As the Medicare Advantage (MA) program has continued to grow over the last decade, so too have Institutional-Special Needs Plans (I-SNPs) for care rendered in nursing homes or other long-term care settings. However, there may be slight shrinkage in store for these plans in 2025.

According to a KFF analysis of CMS Landscape files, I-SNPs have seen substantial growth in the last few years, reflecting an overall rising demand for care tailored to the nursing home residents.

That said, in 2025, the I-SNP market will see a slight contraction, with 160 plans being offered nationwide, down from 173 plans in 2024. This is a small decrease from a peak of 189 plans in 2023 – a figure that had almost doubled from 97 plans in 2018.

While the number of I-SNPs has fluctuated recently, it is clear that these plans continue to play a critical role in meeting the needs of the approximately 115,000 beneficiaries enrolled in them.

After all, these plans aim to provide more personalized care compared to traditional Medicare, helping beneficiaries manage complex health conditions while remaining in a supportive environment. For nursing home residents, this means more streamlined access to health services, as I-SNPs often include care coordination, enhanced provider networks, and benefits designed to meet the unique needs of institutionalized individuals.

Despite the slight dip in available I-SNPs for 2025, insurers continue to recognize the importance of this market segment, with new entrants, such as SECUR Health Plan in Florida, expanding the availability of I-SNPs.

All in all, it is noteworthy that the I-SNP market faces challenges, particularly related to enrollment and financial sustainability. 

And as Skilled Nursing News has been reporting, some companies such as Optum, the health services division of UnitedHealth Group (NYSE: UNH), has cut its exposure to I-SNPs in several states this year.

The reasons for this reduction in I-SNPs include the complicated care requirements of institutionalized beneficiaries, rising acuity and the financial constraints of serving a population with higher health care costs. Also, the business model of the I-SNP itself may bear some burdens.

Executives for American Health Plans, which offers provider-owned I-SNPs, told SNN earlier that provider ownership offers his I-SNP’s business model a measure of control that is lacking in I-SNPs owned by large insurance companies.

“You’re going to have other factors that decide how you enter the market and whether you stay in the market,” Chief Development Officer Hank Watson said. “Nursing homes have long been subject to the shifting winds of the large insurers.”

Longevity Health Plan is also growing amid Optum’s exit from certain markets.

And so overall, while the number of I-SNPs may decrease in 2025, on balance these plans will remain an important part of the Medicare Advantage ecosystem.