The Kaiser Family Foundation (KFF) recently released its annual review of Medicare Advantage (MA) enrollment trends. On the surface, the headline is pretty straightforward: MA continues to grow.

As of 2026, more than 35 million beneficiaries are enrolled in MA plans, representing roughly 55 percent of all Medicare beneficiaries eligible for Medicare Advantage. Growth has slowed somewhat compared to the breakneck pace seen during the post-COVID period, but MA still added approximately 1.1 million members between 2025 and 2026. Put differently, more than half of Medicare beneficiaries now receive their coverage through a private MA plan rather than traditional fee-for-service (FFS) Medicare.

Interesting, but not particularly surprising.

The more important story is where that growth is occurring.

Today, approximately 8.2 million beneficiaries are enrolled in Special Needs Plans (SNPs), representing about 23 percent of all MA enrollment. More remarkably, SNPs accounted for roughly 85 percent of all MA enrollment growth during the past year.

That statistic deserves a second look.

If 85 percent of all MA growth is coming from SNPs, then the future growth engine of Medicare Advantage is no longer broad-based enrollment among seniors choosing MA over FFS Medicare. Increasingly, growth is being driven by plans focused on clinically complex populations with significant healthcare needs.

The SNPs

For those who don't spend their evenings reading Medicare regulations (and if you do, I assume you're either in our industry or have made several questionable life choices), there are three primary types of SNPs.

• D-SNPs (Dual Eligible Special Needs Plans) serve individuals who qualify for both Medicare and Medicaid. These are generally lower-income beneficiaries with substantial medical, social, and long-term care needs. D-SNPs remain the largest category by far, accounting for approximately 78 percent of SNP enrollment.

• I-SNPs (Institutional Special Needs Plans) serve nursing home residents and certain individuals who meet an institutional level of care while living in the community. These plans receive a disproportionate amount of attention in the post-acute world but represent only about 2 percent of total SNP enrollment nationally.

• C-SNPs (Chronic Condition Special Needs Plans) serve beneficiaries with specific qualifying chronic diseases such as diabetes, congestive heart failure, cardiovascular disease, chronic pulmonary disease, ESRD, and certain other conditions. These plans are designed around disease management, care coordination, medication management, and supplemental benefits targeted to a specific clinical population.

Rise of the C-SNPs

And that brings us to the real story….C-SNP enrollment absolutely exploded over the past year.

Enrollment increased by approximately 45 percent, adding more than 500,000 beneficiaries and reaching nearly 1.7 million members nationwide. C-SNPs now account for roughly 20 percent of all SNP enrollment, up from 16 percent just one year ago.

Think about that for a minute.

A product that represented roughly one-sixth of SNP enrollment a year ago now represents one-fifth. In healthcare terms that is extraordinary growth.

Even more interesting, the growth is highly concentrated. The vast majority of C-SNP enrollment is occurring in plans focused on diabetes and cardiovascular disease. That should not be surprising. Those conditions are prevalent, expensive, and lend themselves well to structured care management interventions. They also happen to be conditions that drive a tremendous amount of hospitalization, emergency department utilization, and avoidable healthcare spending.

Hitting the Sweet Spot

In many ways, C-SNPs sit squarely in the sweet spot of what MA plans are trying to accomplish.

The beneficiaries are sick enough to generate meaningful risk-adjusted revenue. They are clinically complex enough that care management can theoretically improve outcomes. But they are not yet so impaired that costs become entirely uncontrollable. From a plan perspective, this creates an opportunity to use care management, medication adherence programs, disease-specific interventions, and supplemental benefits to improve outcomes while reducing expensive utilization.

Whether plans always accomplish that objective is a different discussion entirely.

The point is that they believe they can.

And increasingly, CMS seems to believe that C-SNPs are becoming important enough to warrant closer scrutiny.

As part of the CY 2027 Medicare Advantage proposed rule, CMS issued a Request for Information (RFI) seeking stakeholder feedback on the future of Special Needs Plans. While the RFI technically addressed all SNP categories, much of the discussion appears to have been driven by concerns surrounding the rapid growth of C-SNPs.

CMS’s Fears

Reading between the regulatory lines, CMS seems worried about something very specific.

Historically, D-SNPs have been the centerpiece of the federal government's Medicare-Medicaid integration strategy. D-SNPs require Medicaid contracts, extensive care coordination requirements, data-sharing obligations, and numerous beneficiary protections designed to align Medicare and Medicaid services.

C-SNPs generally do not.

The problem, from CMS's perspective, is that some C-SNPs are enrolling large numbers of dual-eligible beneficiaries while operating outside many of those integration requirements. In essence, CMS appears concerned that certain C-SNPs may be functioning as a sort of "D-SNP-lite" product.

The agency specifically requested stakeholder feedback on whether certain C-SNPs with high concentrations of dual eligibles should be subject to additional care-coordination requirements, Medicaid contracting requirements, or other D-SNP-like standards.

To be clear, CMS did not propose any policy changes. This is an RFI, not a proposed regulation..but RFIs are important because they tell us what regulators are thinking about before they start writing actual rules…and what CMS appears to be thinking about is whether C-SNPs have become too important to remain outside the broader Medicare-Medicaid integration framework.

That concern itself says a lot about where the market is heading.

Complexity Not Scale

A decade ago, C-SNPs were largely viewed as niche disease-management products. Today, they are becoming one of the primary growth vehicles in Medicare Advantage. More broadly, these enrollment trends reflect a fundamental evolution in MA strategy. Ten years ago, much of the industry's growth was driven by attracting relatively healthy seniors into broad-based MA products. The focus was scale. Today, the focus is increasingly complexity.

The fastest-growing portions of the MA market are beneficiaries with chronic disease, dual eligibility, long-term care needs, behavioral health challenges, and other forms of clinical complexity. The industry's future growth increasingly depends on its ability to identify, engage, stratify, and manage these populations effectively. Or at least convince CMS that it can.

For post-acute providers, this trend is worth paying attention to. Nursing homes, assisted living providers, home health agencies, physician groups, and hospice organizations care for populations that overlap significantly with C-SNP eligibility criteria. Diabetes, heart failure, COPD, cardiovascular disease, and other chronic conditions are not niche populations in post-acute care. They are daily operating realities.

As MA plans continue building disease-specific care models, provider networks, and care-management programs, organizations that can demonstrate strong clinical outcomes in these populations may become increasingly valuable partners.

This may ultimately create opportunities that extend well beyond traditional nursing facility contracting. The long-term opportunity may involve participating in disease-management programs, value-based arrangements, population-health initiatives, and other care models designed to manage chronic disease before beneficiaries ever require institutional levels of care.

Maybe.

I-SNPs Remain ‘Rational’

As longtime readers know, I remain something of a Medicare Advantage skeptic when it comes to nursing facilities outside of I-SNPs. I continue to believe I-SNPs represent one of the more rationally aligned models in the MA ecosystem because the incentives are relatively straightforward and the care environment is controlled.

C-SNPs are a different animal entirely.

That said whether one loves Medicare Advantage or spends most of one's time yelling at Medicare Advantage, the enrollment data are difficult to ignore.

The story is no longer simply "more Medicare Advantage." The story is increasingly specialization.

The next phase of Medicare Advantage growth appears likely to be driven by plans that can identify, engage, and manage clinically complex populations. CMS knows it. The plans know it. Investors know it. And judging from the numbers, no segment illustrates that trend more clearly than the remarkable rise of C-SNPs.

Jay Gormley is chief investment officer and COO, Advisory, Zimmet Healthcare Services Group.