How a Medicare Advantage proposal could shake up Medicaid

Modern Healthcare – Wednesday, January 7, 2026
By Nona Tepper

A federal plan to align benefits for people with both Medicare and Medicaid could reorder competition among health insurance companies that do business with both programs.

The Centers for Medicare and Medicaid Services is considering a requirement that health insurance companies selling Medicare Advantage Chronic Condition Special Needs Plans, or C-SNPs, also be Medicaid managed care contractors.

If the agency executes this plan, it stands to benefit insurers such as Humana and Centene that are already active in Medicaid and Medicare. It also could limit competition in the market for C-SNPs, the fastest-growing Medicare Advantage products.

“If you’re a Medicaid plan, then you’re in a good position strategically [and] tactically to potentially gain market share over the next five to 10 years,” said Michael Ha, a senior research analyst at the financial services firm Baird.

“But if you’re under-indexed, then this probably isn’t the best,” Ha said. The policy could prompt Medicare Advantage carriers such as CVS Health subsidiary Aetna to acquire Medicaid insurers, he said.

This policy may dissuade Medicare Advantage insurers from the C-SNP market, said Karen Schulte, president of the Medicare division at Scan Group, whose Scan Health Plan subsidiary has 34,000 C-SNP members, 22% of whom are dually eligible.

“Because of that administrative increase in requirements on both the plan side and state side, I believe some plans and states may decide that C-SNPs are not worth offering,” Schulte said.

CMS has been working to integrate Medicare and Medicaid coverage for dual-eligible beneficiaries for years. Recently, the agency tightened oversight on “lookalike plans,” which are Medicare Advantage policies designed for that population.

In 2023, the agency shut down lookalike plans made up of more than 80% dual-eligibles and moved them into Dual Eligible Special Needs Plans, or D-SNPs. This year, CMS will shutter lookalike plans with more than 60% of members who also qualify for Medicaid. By 2030, the agency will limit most D-SNP enrollment to insurers such as Humana and Centene that also operate integrated Medicare-Medicaid plans.

These limitations on D-SNPs have inspired insurers to focus on C-SNPs, which are not subject to enrollment restrictions.

The Medicare Payment Advisory Commission, a nonpartisan expert panel that counsels Congress on policy, and others have characterized C-SNPs as a way for insurers to boost enrollment in lucrative plans while circumventing state Medicaid regulations.

“If you’re a C-SNP that’s enrolling many, many dual-eligible beneficiaries, you should be responsible for coordinating across Medicaid,” said Jose Figueroa, a professor at the Harvard T.H. Chan School of Public Health who is publishing a study on the topic this month.

Insurance companies launched more new C-SNPs for the 2026 plan year than any other Medicare Advantage product.

“C-SNPs really are skyrocketing. There’s been an upward inflection point ever since that lookalike policy was implemented,” Figueroa said.

More Medicare Advantage members signed up for C-SNPs than for any other kind of policy in 2025, and enrollment spiked 67.5% to 1.1 million. One of five C-SNP enrollees is dually eligible, according to an analysis of CMS data by ATI Advisory, a healthcare research firm. Almost half of those are eligible for partial Medicaid benefits to supplement their Medicare coverage, according to ATI.

Dual-eligible enrollees are signing up for C-SNPs because of the supplemental benefits tailored to their personal needs, such as no-cost insulin for people with diabetes. “When they look at the benefits in other products, they want access to that,” Schulte said.

Most people who qualify for both Medicare and Medicaid and signed up for a C-SNP live in California, where 95.5% of C-SNP enrollees are dually eligible, according to CMS.

Many of those are likely only partially eligible for Medicaid and unable to enroll in a D-SNP because of state requirements, said Caroline Yaun, vice president and senior principal of strategy consulting at the consulting firm Press Ganey.

If C-SNP insurers were required to hold be Medicaid managed care carriers, they would diversify their contracts to stay under the enrollment thresholds or tightly manage their dual eligible sign-ups, Yaun said.

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