SNPs Are Eating Medicare Advantage's Lunch

IMC Board
Feb 25
8 min read

While the broader Medicare Advantage market stumbles, a quieter revolution is reshaping how America's most vulnerable seniors get their coverage. Smart insurers are racing to get ahead of it.

Key Takeaways

SNP enrollment surges—Special Needs Plan (SNP) membership reached 8.2 million as of February 1, 2026, which is a 12.2% year-over-year increase that far outpaces overall Medicare Advantage growth of 3%.
SNPs now drive the market—SNPs accounted for roughly 80% of all net Medicare Advantage enrollment growth in 2026, signaling a structural shift in the program.
C-SNPs are the breakout segment—Chronic Condition Special Needs Plan (C-SNP) enrollment jumped 48.6% to 1.6 million, the fastest-growing SNP type for the second consecutive year.
UnitedHealthcare wins; Elevance loses—UnitedHealthcare posted the greatest SNP enrollment gains, while Elevance Health recorded the steepest losses.
Profitability is the pull—D-SNP and C-SNP margins have historically been double those of standard Medicare Advantage plans, making SNPs a refuge as broader plan profitability erodes.

A Market Diverging in Real Time

The 2026 Medicare Advantage enrollment data tells two very different stories.

On one hand, total Medicare Advantage enrollment grew a modest 3% year-over-year to just over 35 million members. That's well below the 9% annual average the program enjoyed from 2007 through 2024. On the other hand, Special Needs Plans are booming, up 12.2% and now covering nearly one in four Medicare Advantage beneficiaries.

This divergence reflects a deliberate strategic pivot by major carriers who are pulling back from unprofitable standard plans while doubling down on the higher-margin SNP segment. Understanding what's driving this shift, and who's winning or losing because of it, is essential for every insurer, agent, and marketer working in this space.

Why SNPs Are Winning the Margin War

SNPs are more profitable than standard Medicare Advantage plans, and that's a big reason carriers are flooding the segment.

Data from the Medicare Payment Advisory Commission (MedPAC) found that in 2022, average margins for D-SNPs (7.5%) and Chronic Condition Special Needs Plans (7.4%) were roughly double the average margins for Medicare Advantage plans overall (3.6%). That gap is even more striking when you consider that standard Medicare Advantage plans collectively reported a $5.7 billion underwriting loss in 2024.

Why do SNPs outperform? Several structural advantages are a driving force:

Risk adjustment favorability—SNP enrollees tend to have more diagnosed health conditions, giving carriers more opportunities to generate higher risk-adjusted payments from CMS.
Medicaid cost-sharing support—D-SNP members who are dually eligible often have their cost-sharing covered by Medicaid, reducing the plan's out-of-pocket exposure.
Care coordination payoff—Intensive care management, while requiring upfront investment, can reduce costly hospitalizations and emergency utilization over time.
Supplemental benefit leverage—SNPs receive an average rebate of $267 per member per month from CMS, significantly higher than the $210 average for all Medicare Advantage plans, giving them more room to fund compelling supplemental benefits.

The bottom line for insurers is clear: When standard Medicare Advantage math no longer works, SNPs offer a more defensible financial foundation.

Enrollment Breakdown: Three Types, Three Stories

Not all Special Needs Plans are growing at the same pace. Here's what the 2026 data reveals about each segment.

D-SNPs: Steady Giant

D-SNPs remain the largest form of Special Needs Plan, with 6.4 million enrollees (up 5.7%). This growth was partly fueled by a federal push to better integrate Medicare and Medicaid benefits, as well as insurers converting Medicare-Medicaid Plan enrollees into D-SNP members. With more than 4 out of 5 SNP members enrolled in D-SNPs, this segment remains the bedrock of the market.

D-SNPs have grown more than 215% since 2018, compared to just 49% growth in general Medicare Advantage over the same period, according to ATI Advisory. That long-term trajectory underscores how durable this segment's growth has been.

C-SNPs: Breakout Segment

Chronic Condition Special Needs Plans are the story of the year. C-SNP enrollment surged 48.6% to 1.6 million members in 2026, marking the second consecutive year of leading growth across all SNP types. Carriers offered more new C-SNPs in 2026 than any other type of Medicare Advantage plan.

UnitedHealthcare's enrollment growth in 2026 was driven largely by C-SNPs, which serve members with cardiovascular disease, diabetes, and kidney failure. Aetna and Devoted Health more than doubled their C-SNP memberships after expanding into new geographic markets. The cancellation of CMS's Value-Based Insurance Design model also accelerated C-SNP participation, as some plans that previously operated under that program migrated their populations.

I-SNPs: Still Small, Still Steady

Institutional Special Needs Plans (I-SNPs), designed for beneficiaries in long-term care facilities, remain the smallest and slowest-growing SNP segment. Enrollment reached approximately 128,700 in 2026, a 5.4% increase. While growth is real, this segment serves a niche population and doesn't offer the scale opportunity that D-SNPs and C-SNPs do.

Winners and Losers: Who's Gaining Ground

The 2026 enrollment numbers reveal a market sorting itself fast, rewarding carriers with disciplined SNP strategies and punishing those that were slow to adapt.

Clear Winner: UnitedHealthcare

UnitedHealthcare posted the greatest SNP enrollment gains from 2025 to 2026, driven primarily by C-SNP expansion. This is notable because the insurer simultaneously lost more than 530,000 standard Medicare Advantage enrollees over the same period, as it pulled back from unprofitable individual and group plans. Their SNP gains represent a deliberate reallocation of focus.

Fastest Movers via Acquisition

Health Care Service Corp.'s $3.3 billion purchase of Cigna's Medicare Advantage business propelled the Blue Cross and Blue Shield licensee's D-SNP membership nearly 900% to more than 76,800. CareSource's buyout of Commonwealth Care Alliance and ElderServe Health similarly elevated its competitive position.

The lesson here is that organic growth is only one path. In a market where speed matters and geographic footprints take years to build, strategic acquisitions can compress years of enrollment growth into a single transaction.

The Bold Bet: Molina Healthcare

Molina Healthcare made the most decisive strategic statement of any carrier this cycle. The company is exiting traditional Medicare Advantage in 2027 and will focus exclusively on dual-eligible members through SNPs. It's a high-conviction play that essentially says the standard Medicare Advantage math is broken and the SNP model is where sustainable margins live.

The Biggest Loser: Elevance Health

Elevance Health recorded the greatest SNP membership loss in 2026, a significant setback given the segment's overall growth trajectory. Even so, the company's leadership has publicly vowed a greater emphasis on D-SNPs going forward. How quickly they can reverse the trend will be a story to watch throughout the year.

Devoted Health: A Remarkable Ascent

Devoted Health nearly doubled its total Medicare Advantage membership from under 210,000 to nearly 470,000. Its C-SNP expansion into 965 new counties made it one of the most aggressive geographic movers in the market. For a smaller, newer carrier, this represents a masterclass in targeted market penetration.

What This Means for Insurance Agents and Brokers

If you're an agent or broker working the Medicare market, the SNP shift has direct implications for your practice.

Know your SNP types—The differences between D-SNPs, C-SNPs, and I-SNPs determine which beneficiaries are eligible, what supplemental benefits are available, and which carriers are competitive in your market. Agents who can articulate these distinctions clearly will earn more trust from clients with complex needs.
Dual-eligible clients are a growth opportunity—With D-SNP enrollment at 6.4 million and growing, more clients who qualify for both Medicare and Medicaid are gaining access to integrated plans with richer benefits. Understanding the D-SNP landscape in your state, including how Medicaid integration requirements vary, will give you a meaningful edge.
Stay current on carrier footprints—Several carriers dramatically expanded their C-SNP county footprints in 2026. Markets that previously had limited SNP options may now have several competing plans. Keeping your plan comparison knowledge current, especially after annual enrollment periods, protects your clients and your commissions.
Expect continued market churn—With multiple carriers exiting or contracting their standard Medicare Advantage footprints while simultaneously expanding SNP offerings, your clients may be facing mid-year or renewal-period disruption. Proactive outreach to at-risk enrollees, especially those in plans that reduced benefits or narrowed networks, is a smart retention strategy.

What This Means for Digital Marketers

The SNP growth trend is also reshaping how Medicare plans should be marketed, and which audiences represent the biggest opportunity.

Dual-eligible beneficiaries are underserved in digital channels—This population is larger than ever and growing, but they're often harder to reach through traditional digital media. Carriers and their marketing partners need to invest in understanding the specific digital behaviors, preferred platforms, and trusted messengers for this audience.
C-SNP awareness is a major gap—Despite dramatic enrollment growth, Chronic Condition Special Needs Plans remain largely unknown to the general public and even to many beneficiaries who'd be eligible. Content marketing, search campaigns, and educational outreach around specific conditions such as diabetes, heart failure, and kidney disease represent an underutilized opportunity.
Condition-specific targeting is now table stakes—C-SNPs are defined by specific chronic conditions. That means the best marketing is also condition-specific, reaching people through their health journeys, rather than just their age and Medicare eligibility status. Partnerships with patient advocacy organizations, condition-specific online communities, and specialty provider groups can be high-ROI channels.
Geographic expansion creates new market windows—Carriers entering new areas with C-SNP or D-SNP plans represent a time-sensitive window for brand-building and enrollment marketing. If a carrier is new to a market, early awareness campaigns can establish name recognition before competitors respond.

Broader Market Context

The SNP boom doesn't exist in a vacuum. It's happening against a backdrop of significant financial pressure on the overall Medicare Advantage program.

Medicare Advantage plans collectively posted a $5.7 billion underwriting loss in 2024. More plans reported losses than gains. Major carriers including UnitedHealthcare and Aetna pulled back on benefits, raised premiums, and exited counties. CMS's updated risk adjustment model has compressed coding-based revenue gains. And proposed 2027 payment rates that are essentially flat to 2026 are already drawing heated industry pushback.

SNPs are, in part, a flight to quality, a bet that targeted, managed care for high-need populations is a more sustainable business model than mass-market Medicare Advantage. Whether that thesis holds as CMS continues to scrutinize risk adjustment and coding practices in the SNP segment will be one of the defining regulatory questions of the next several years.

For now, the enrollment data says the market has made its choice. SNPs are where the growth is, and the carriers, agents, and marketers who master this segment will be the ones writing the next chapter of Medicare Advantage.

Sources:

ATI Advisory: Medicare Advantage Special Needs Plans in 2026
Becker's Payer Issues: Medicare Advantage grows less than 1% during annual enrollment: 7 notes
Healthcare Brew: Insurers embrace special needs plans, even as they move away from Medicare Advantage
Healthcare Finance: KFF: Enrollment in Medicare Advantage special needs plans on the rise
KFF: A Closer Look at the Growing Role of Special Needs Plans in Medicare Advantage
KFF: Medicare Advantage Enrollment Grew by About 1 Million People, Mainly Due to Special Needs Plans
Modern Healthcare: Medicare Special Needs Plan enrollment 2026: Winners and losers
PwC: From growth to margin challenge: Navigating the forces shaping Medicare Advantage

Further Thoughts

The 2026 Special Needs Plan enrollment numbers aren't just a market update. They're a signal that the Medicare Advantage program is maturing and segmenting in ways that reward specialization over scale.

For big carriers, the challenge is executing an SNP strategy that's genuinely differentiated, rather than a rebadged standard plan. For independent agents, it's about developing deep expertise in a market where complexity creates opportunity. And for digital marketers, it's about finding and earning the trust of a population that's often invisible to traditional marketing funnels.

The winners in the years ahead won't just be the ones who show up in this market. They'll be the ones who truly understand it.