Medicare Advantage (MA) is a government-sponsored program offering an alternative to traditional fee-for-service (FFS) Medicare, where benefits are provided to Medicare beneficiaries by private health plans, otherwise known as Medicare Advantage organizations (MAOs). MAOs offer plan designs with varying benefits and premiums.
In the Milliman MACVAT®, each MA plan’s benefit offerings and premium are evaluated to create an associated “value added,” Milliman’s proprietary measurement of plan value. This white paper highlights changes in value-added and key benefit trends in the MA market from 2024 to 2025. This discussion focuses on dual-eligible special needs plans (D-SNPs, that is, plans that target beneficiaries who are dually eligible for both Medicare and Medicaid). A separate paper discussing general enrollment plans can be found here. Please note that this paper will be revised and reissued following the release of January 2025 enrollment.
Average value added of D-SNPs decreases substantially after years of enhancements
Figure 1 shows the average annual growth in value added (total, Part C, and Part D) from 2022 to 2025. It also shows the Part C and Part D benefit values included in the total value added calculation.
Figure 1: Average value added and benefit value PMPM growth/decline for D-SNP MA plans in the last four years
Growth in D-SNP value added changed course considerably in 2025—from 2024 to 2025, the total value added of D-SNP MA plans shrunk by about $15 per member per month (PMPM), mainly due to benefit degradations in the Part C (medical) benefit. This is in stark contrast to the growth of about $27 and $44 PMPM from 2022 to 2023 and 2023 to 2024, respectively. Furthermore, this reverses a trend of value added increases for D-SNPs that dates back at least 10 years and is aligned with the general enrollment market at a loss of about 6% of value added from 2024 to 2025.
Value added decreases are primarily driven by reductions to Part C supplemental benefits. The Part D program changes, mainly the benefit redesign introduced by the Inflation Reduction Act (IRA) along with other headwinds, were met with benefit reductions across both the MA and prescription drug (PD) spaces for plans other than special needs plans (SNPs), but these reductions primarily manifested in MA benefit changes for D-SNPs. Because D-SNPs generally both target the LIPSA and offer a defined standard (DS) Part D benefit design, the vast majority of benefit enhancements provided by D-SNPs (and therefore value added) is through MA supplemental benefits. In contrast to the changes from 2023 to 2024, the primary drivers of these supplemental benefit degradations were felt in reductions of the amount covered by cash-like benefits such as over-the-counter (OTC) benefit cards, combined or “combo” benefits, and nonuniform benefits (NUBs), which include benefits for both food and general supports for living (i.e., utilities, gas, etc.).
Part D value added growth is slowing considerably. The VBID-driven Part D cost-sharing coverage for low-income subsidy (LIS) members, commonly referred to as $0 LIS buydowns, are ubiquitous in the D-SNP market as of 2025, so the improvement in any Part D value added is small compared to prior years, when nonnational organizations were still looking toward adding $0 LIS buydowns via the VBID program.
Growth in the Part B buydown for D-SNPs emerged in 2025. As mentioned above, D-SNPs generally target the LIPSA, as premiums up to the LIPSA are funded by the government and, therefore, do not impact the member. Similarly, all Part B premiums are also covered by Medicaid for nearly all dual-eligible members1 and, prior to 2025, Part B buydowns were essentially nonexistent in the D-SNP market. However, Figure 2 shows a considerable increase in the prevalence of Part B buydowns in 2025 for D-SNPs. This significant increase in the Part B buydown prevalence, paired with an increase in the average monthly Part B buydown amount, coincides with a change in the August rebate submission rules from the Centers for Medicare and Medicaid Services (CMS) and the unprecedented likelihood of plans missing the direct subsidy by a large magnitude.
Figure 2: Average value and prevalence of Part B buydown for D-SNPs from 2022 through 2025
D-SNPs pulled back slightly on key uniformly offered supplemental benefits
MA plans typically offer additional benefits not provided under FFS Medicare, referred to as supplemental benefits. This discussion focuses on mandatory supplemental benefits and excludes optional supplemental benefits, for which members elect coverage and pay an additional premium. Nonuniform benefits are discussed in the next section.
Dental, vision, and hearing have consistently been the most popular uniformly offered “standalone” Part C supplemental benefits offered by D-SNPs, and these benefits continue to be widely offered in 2025.2 Figure 3 shows the average “standalone” benefit value for dental, vision, and hearing benefits from 2022 through 2025, respectively. “Standalone” benefits refer to benefits that are offered not as part of a combined or flex benefit—that is, benefits that are not offered as part of a package where multiple benefits of different types can be used under one visit or dollar limit.
Figure 3: Average “standalone” dental, vision, and hearing benefit values for D-SNPs from 2022 through 2025
Dental, vision, and hearing benefit values remain relatively stable and consistently available for dual-eligible plans amidst benefit reductions in 2025. These benefits have become essential for D-SNPs to be competitive in today’s MA landscape. While these benefits were not immune from the benefit reductions in 2025, as we do see some downward shifts in average benefit value, plans seemingly protected these benefits at the expense of others.
Standalone OTC benefit values continue to decline into 2025. While we observe a steady decline in standalone OTC benefit value due to benefit reductions in 2025, we also observe a steady shift of these benefits from standalone offerings into packages that offer multiple benefits of different types under one package benefit.3 We are increasingly seeing this benefit being combined with other cash-like benefits, particularly those offered nonuniformly through the VBID program such as food and general supports for living. Further discussion of these benefits in the context of combined packages can be found in the section below.
Combined benefit offerings resulted in the largest benefit reductions for 2025
Combined benefits, or “combo” benefits, are designed to include multiple supplemental benefits in one package and may have a total dollar limit across all benefits in the package. Many different combinations of benefits are offered through this design and, while shared preventive and comprehensive dental limits fall into the combo benefit category when filed in the Plan Benefit Package (PBP), we do not include them in this discussion and instead focus on “true” combo benefits, which include multiple types of unrelated benefit types.
Figure 4: Prevalence and benefit value of combined benefit packages from 2022 through 2025
Combo benefits were the key driver of decreased value added for D-SNPs in 2025. Figure 4 shows the prevalence of combo benefits in the market alongside the average benefit value of those combo packages across the past four years. While we do see a significant decrease in the average benefit value of combo packages and the percentage of plans offering at least one combo package for the first time in a number of years, the percentage of members enrolled in a plan with at least one of these packages actually increased compared to 2024 levels. This suggests that the presence of these combo package options may be a key driver to attracting and retaining membership even while a reduced dollar value is available to members.
Figure 5: Percentage of D-SNPs offering combo packages covering certain benefits in 2024 and 2025
Combined benefits are often associated with OTC and nonuniform benefits (NUBs). Figure 5 shows combined packages that cover OTC benefits or NUBs are available to over 80% of the D-SNP population. Broken down further, we observed OTC benefits or NUBs offered to more than 90% of members by national carriers dominating the D-SNP market in 2025, markedly greater than the rest of the market, at around 75% of D-SNP members. However, relative to 2024, we observe a narrowing of this gap as the national carriers actually decreased offerings by about 1% for OTC benefits and 5% for NUBs while the rest of the market increased by approximately 12% and 7%, respectively. Furthermore, the vast majority of those packages combine both OTC and nonuniform benefits together as the combined benefit. In particular, food and produce and general living supports are common NUBs to combine with OTC cards on D-SNPs.
Dental, vision, and hearing benefits are becoming less common to cover under a combined benefit structure. While dental, vision, and hearing benefits are covered in the vast majority of D-SNPs, they are becoming less prevalent to be offered as part of a combined benefit package. From 2024 to 2025, there is a decrease of 6.1 percentage points (from 14.3% to 8.2%) of true combo packages including at least one of these three benefits.
Nonuniformly offered benefit offerings through the VBID program remain strong in 2025, however, CMS is terminating the MA Value-Based Insurance Design (VBID) model starting with CY 2026
Through both the VBID demonstration program and the benefit flexibility known as Special Supplemental Benefits for the Chronically Ill (SSBCI), MAOs can provide reduced cost sharing or additional supplemental benefits for enrollees based on condition and, under VBID only, socioeconomic status or Area Deprivation Index (ADI).4 Although the prevalence of VBID offerings dipped slightly in the 2025 D-SNP market (from about 93% to 90%), the percentage of members enrolled in a plan participating in the VBID program is very comparable to 2023 and 2024. Figure 6 shows the prevalence of SSBCI and VBID packages alongside certain high-propensity benefits typically included in these packages across the four years of interest.
On December 16th, 2024, CMS announced that the VBID model will be terminated after 2025 due to the model’s substantial an unmitigable costs to the Medicare Trust Funds.5 This will have a material impact to the 2026 D-SNP market as nonuniform benefit packages offered through VBID have become a common approach to provide access to certain benefits for D-SNP plans. Of note, reduced or $0 Part D cost sharing has been one of the most common VBID interventions amongst D-SNP plans in recent years that will be no longer available without a material change in the underlying financials of the bid. MAOs are able to offer $0 Part D cost sharing through an enhanced alternative (EA) plan design with $0 copays to mimic the current $0 Part D benefit design under VBID. However, this will reduce LICS payments from CMS resulting in higher Part D plan liability than offering equivalent benefits through VBID.
It will be critical for MAOs and other healthcare stakeholders to understand current 2025 VBID benefit offerings and evaluate how the market is likely to react come 2026 when this program is terminated. Plans will still be allowed to offer SSBCI, which like VBID, allows reduced cost sharing or additional benefits under the Part C benefit to enrollees with certain conditions. VBID, however, is the only flexibility which allows benefits to be limited to beneficiaries based on their socioeconomic status – and this approach has been almost exclusively used under VBID to offer reduced Part D cost sharing. We may expect plans to transition certain VBID benefits to SSBCI, where allowable, in 2026.
Figure 6: Percentage of members covered by a VBID or SSCBI package, and certain benefit flexibilities for D-SNPs in the last four years
SSBCI continues to decrease in prevalence in the D-SNP market. As referenced above, one of the key distinguishing characteristics between VBID and SSBCI packages is that targeting of socioeconomic status is only allowable through the VBID program. Given that D-SNPs generally have 100% low-income members, plans are increasingly moving away from disease-specific offerings to D-SNP populations offered under SSBCI in favor of the more broadly reaching VBID packages. Considering CMS’ announcement to terminate VBID after 2025, we may expect SSBCI prevalence to jump in 2026, though there are different administrative mechanisms that plans need to adhere to when offering benefits under SSBCI versus VBID6, which became more stringent with the passing of the CY 2025 final rule.7
While the percentage of beneficiaries with coverage through VBID will decrease for the first time in years, the food and produce benefit continues to increase in prevalence among D-SNPs. About 95% of D-SNP beneficiaries will have access to food and produce benefits through nonuniform benefit offerings (i.e., VBID or SSBCI packages), the highest in any year since the VBID program’s inception. Although not quite all beneficiaries will have access to these benefits, the increasing benefit penetration percentage aligns with the requirement in the 2025 VBID application that plans offer “a minimum of two Health-Related Social Needs (HRSN) benefits selected from the categories of food and nutrition, transportation, and housing and living environment.”8
The percentage of members with access to the LIS copay reduction ($0 Rx cost sharing) remains around 90%. Despite the major Part D plan design changes that other segments of the Part D market experienced due to the IRA, D-SNPs continue to offer $0 cost sharing to their members at high rates. The avoidance of removing or reducing these cost-sharing reductions signals that MAOs see this as an essential benefit to attract and retain members and serve the needs of the low-income beneficiaries enrolling in these plans in the D-SNP market in 2025. The removal of this benefit offering pathway in 2026 creates substantially less leverage for D-SNP plans to attract and retain members through Part D benefits unless they opt to offer an EA plan design, as discussed above, which will result in a significant outlay of additional Part C rebate dollars to ensure the member is not paying any premium above the LIPSA, all else equal.
Data sources and methodology
To perform these analyses, we relied on detailed information on MA benefits, premiums, and enrollment as released by CMS. Enrollment used to calculate weighted averages is from February of each year, with the exception of 2025, which relies on September 2024 enrollment crosswalked to 2025.
The estimated value of the Part C and Part D benefits is evaluated using Milliman’s internal pricing models, including the 2025 Milliman Medicare Advantage Competitive Value Added Tool (Milliman MACVAT®), which is available for external license, calibrated to county-specific 2025 FFS costs with consistent medical management and population base assumptions for each county. The 2022 through 2025 benefits within the 2025 MACVAT are evaluated on a consistent basis, without adjustment for year-over-year healthcare trends, such that the only differences between the years presented are the benefits and premiums offered by a plan in each year. This information is used in conjunction with plan-specific benefits, premiums, and benchmark revenue by county released by CMS to determine the value added for each plan.
While the major Part D benefit redesign from the IRA will go into effect in 2025, the 2022 through 2024 Part D benefit values presented in this paper are modeled under the 2025 benefit redesign, meaning the 2022 through 2024 values still reflect the plan’s actual formulary and benefits (e.g., deductibles, cost sharing in standard coverage phase, non-Part D drug coverage, etc.) but excludes enhanced gap coverage and assumes the member has a $2,000 MOOP in each year. This approach allowed for a more apples-to-apples comparison of Part D benefit changes year-over-year and does not credit or discredit plans for inherent benefit changes that are mandatory (e.g., the removal of the coverage gap phase in 2025 does not influence the 2024 to 2025 benefit value changes for plans with enhanced gap coverage in 2024).
This analysis excludes general enrollment, chronic SNP (C-SNP), institutional SNP (I-SNP), Prescription Drug Plan (PDP), medical savings account (MSA), Medicare-Medicaid Plan (MMP), Program of All-Inclusive Care for the Elderly (PACE), Part B-only, and cost plans. We excluded all U.S. territories from these results.
2025 will usher in more unknowns as revenue pressures increase
The 2025 D-SNP market was the first time in years we saw notable benefit degradation from plans and, while the market continues to grow in membership, may signal a growth process slowed more than we have historically seen. By 2026 the result will likely be significant benefit design changes, given the termination of VBID and looming impacts to the entire MA market—including drug price negotiations, star ratings methodology changes, continued revenue pressures, changes in member buying habits and shopping preferences, and market reactions to competitor strategies in 2025, just to name a few.
It is essential for MAOs and other healthcare stakeholders to understand the local market implications of the anticipated market changes noted above on general enrollment competitor benefit designs. Healthcare stakeholders who understand these changes in relation to their own strategic objectives will be best equipped to minimize revenue reductions compared to competitors and mitigate risks from industry headwinds. The Milliman MACVAT value added metric, with its underlying methodology and data, provides the financial clarity healthcare executives need to develop rational strategic benefit designs while addressing market pressures head-on.
Caveats, limitations, and qualifications
The information in this paper is intended to describe changes and trends in the Medicare D-SNP market. It may not be appropriate, and should not be used, for other purposes.
We relied on publicly available enrollment and premium data from the Centers for Medicare and Medicaid Services (CMS) and the Milliman MACVAT to support the data presented in this paper. If this information is incomplete or inaccurate, our observations and comments may not be appropriate. We reviewed the data for reasonability but did not audit the data.
Milliman has developed certain models to estimate the values included in this paper. The intent of the models was to estimate the value added of services above traditional Medicare for 2025 Medicare Advantage Prescription Drug (MA-PD) plans, as well as summarizing all benefits offered in the MA-PD market from 2022 through 2025. Milliman has reviewed the models, including their inputs, calculations, and outputs, for consistency, reasonableness, and appropriateness to the intended purpose and in compliance with generally accepted actuarial practice and relevant Actuarial Standards of Practice (ASOP).
Julia Friedman, Jordan Cates, and Chandler Bentley are members of the American Academy of Actuaries and meet the qualification standards of the American Academy of Actuaries to render the actuarial opinion contained herein.
1 Medicaid covers the Part B premium for Qualified Medicare Beneficiary (QMB) program-only members without other Medicaid, Medicaid (QMB+) members, Specified Low-Income Medicare Beneficiaries (SLMBs)-only without other Medicaid, SLMBs with Medicaid (SLMB+), and Qualifying Individuals (QIs). For Qualified Disabled Working Individuals (QDWIs), the Part B premium is not covered, and full-benefit Medicaid coverage of payment of the Part B premium may be covered by the state. See https://www.cms.gov/outreach-and-education/medicare-learning-network-mln/mlnproducts/downloads/medicare_beneficiaries_dual_eligibles_at_a_glance.pdf.
2 Laktas, J., Yeh, M., & Friedman, J.M. (March 21, 2023). Prevalence of Supplemental Benefits in the D-SNP Medicare Advantage Marketplace: 2019 to 2023. Milliman White Paper. Retrieved December 13, 2024, from https://www.milliman.com/en/insight/prevalence-supplemental-benefits-d-snp-medicare-advantage-marketplace-2023.
3 Yeh, M. & Yen, I. (April 3, 2024). 2024 Combined Benefits in Medicare Advantage: Tracking Benefit Strategy and Options. Milliman White Paper. Retrieved December 13, 2024, from https://www.milliman.com/en/insight/2024-combined-benefits-medicare-advantage-tracking-benefit-strategy.
4 Kotecki, L. & Benjamin, T. (March 2024). Area Deprivation Index Introduced to the Medicare Advantage Value-Based Insurance Design Model for CY 2025. Retrieved December 13, 2024, from https://www.milliman.com/en/insight/area-deprivation-index-medicare-advantage-vbid-model-cy-2025.
5 CMS. Medicare Advantage Value-Based Insurance Design (VBID) Model to End after Calendar Year 2025: Excess Costs Associated with the Model Unable to be Addressed by Policy Changes. Retrieved December 17, 2024, from https://www.cms.gov/blog/medicare-advantage-value-based-insurance-design-vbid-model-end-after-calendar-year-2025-excess-costs.
6 https://www.cms.gov/medicare/health-plans/healthplansgeninfo/downloads/supplemental_benefits_chronically_ill_hpms_042419.pdf.
7 https://www.federalregister.gov/documents/2024/04/23/2024-07105/medicare-program-changes-to-the-medicare-advantage-and-the-medicare-prescription-drug-benefit.
8 CMS. Medicare Advantage Value-Based Insurance Design Model. Retrieved December 13, 2024, from https://www.cms.gov/priorities/innovation/innovation-models/vbid#cy2025.