficit)
  • Stroke

Dual Eligible SNPs (D-SNPs)

In 2018, 12.2 million people were dual eligible for Medicare and Medicaid. Seventy-one percent received full Medicaid benefits while the remainder got partial benefits.

To qualify for a Dual Eligible SNP, you must be eligible for full Medicaid benefits or otherwise qualify for benefits according to one of the four Medicare Savings Programs:

  • Qualified Disabled and Working Individual (QDWI)
  • Qualifying Individual (QI)
  • Qualified Medicare Beneficiary (QMB)
  • Specified Low-Income Medicare Beneficiary (SLMB)

Depending on the D-SNP, you may (or may not) have to cost-share with Medicare. Cost sharing refers to your paying Medicare co-insurance, co-payments, and/or deductibles. The goal overall is to keep costs down.

Institutional SNPs (I-SNPs)

Not everyone is able to care for themselves at home. Data from the Centers for Disease Control and Prevention (CDC) notes that 1.4 million people resided in nursing homes and more than 811,000 in residential care communities in 2016.

An Institutional SNP aims to improve the health of people requiring long-term care. The goal is to provide preventive care and to decrease the need for hospitalization.

To be eligible for one of these plans, you must reside in or be expected to reside in one of the following types of facilities for 90 days or longer.

If someone is receiving frequent health care at home, they may also qualify for an I-SNP. Each state has its own rules as to what level of care is needed at home to qualify for one of these plans.

How and When to Enroll

To be eligible for a Medicare Special Needs Plan, you need to be enrolled in both Medicare Part A and Part B.

As long as you also meet the requirements for the plan (e.g., qualifying medical conditions, Medicaid eligibility, or institutionalization), you can enroll in a Medicare Special Needs Plan whenever one opens up in your area. To look for available plans, go to the Medicare plan finder.

The insurance company will notify you if you lose eligibility for the plan for any reason. This could happen if you no longer require dialysis for kidney disease, you no longer qualify for Medicaid benefits, or you move out of an institutionalized facility.

You have two months from the time of that notice to enroll in an alternate Medicare plan. This is known as your Special Enrollment Period. If you sign up for a Medicare plan later than that, you could be caught without Medicare coverage until you can sign up during the General Enrollment Period or the Open Enrollment Period.

A Word From Verywell

Most people go the route of Original Medicare or a traditional Medicare Advantage plan. You may be better off going with a Medicare Special Needs Plan if you have certain medical conditions, if you qualify for Medicaid, or if you live in a long-term care facility. Research plans in your area to see if they make a good fit.

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Article Sources
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  1. Medicare.gov. Other Medicare health plans.

  2. Kaiser Family Foundation. Total number of Medicare beneficiaries.

  3. Centers for Medicare and Medicare Services. Chronic Condition Special Needs Plans (C-SNPs). Updated February 11, 2020.

  4. Centers for Medicare and Medicaid Services. People dually eligible for Medicare and Medicaid. Published March 2020.

  5. Centers for Medicare and Medicaid Services. Dual Eligible Special Needs Plans (D-SNPs). Published February 11, 2020.

  6. National Center for Health Statistics. Long-term care providers and services users in the United States, 2015–2016: analytical and epidemiological studies. 2019;3(43).

  7. Centers for Medicare and Medicaid Services. Institutional Special Needs Plans (I-SNPs). Updated August 10, 2016.