Dual Eligible Integration

Three tiers of D-SNP integration now exist in the Medicare Advantage market, and CMS is systematically pushing the entire landscape upward toward the highest tier. Coordination-only D-SNPs, the baseline category that dominated the market for years, are being phased into irrelevance through enrollment restrictions and regulatory tightening. Highly Integrated D-SNPs and Fully Integrated D-SNPs, together with the Applicable Integrated Plan designation, represent the regulatory future. Between 2025 and 2027, a series of rulemaking actions will fundamentally restructure which plans can enroll dual eligibles, how enrollment flows between Medicare and Medicaid managed care, and which organizations have the operational capacity to compete in this market.

The timing of this restructuring matters. The Financial Alignment Initiative ended in December 2025, and the eight states that transitioned their Medicare-Medicaid Plans into D-SNPs are now operating under the same regulatory framework as every other D-SNP in the country. The C-SNP enrollment surge is pulling dual eligibles into plans with no Medicaid integration requirements. And OBBBA’s Medicaid work requirements will begin generating eligibility churn in the same population these integration rules are designed to stabilize. The regulatory architecture is moving toward greater integration. The operating environment is creating forces that work against it.

The Three Integration Tiers

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Coordination-only D-SNPs are the lowest tier. They hold a Medicare Advantage contract with CMS and a State Medicaid Agency Contract that requires them to coordinate Medicaid benefit delivery, but the coordination obligation is minimal. CO D-SNPs must notify the state when a member is admitted to a hospital or skilled nursing facility, and they must maintain a model of care that addresses the needs of dual eligible enrollees. They are not required to cover any Medicaid services, coordinate long-term services and supports, or integrate behavioral health. A CO D-SNP is, in operational terms, a Medicare Advantage plan that restricts enrollment to dual eligibles and files a state contract. CMS has made clear through successive rulemaking cycles that CO D-SNPs do not deliver the level of integration dual eligibles need, and the policy trajectory is to constrain their role.

Highly Integrated D-SNPs occupy the middle tier. A HIDE SNP must, in addition to meeting CO requirements, provide coverage of long-term services and supports, behavioral health services, or both, either directly through the D-SNP or through a Medicaid managed care organization controlled by the same parent company. Starting in 2025, HIDE SNPs must cover their entire D-SNP service area under the Medicaid contract, eliminating the previous practice of offering HIDE designation in only a portion of the plan’s geographic footprint. HIDE SNPs provide meaningful integration beyond the CO baseline, but they do not require exclusively aligned enrollment. A HIDE SNP member may receive their Medicare through the D-SNP and their Medicaid through an unrelated managed care organization, which limits the plan’s ability to coordinate the full spectrum of services.

Fully Integrated D-SNPs are the highest tier. A FIDE SNP holds both a Medicare contract with CMS and a Medicaid managed care contract with the state, providing coverage of essentially all Medicaid services, including LTSS and behavioral health, through a single managed care organization. Starting in 2025, all FIDE SNPs must operate with exclusively aligned enrollment, meaning every FIDE SNP member must receive both their Medicare and Medicaid coverage through plans owned and operated by the same parent organization. This requirement made all FIDE SNPs into Applicable Integrated Plans as of January 2025.

The AIP designation carries specific beneficiary protections that lower integration tiers do not. AIPs must provide integrated member materials, including a single identification card and unified plan communications. They must offer integrated grievance and appeals processes that apply both Medicare and Medicaid standards to coverage disputes. They must conduct integrated health risk assessments that capture needs across both programs. These protections mirror features that beneficiaries valued in the Financial Alignment Initiative’s Medicare-Medicaid Plans, and their inclusion in the AIP framework was a deliberate effort to carry forward FAI-era integration features into the permanent regulatory structure.

The 2025 to 2027 Regulatory Ratchet

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CMS has used three consecutive rulemaking cycles to tighten integration requirements, and each cycle has raised the floor.

The CY 2025 final rule, published April 2024, established exclusively aligned enrollment as a requirement for all FIDE SNPs. It expanded HIDE SNP benefit requirements to include full service area coverage and strengthened the behavioral health and LTSS coverage mandates. It lowered the D-SNP look-alike threshold from 80 percent to 70 percent, meaning that any non-D-SNP Medicare Advantage plan with 70 percent or more dual eligible enrollment would lose its contract. The look-alike rule was designed to close the regulatory arbitrage that allowed plans to attract dual eligibles through benefit design mimicking D-SNPs without meeting any D-SNP coordination or integration requirements. The 2025 rule also created the monthly integrated care Special Enrollment Period for full-benefit dual eligibles and replaced the quarterly SEP that had previously governed dual eligible plan switching.

The CY 2026 rule continued the trajectory. The look-alike threshold dropped to 60 percent. CMS required integrated identification cards for all AIPs starting in 2026 and integrated health risk assessments by 2027. D-SNP PPOs became subject to new limits on out-of-network cost-sharing amounts, shifting cost exposure from Medicaid to the MA plan for out-of-network Part A and Part B services.

The CY 2027 proposed rule contained the most consequential structural change. At §422.514(h), CMS proposed that beginning in 2027, any D-SNP whose parent organization also operates a Medicaid managed care organization in the same service area must limit new enrollment to full-benefit dual eligibles who are enrolled in, or in the process of enrolling in, the affiliated Medicaid MCO. Existing unaligned enrollees would be grandfathered until 2030, giving plans a three-year runway to achieve full alignment. The practical effect is that by 2030, every D-SNP with an affiliated Medicaid MCO will operate with exclusively aligned enrollment, whether it is designated as FIDE, HIDE, or CO. The distinction between integration tiers will remain in terms of benefit coverage and coordination obligations, but the enrollment structure will converge.

For plans currently operating unaligned D-SNPs in states where they also hold Medicaid MCO contracts, the §422.514(h) requirement creates a strategic decision point. They can transition existing D-SNP products to exclusively aligned enrollment ahead of the 2027 deadline, build the operational infrastructure for aligned enrollment during the grandfathering period, or exit the D-SNP market in service areas where alignment is not operationally feasible. The grandfathering provision provides time but not flexibility; by 2030, unaligned enrollment in these plans is no longer permitted.

The Monthly Integrated Care SEP

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The monthly integrated care Special Enrollment Period, effective January 1, 2025, replaced the quarterly SEP that previously allowed dual eligibles and LIS recipients to switch Medicare Advantage plans. Under the new structure, full-benefit dual eligibles can use the integrated care SEP to enroll in a FIDE SNP, HIDE SNP, or AIP once per month, every month of the year. The SEP can also be used to switch between integrated plans or to disenroll from a D-SNP and return to Original Medicare with a standalone Part D plan.

The integration-quality filter is the SEP’s policy innovation. Unlike the prior quarterly SEP, which permitted enrollment into any MA plan including CO D-SNPs and non-D-SNP plans, the integrated care SEP restricts enrollment to plans meeting FIDE, HIDE, or AIP standards. CMS designed this restriction to channel enrollment toward more integrated plans, on the theory that if dual eligibles are going to switch plans frequently, they should at least switch into plans with higher integration requirements.

The SEP’s interaction with broker and agent incentives is the implementation risk. Dual eligibles have historically been subject to intensive marketing from agents who earn commissions on each enrollment. The monthly SEP increases the frequency of potential plan switches, which increases the commission opportunities for agents willing to churn enrollment. CMS has attempted to constrain this by limiting the SEP to integrated plans, but the restriction only works to the extent that integrated plans are available in the beneficiary’s market. In counties where no FIDE, HIDE, or AIP plan operates, the integrated care SEP provides no integrated options, and the monthly disenrollment SEP still permits the beneficiary to leave any MA plan, including integrated D-SNPs. The net enrollment effect in any given market depends on the local plan landscape, which varies enormously by state.

The C-SNP Enrollment Surge

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C-SNP enrollment grew by approximately 480,000 members from 2024 to 2025, a 71 percent increase in a single year. By early 2025, roughly 1.2 million beneficiaries were enrolled in C-SNPs, nearly all of them in plans targeting diabetes or cardiovascular conditions. C-SNP enrollment growth accounted for more than three-quarters of the total increase in SNP enrollment over the same period, while D-SNP enrollment grew by only 3 percent.

The timing is not coincidental. The acceleration of C-SNP growth corresponds with the implementation of stricter D-SNP integration requirements. As CMS tightened look-alike thresholds, required exclusively aligned enrollment for FIDE SNPs, and imposed new benefit mandates on HIDE SNPs, some insurers shifted their growth strategy toward C-SNPs, which carry none of these requirements. C-SNPs restrict enrollment to beneficiaries with specific chronic conditions, not to dual eligibles, but there is significant overlap. In January 2025, approximately one in five C-SNP enrollees was dually eligible. Health Affairs research found that 27.5 percent of full-benefit dual eligible beneficiaries who newly enrolled in C-SNPs in 2025 had previously been in plans offering some form of Medicare-Medicaid integration.

The regulatory concern is that C-SNPs are becoming a vehicle for enrolling dual eligibles outside the integration framework. A dual eligible who moves from a HIDE SNP to a C-SNP retains their Medicare Advantage coverage and may gain condition-specific care management, but they lose whatever Medicaid coordination the D-SNP was providing. The CY 2027 proposed rule included a Request for Information on C-SNP standards, signaling that CMS is evaluating whether to impose additional requirements on C-SNPs to address this dynamic. Possible interventions include tightening C-SNP eligibility criteria, requiring C-SNPs to meet minimum Medicaid coordination standards when enrolling dual eligibles, or counting C-SNP dual eligible enrollment toward the look-alike threshold.

UnitedHealth Group accounts for half of all C-SNP enrollment nationally. That concentration means regulatory action on C-SNPs would disproportionately affect a single organization, which creates political dynamics that may slow or shape any tightening.

State-by-State FIDE/HIDE Availability

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The availability of integrated D-SNPs varies dramatically by state, and the variation is primarily a function of state Medicaid agency decisions rather than federal requirements. CMS sets the regulatory floor for each integration tier, but the state determines whether to contract with plans at the FIDE or HIDE level, which organizations receive State Medicaid Agency Contracts, and whether to require exclusively aligned enrollment beyond the federal minimum.

As of September 2025, FIDE SNPs operated in a limited number of states. New York has the most established FIDE SNP infrastructure, building on its legacy of managed Medicaid integration and the former FIDA demonstration. Massachusetts, Ohio, Rhode Island, and Illinois transitioned FAI plans into FIDE SNPs starting in late 2025 and early 2026. Arizona, the District of Columbia, Florida, Hawaii, Indiana, Kansas, Kentucky, Nebraska, New Jersey, New Mexico, Texas, Virginia, Washington, and Wisconsin each had at least some HIDE or FIDE SNP availability, though coverage varied by county and plan.

Twenty-nine states offered D-SNPs that enrolled partial-benefit dual eligibles as of September 2025, a practice that exclusively aligned enrollment rules will progressively restrict. States without any FIDE or HIDE SNP availability leave their dual eligible populations with CO D-SNPs as the only D-SNP option, or with no D-SNP at all in some rural counties.

The state Medicaid agency is the gatekeeper. A health plan cannot offer a FIDE SNP without a Medicaid managed care contract that covers the relevant services. If the state carves behavioral health or LTSS out of managed care, those carve-outs may prevent plans from meeting FIDE requirements. Pennsylvania, for example, lost its FIDE SNP designation in 2025 because the state’s behavioral health carve-out conflicted with the updated FIDE definition requiring behavioral health coverage. States that maintain service carve-outs face a structural barrier to FIDE SNP availability that no amount of plan interest can overcome without a state policy change.

The Payvider Integration Advantage

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Payviders, organizations that both deliver care and operate health plans, hold a structural advantage in the FIDE SNP market that becomes more pronounced as integration requirements tighten.

A FIDE SNP must coordinate medical care, behavioral health, LTSS, and Medicaid benefits through a single organization or its affiliates. For a traditional insurer, this means contracting with external providers for every element of the integration mandate. The insurer negotiates network contracts for medical services, behavioral health, home and community-based services, and nursing facility care, then attempts to coordinate across those separate contractual relationships. Each contract introduces a coordination seam, and every seam is a point where integration can fail.

A payvider builds integration internally. UPMC in Pennsylvania operates both the health plan and a substantial portion of the care delivery infrastructure. Kaiser Permanente, CareSource in Ohio, and the large Medicaid MCO-provider systems that operate in New York and California can deliver care coordination through their own employed or closely affiliated clinicians. The care coordinator, the primary care physician, the behavioral health provider, and the LTSS case manager may all work within the same organization or share the same electronic health record. Integration is not a contracting exercise. It is an operational reality.

In the post-FAI environment, where FIDE SNPs are the primary vehicle for dual eligible integration and state Medicaid agencies are evaluating which plans to contract with, the payvider’s ability to demonstrate operational integration rather than contractual integration is a competitive advantage. States choosing FIDE SNP partners should evaluate integration capacity, not enrollment volume. A plan with 100,000 D-SNP members and no internal care delivery may be less capable of meeting FIDE requirements than a payvider with 20,000 members and an integrated delivery system. The distinction matters for beneficiaries, and it should matter for state contracting decisions.

Related Reading

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MCR-05_08 The Dual Eligible Provider Opportunity and Risk MCR-08_02 HIDE SNPs and Behavioral Health Integration: Requirements, Gaps, and the Provider Capacity Crisis MCR-01_07 LEAD and ASM: New Pathways for ACOs and Specialists