Medicare Advantage Special Needs Plans (SNPs) are a type of Medicare Advantage Plan specifically designed for individuals with certain healthcare needs, specific medical conditions or who are also eligible for Medicaid. Medicare Advantage Plans in general are an alternative to Original Medicare (Medicare Part A and Part B). These plans are regulated by the federal government and offered by private health insurance companies.
SNPs offer custom-tailored benefits, providers, and drug formularies (a list of covered prescription medications) that meet the unique needs of the groups they are designed to serve. For example, an SNP for individuals with cancer may cover certain cancer specialists, chemotherapy drugs, and extra days of covered hospital stay. Read on for a comprehensive exploration of how these plans work.
Table of Contents
- Understanding Special Needs Plans (SNPs) for Medicare Advantage
- Types of Medicare Special Needs Plans
- Medicare Advantage SNPs vs. Other Types
- Benefits and Drawbacks of Medicare Advantage SNP Plans
- Your Care Network with Medicare Advantage SNPs
- The Costs of a Medicare Advantage Special Needs Plan
- How to Select a Medicare Advantage Special Needs Plan
- Get the Most Out of Medicare SNPs
- Putting It All Together
- Frequently Asked Questions
Understanding Special Needs Plans (SNPs) for Medicare Advantage
Since healthcare costs can be very high for individuals with specific medical conditions, it’s important to understand how Special Needs Plans work. Knowing what’s covered, whether you have network limitations, and your out-of-pocket expenses can help you avoid being surprised by unexpected medical expenses.
Key Features of Medicare SNPs
- Required to provide Medicare Part D prescription drug coverage
- Uses a care coordinator to help develop a care plan to keep participants healthy
- May charge a monthly premium (varies by plan)
- May offer out-of-network coverage (varies by plan)
- May require referrals to see a specialist (varies by plan)
Since Special Needs Plans are specifically designed for the groups they serve, each plan type may have different features. Check with the plan you’re considering to confirm the necessary details.
What Do Medicare Advantage SNP Plans Cover?
Medicare Advantage SNPs include Medicare A, B, and D coverage. Under Part A, these plans cover inpatient hospital care, surgery, lab tests, skilled nursing facilities, home health care, and hospice. Part B coverage includes doctor’s visits, outpatient medical care, preventative services, and durable medical equipment.
Since the individuals they cover typically need prescription drugs to treat their special health care needs, SNPs must also provide Medicare Part D prescription drug coverage.
Types of Medicare Special Needs Plans
Three primary types of Medicare Special Needs Plans exist. While they have different coverage and eligibility requirements, each requires a care coordinator, who acts as the primary healthcare provider and manages the care received from other providers. The following is an overview of each SNP type.
Chronic Conditions Special Needs Plan (C-SNP)
A Chronic Special Needs Plan (C-SNP) is specifically designed for individuals with chronic conditions or other severe and/or disabling conditions. Some examples include autoimmune disorders like HIV/AIDS, cancer, cardiac disorders, dementia, stroke, neurologic disorders, end-stage renal disease, chronic alcohol and drug dependencies, and diabetes mellitus.
- Eligible for Medicare Part A and Part B
- Diagnosis of a qualifying health condition that a healthcare provider has verified
Dual-Eligible Special Needs Plan (D-SNP)
A Dual-Eligible SNP (D-SNP) is specifically designed for individuals eligible for both Medicare and Medicaid. These plans offer standard Medicare benefits as well as additional services and coverages that meet the unique needs of the covered individuals.
- Eligible for Medicare Part A and Part B
- Eligible for Medicaid
Institutional Special Needs Plan (I-SNP)
Institutional SNPs (I-SNPs) are specifically designed for individuals who are currently receiving or are expected to receive healthcare and medical services from a specialized institution for a period of 90 days or longer. This includes individuals residing in a mental health facility, nursing home, or other long-term care facilities.
- Eligible for Medicare Part A and Part B
- Needs institutional services for 90 days or longer
- Resides in an area where the chosen institution is licensed to operate
Medicare Advantage SNPs vs. Other Types
Medicare Advantage Special Needs Plans can be structured as either a health maintenance organization (HMO) or a preferred provider organization (PPO). However, some differences from a standard Medicare Advantage HMO or PPO exist.
Depending on the specific plan, out-of-network services may or may not be covered, and referrals may be needed for certain services. Following is a brief comparison of Medicare SNPs versus other common types of Medicare Advantage plans.
Medicare SNPs vs. PPO
A PPO plan offers a network of approved healthcare providers, medical institutions, and pharmacies that typically provide services at a discounted rate. These plans also allow covered individuals to receive care from their provider of choice, even if that provider is not part of the plan’s network. This allows you to see any doctor or specialist and receive services at any hospital, although out-of-network care may be more expensive. PPO plans also do not require a primary care provider or referrals to see a specialist.
Medicare Advantage SNPs can be structured as a PPO, allowing covered individuals to seek services outside the plan’s network. However, Medicare SNPs typically require a care coordinator, which is similar to a primary care provider. SNPs also include Medicare Part D coverage, while PPOs may or may not include this coverage.
Medicare SNPs vs. HMO
An HMO is similar to a PPO in that it also has its own network of doctors, hospitals, and other healthcare providers. However, HMOs typically do not cover out-of-network services except in emergency situations. When individuals covered by an HMO plan go out-of-network, they may be responsible for paying the entire cost out-of-pocket. HMOs typically also require a primary care provider and referrals for specialist services. In addition, while many HMO plans include Medicare Part D drug coverage, some do not.
Some Medicare Advantage SNPs are structured as an HMO, requiring covered individuals to stay within the plan’s network for healthcare services. However, the networks typically include doctors, specialists, care facilities, and medications specifically selected to meet the needs of the groups covered under the plan. SNPs also include Medicare Part D coverage, while HMOs may or may not.
Medicare SNPs vs. PFFS
A private fee-for-service (PFFS) plan is a type of Medicare Advantage plan that determines the amount the plan pays healthcare providers and the amount covered individuals must pay. These plans allow beneficiaries to seek services from any doctor, hospital, or healthcare provider that agrees to the plan’s payment terms.
PFFS plans do not require covered individuals to use a primary care provider, while SNPs require a care coordinator. Both SNPs and PFFS plans have a network of preferred providers who offer services at a lower cost compared to the cost for individuals not part of the network. When you have a PFFS plan, out-of-network providers and hospitals can refuse to treat you in non-emergency situations.
Medicare SNPs vs. HMO-POS
An HMO-POS plan is a type of HMO plan that offers additional flexibility by allowing covered individuals to seek services outside the network at an additional cost. These plans typically require a primary care provider and may require referrals for specialist care.
Unlike SNPs, an HMO-POS does not have a network specifically designed for individuals with a certain type of condition or healthcare needs. HMO-POS plans also may not include Medicare Part D prescription coverage.
Medicare SNPs vs. MSA
A Medicare Medical Savings Account (MSA) combines a high-deductible Medicare Advantage plan with a medical savings account. Medicare deposits funds into a savings account, which you can use to pay for a wide range of healthcare expenses. The MSA plan does not cover healthcare costs until you meet the deductible, but you can use the funds in the savings account to pay for these expenses. MSA plans also do not include Medicare Part D prescription drug coverage.
Since individuals eligible for SNPs typically have high medical bills and need a variety of prescription drugs, a Medicare MSA is not always a viable option.
Benefits and Drawbacks of Medicare Advantage SNP Plans
- Prescription drug coverage
- Coordination of care
- Lower costs
- Specialized benefits
- May have additional coverage
- Limited availability
- Eligibility requirements
- Potentially limited provider options
- Referrals may be required
While Medicare Advantage SNPs can be very helpful for individuals with certain healthcare needs, they are not ideal for everyone. Before making a decision, consider the following benefits and potential drawbacks.
- Prescription drug coverage: SNPs are required to include Medicare Part D prescription drug coverage. This can help ensure you get the drugs you need without having to worry about purchasing additional coverage.
- Coordination of care: Your care coordinator can oversee your medical care and make sure you receive the full treatment you need to properly manage your conditions.
- Lower costs: SNPs may be less expensive than other types of plans. Medicare Advantage plans also have maximum annual out-of-pocket costs, which Original Medicare does not offer.
- Specialized benefits: SNPs are specifically designed for the needs of the groups they cover and may provide access to specialists, facilities, and prescription drugs that are not covered under other types of plans.
- May have additional coverage: Many Medicare Advantage SNPs include additional coverage that is not available under Original Medicare, such as hearing, vision, dental, and wellness services.
- Limited availability: A particular SNP may not be available in your area. If you travel outside of your home state, you may also have limited coverage options.
- Eligibility requirements: SNPs have additional eligibility requirements beyond the requirements for Original Medicare.
- Potentially limited provider options: Depending on the SNP you choose, you may need to stay within the plan’s network. This could create a problem if your preferred provider or facility is not in-network.
- Referrals may be required: Some plans require a referral from your care coordinator prior to receiving services from a specialist. You may also need to get preapproval before receiving certain services or procedures.
Your Care Network with Medicare Advantage SNPs
An SNP’s care network can play a critical role in the quality of care a covered individual receives. Both HMO and PPO SNPs typically have a network of pre-approved doctors, facilities, and other healthcare providers who have agreed to provide medical services to covered individuals for a negotiated price that is lower than what is charged to those who are not part of the plan.
When creating a network, plans typically evaluate the provider’s reputation and hold in-network providers to a certain standard. This may mean that staying in-network can both lower your expenses and help ensure high-quality care. SNPs take things a step further by specifically selecting providers and facilities that specialize in treating the conditions that impact the groups covered by the plan.
However, situations may arise when you want or need to seek care from a provider that is out-of-network. In this case, coverage depends on whether the SNP is an HMO or a PPO. PPO SNPs typically cover a portion of the cost of out-of-network services, although at a lower rate than for in-network services. HMOs may not cover any of the cost of out-of-network services, leaving you to pay the full expense out-of-pocket.
The Costs of a Medicare Advantage Special Needs Plan
There are several different costs involved in purchasing a Medicare Advantage SNP and receiving healthcare coverage under the plan. This includes the following:
- Premiums: The amount you must pay for plan coverage, regardless of whether you receive covered medical services. Some plans charge a monthly premium in addition to the required Medicare Part B premium.
- Deductibles: The amount you must pay before your plan begins to pay for covered medical services.
- Copayments: A fixed fee you pay your provider for services, for example, a charge of $20 for each doctor’s visit.
- Coinsurance: A predetermined percentage of your covered medical costs you must pay for covered services after your deductible has been met. For example, you may be required to pay 20% of your total covered medical bill.
- Out-of-network fees: Some plans may charge an additional fee for using out-of-network doctors, facilities, and healthcare providers.
- Out-of-pocket maximums: Federal law requires Medicare Advantage plans, including SNPs, to provide an annual limit on out-of-pocket costs. In 2024, the federal maximum is $8,850, but individual plans may also have lower maximums. Once the maximum has been met, you do not have to pay additional out-of-pocket costs until the new plan year.
Other Ways to Save On Medicare
Chronic medical conditions and institutional care can be quite expensive. Individuals who need additional financial help may be able to take advantage of one of the following Medicare Savings Programs:
- Qualified Medicare Beneficiary Program (QMB): Helps pay Medicare Part A and Part B premiums, deductibles, copayments, and coinsurance. Under this program, providers cannot bill you for items and services covered by Medicare.
- Specified Low-Income Medicare Beneficiary Program (SLMB): Helps pay Medicare Part B premiums.
- Qualified Individual Program (QI): Helps pay Medicare Part B premiums, but at a lower percentage than the SLMB program.
- Qualified Disabled and Working Individuals (QDWI) Program: Helps pay Medicare Part A premiums for certain individuals who have a disability, are working, and lose benefits due to returning to work.
- Medicare Extra Help: Medicare Extra Help helps individuals with limited income or resources pay for Medicare Part D prescription drug costs, such as copayments and deductibles. Individuals who qualify for a Medicare Savings Program also receive Extra Help.
See It in Action
Since Medicare Advantage plans, including SNPs, require individuals to pay Medicare Part B premiums, a Medicare Savings Program can help reduce or even eliminate this expense. Depending on the program you’re eligible for, you may also pay less (or nothing) for Medicare-covered services and items.
For example, your SNP may allow you to see an in-network specialist for a copayment of $20. If you had a $200 bill with a $50 remaining deductible, you could expect to pay a total of $70 ($20 for the copay, plus the $50 deductible). However, if you were enrolled in the QMB, your out-of-pocket cost would be $0.
How to Select a Medicare Advantage Special Needs Plan
When you search for an SNP, you may find that you have several different plans to choose between. As you compare your options, consider the following factors:
- Plan costs: Consider the premium, deductible, copayments, coinsurance, and the plan’s out-of-pocket maximum.
- HMO vs. PPO: Decide whether you prefer the flexibility of a PPO or the cost-saving of an HMO.
- Network size: Consider the size of the plan’s network. Larger networks offer more options, but smaller networks may have quality providers.
- Preferred providers: Consider whether your preferred healthcare providers and facilities are included in the plan’s network.
- Eligibility requirements: Review the plan’s requirements to confirm eligibility.
Get the Most Out of Medicare SNPs
As with other types of Medicare Advantage plans, SNPs can change from year to year. Keeping an eye on your plan can help ensure you’re optimizing your benefits. Some of the things to watch out for include:
- The plan’s network: Providers and facilities may leave or be added to the plan from one year to the next. Keeping track of the network can help you avoid unintentionally going out of network. You may also consider changing plans if your preferred provider is dropped.
- Authorization requirements: If the plan changes its authorization requirements, you could unintentionally receive services that are not covered, leaving you to pay the bill out-of-pocket.
- Annual notice of change: The annual notice of change document, sent out by insurance providers annually, explains changes to the plan’s medical benefits, networks, premiums, deductibles, and other relevant updates. It’s important to carefully review this shortly after receiving it so you are prepared to make a change during the open enrollment period.
Putting It All Together
Medicare Advantage Special Needs Plans are a particular type of Medicare Advantage Plan specifically designed to provide for the unique needs of the groups they serve. These plans cover Medicare Part A, Part B, and Part D and can be structured as an HMO or a PPO.
There are three types of SNPS: Chronic Condition SNPs, Dual-Eligible SNPs, and Institutional SNPs, each with its own coverage options and eligibility requirements. SNPs typically have a network of preferred providers who have agreed to provide services at a discounted rate.
Depending on your plan type, you may be able to receive out-of-network services at a higher cost. SNPs also require a care coordinator who helps ensure covered individuals receive the care they need. Individuals who have difficulty paying their out-of-pocket medical expenses may also be able to qualify for federal assistance programs, known as Medicare Savings Programs.
If you think a Medicare Advantage SNP may be right for you or a person in your love, make sure to speak with a trusted insurance agent for more information on your available options.