Changes to Medicare in 2025 Affect Dual Eligible Special Needs Plans

The Centers for Medicare & Medicaid Services’ (CMS) Medicare Final Rule 2025 included several changes affecting Medicare plans, agents, and enrollees.

In addition to agent compensation changes for Medicare Advantage (MA), there were several new and revised rules that will alter the Dual Eligible Special Needs Plan (D-SNP) landscape.

Please keep these new CMS rules in mind as you’re helping clients, especially those who are dual eligibles, find coverage.

What Are the CMS 2025 Final Rule D-SNP Changes?

The complexities of Medicaid and Medicare intertwining can make navigating D-SNP changes, enrollment, and utilization difficult for you and your clients alike, but we’re here to help. Generally speaking, with the upcoming changes, CMS aims to better integrate Medicaid and Medicare services for dually eligible individuals, improving care coordination, accessibility, and affordability for enrollees.

Generally speaking, with the upcoming changes, CMS aims to better integrate Medicaid and Medicare services for dually eligible individuals, improving care coordination, accessibility, and affordability for enrollees.

The ideal situation for both CMS and dual-eligible enrollees is for beneficiaries to obtain Medicare and Medicaid benefits from either the same plan/organization, aka a fully integrated D-SNP, or two plans under the same parent organization (or an entity sharing the same parent organization), aka highly integrated D-SNP. Not only does this “exclusively aligned enrollment” make the most sense logistically, but it decreases costs and improves outcomes for enrollees.

Here’s a timeline of when CMS will implement D-SNP changes from the 2025 Final Rule.

Now, let’s dig into the specifics of the D-SNP changes in the 2025 Medicare Final Rule.

Enrollment Limits for D-SNPs with Affiliated Medicaid Plans

Starting in 2027, CMS will limit enrollment into certain D-SNP plans to individuals also enrolled in or in the process of enrolling in an affiliated Medicaid managed care organization (MMCO).

As a hypothetical example: If Sally is a dual eligible who wants to enroll in ABC Health’s D-SNP, she will need to be already enrolled or in the process of enrolling in ABC Health’s affiliated MMCO. She couldn’t enroll in ABC Health’s D-SNP if she was enrolled in XYZ Health’s Medicaid plan.

Sometimes D-SNP carriers, especially smaller, regional ones, don’t have an affiliated MMCO. Note that CMS will not limit D-SNP enrollments for these plan sponsors at the federal level; however, states may choose to limit D-SNP enrollments through their State Medicaid Agency Contracts (SMACs).

To further enforce care and benefit coordination, CMS is requiring that, by 2030, D-SNPs with an affiliated MMCO will have to disenroll any dually eligible individuals who are not already enrolled in the MMCO.

By 2030, D-SNPs with an affiliated MMCO will have to disenroll any dually eligible individuals who are not already enrolled in the MMCO.

Going back to our example, let’s say Sally was already enrolled in ABC Health’s D-SNP but getting her Medicaid coverage from XYZ Health. If she doesn’t enroll into ABC Health’s affiliated MMCO by 2030, she will be disenrolled from their D-SNP.

New Integrated D-SNP Monthly SEP to Replace Quarterly LIS SEP

CMS recognizes that limiting D-SNP enrollments like this may discourage carriers from participating in Medicaid managed care programs (if they don’t offer affiliated MMCOs, then they won’t be limited). To encourage participation in MMCOs, CMS is changing how they approach Special Enrollment Periods (SEPs) for dual eligibles.

Effective January 1, 2025, CMS is splitting the current Part D quarterly SEP for dually eligible and other Part D low-income subsidy (LIS) enrollees into two separate SEPs:

• A revised monthly SEP to enroll in a stand-alone prescription drug plan (PDP)
• A new monthly integrated-care SEP to allow dually eligible individuals to enroll into an integrated D-SNP plan when the individual also receives Medicaid services through an affiliated managed care plan

Enrollees won’t be able to enroll into any D-SNP of their choosing on a monthly or quarterly basis, only into a Medicaid managed care plan, so that they may concurrently enroll into the affiliated D-SNP. Essentially, dually eligible individuals who aren’t enrolled in integrated or affiliated plans will have more opportunities to do so; however, those individuals living in states without integrated plans will no longer be able to enroll quarterly and won’t have the ability to use the new monthly SEP.

Dually eligible individuals who aren’t enrolled in integrated/affiliated plans will have more opportunities to do so.

Running with our example from above, if Sally is not enrolled in ABC Health’s D-SNP and affiliated MMCO, then she would have an opportunity every month to do so, not needing to wait for AEP or a different SEP.

Please note that, because states differ on what types of D-SNP plans they offer (whether they offer them at all), the levels of coordination they achieve with Medicaid, and how often Medicaid switches are allowed, some of your dually eligible clients may not be able to utilize this new monthly integrated-care SEP. Because the quarterly SEP will cease to exist, some of your clients may have to wait until AEP to make changes.

Please check with the D-SNP carriers you represent and your state’s regulations to determine whether your clients will be able to utilize the new monthly integrated-care SEP or have to wait until AEP.

Here’s a table to help you make more sense of the SEP shifts:

Additional Details on How the New D-SNP SEP Will Work

The new monthly integrated D-SNP SEP isn’t just for newly eligible individuals or those newly looking for exclusively aligned enrollment. A dually eligible beneficiary already enrolled in an integrated plan could use the new SEP to make a lateral move to another integrated plan offered by the same carrier or a different one.

To switch to another integrated plan offered by a different carrier, the eligible individual must switch their Medicaid plan first, subject to the state guidelines, before enrolling into the same/related company’s integrated D-SNP (thereby achieving aligned enrollment).

Pay attention to which company provides the coordinated Medicaid plan at the time the member requests to switch. Enrollment into the D-SNP during the integrated-care SEP depends on coordination. Don’t try to enroll a client into an uncoordinated Medicaid plan. Just because a Medicaid plan and a D-SNP are from the same provider, doesn’t automatically mean they are coordinated plans. Verify types of D-SNPs and level of integration with carriers before trying to switch a client.

D-SNP Limits in Affiliated Medicaid MCO’s Service Area

Starting in 2027, CMS will also limit the number of D-SNPs an MA organization (MAO) — or its parent organization — can offer within the same service area as its affiliated Medicaid MCO to one. In our example, ABC Health can only offer one D-SNP per the service area of its affiliated MMCO.

The exception to this rule would be if a state Medicaid agency requires more than one D-SNP option for dually eligible individuals in the same service area as the MA carrier’s affiliated MMCO. In this case, state law will supersede CMS’ limitation.

D-SNP Look-Alike Threshold Lowered for 2025 & Future Years

According to KFF, just under 30 percent of dual eligibles are enrolled in a D-SNP. So, what kinds of plans are the other 70 percent enrolled in? Many of them are in “look-alikes,” MA plans that market to and have a majority of dual eligible plan members but do not offer coordinated care and wrap-around services of true D-SNPs nor adhere to federal and state D-SNP contracting requirements.

CMS is working to increase the percentage of dual eligibles enrolled in integrated D-SNPs and phase out look-alike plans; therefore, they are lowering the threshold for look-alike MA plans.

CMS will lower the look-alike threshold to 70 percent for plan year 2025 and to 60 percent for plan year 2026 and possibly more into the future.

Right now, the threshold for look-alike plans is 80 percent, which means 80 percent or less of their enrollees can be dually eligible. To further promote integrated care and benefits, CMS will lower the look-alike threshold to 70 percent for plan year 2025 and to 60 percent for plan year 2026 and possibly more into the future.

CMS is also prohibiting MAOs from offering additional look-alike plan contracts as of January 1, 2025, providing options for these carriers to transition their look-alike plan members to a different in-house MA plan, either a true D-SNP or regular MA plan with $0 premium. Expect your dually eligible clients in look-alike plans to receive notice from their carriers this fall with information about the plan transition.

Limit on D-SNP PPO Out-of-Network Cost-Sharing

Finally, starting in 2026, CMS will limit the amount that PPO D-SNPs can charge dually eligible enrollees for out-of-network care, specifically pertaining to certain Part A and B benefits. This means the MA carrier will absorb more of the cost and reduce cost shifting to Medicaid. We expect to see more specific guidance from CMS on this rule leading up to 2026.

What Does the 2025 CMS Final Rule Mean for Dual Eligibles?

CMS’ ruling aims to simplify the process for dually eligible individuals. Here are the main changes they can expect.

More Enrollment Opportunities for Integrated Plans

The new integrated-care SEP will give dual eligibles an opportunity every month to make the move from coordination-only D-SNPs to those that are fully or highly integrated. Although they could make a lateral move from one integrated plan to another, we predict this SEP will be used mainly to facilitate first-time exclusively aligned enrollment for dually eligible individuals.

Fewer Enrollment Opportunities for Non-Integrated Plans

Starting in 2025, dually eligible individuals will no longer be able to enroll in non-integrated D-SNPs quarterly like they had been able to in the past.

Fewer Coverage Change Opportunities in Select States

If the state doesn’t have integrated plans or doesn’t allow Medicaid switching monthly, then your dually eligible clients will have fewer opportunities to enroll into D-SNPs. Even if integrated plans are available, some states only allow Medicaid switches once per year or during a specific time frame; therefore, the monthly integrated-care SEP would be irrelevant (because enrollment must be exclusively aligned, this SEP necessitates a Medicaid switch).

Fewer D-SNPs from Parent Organizations

Because CMS will limit the number of D-SNP plans to one per parent organization in each one’s MCO service area, dual eligibles should have fewer options to sort through when shopping for plans. Although this might seem like a negative on the surface, CMS hopes this limitation will streamline and clarify the D-SNP process. One plan per parent organization will help reduce choice overload for potential enrollees.

Fewer D-SNP Look-Alikes

Reducing the threshold for look-alike MA plans will force carriers to transition dually eligible enrollees from look-alikes to a true D-SNP or another $0-premium MA plan. These beneficiaries should expect a notice from their carrier this fall with information about the plan change.

Increased Protection, Access, Affordability, and Care Coordination

The D-SNP landscape is a complex one. Through its 2025 Final Rule D-SNP changes, CMS is seeking to improve:

• Protection from confusing look-alike marketing tactics and choice overload
• Access to integrated plans every month
• More predictable costs with lower cost-sharing amounts
• More coordinated care through fully or highly integrated plans

CMS believes these benefits will greatly improve the experience and health outcomes of dually eligible beneficiaries.

What Do These CMS Rule Changes Mean for Agents?

These changes also mean opportunities and challenges for agents. Here’s what the updates mean for you.

Know Your State’s Rules

With all the changes, especially those around the new monthly SEP, familiarize yourself with your state’s Medicaid and D-SNP rules. If you’re licensed in several states, this is even more imperative!

Increased Need for Thorough Fact Finding

Since these changes only pertain to dually eligible individuals, it will be increasingly important to make sure that you fact find thoroughly and appropriately to know which enrollment timeline your client can follow and get them into a suitable plan.

Remember to be tactful and respectful when fact finding. You need to determine your client’s correct Medicaid level but questioning about financial status can be a sensitive topic. Establish trust with your client first by getting to know them and asking them questions about subjects other than money first.

Fewer Enrollment Opportunities for Non-Integrated D-SNPs

Make sure your portfolio includes fully or highly integrated D-SNPs from carriers with an affiliated MMCO to give your clients the best options.

Fewer D-SNP Options to Sort Through

Because of the new service area limitations, you should have a better sense of the D-SNP options available in your market. With only one plan per carrier per MCO service area, you may have more time and energy to contract with more carriers than you had in the past, rounding out your D-SNP offerings more fully for your clients.

Check in with Your Dually Eligible Clients

Now is the time to review what plans your dually eligible clients are in and make recommendations, especially if you have clients in non-integrated plans or look-alikes. Provide those in look-alikes with a heads up that their coverage might change in the fall due to new regulations. Consider scheduling appointments with those in non-integrated plans to look over integrated options and explain the changes.

Consider Your Timing

Checking in on D-SNP clients during AEP is now necessary. While agents may have pushed off a check in with D-SNP clients to outside of the AEP in the past, this is no longer going to cut it. Now, agents may need to service more D-SNP clients during AEP, especially if they don’t have the ability to use the new monthly integrated-care SEP due to the plans available in their area or their state’s Medicaid rules.

There are lots of changes in the Medicare industry this year, including Part D redesign updates and Ritter’s transition to PlanEnroll, but we’re here to help you every step of the way. With CMS working to simplify D-SNPs and improve health outcomes, now’s a wonderful time to consider selling D-SNPs if you don’t already. We expect to see big increases in the number of dually eligible individuals enrolled in integrated plans over the next few years due to these changes. We’ll keep you updated on any more developments.

Besides keeping you updated, Ritter loves to assist agents through personalized support, practical sales technology, and educational resources. All of this and more is completely free when you register with Ritter (also for free)!