Hoover Institution
04/23/2026 | Press release | Distributed by Public on 04/23/2026 02:41
Improving Care for Medicare Beneficiaries in Long-Term Care
- Health Care
- Answering Challenges to Advanced Economies
More than 1.2 million Americans live in nursing homes, and that number is rising. Institutional Special Needs Plans (I-SNPs) are Medicare Advantage plans designed for long-term-care residents that reduce hospitalizations through on-site clinical teams and aligned financial incentives. Yet few eligible beneficiaries are enrolled. This essay reviews the evidence on I-SNPs and recommends regulatory reforms to make I-SNPs more successful and accessible.
Key Takeaways
- The prevalence of Medicare beneficiaries requiring long-term institutionalized care is rising, which makes improving insurance design for these beneficiaries a national imperative.
- Institutionalized Special Needs Plans (I-SNPs) are a specialized type of Medicare Advantage (MA) plan for long-term care residents that that encourages better care through on-site clinical staff. It does so by creating a financial partnership between the insurer and the care facility (where they share the cost of care) and by focusing on initiatives that help avoid unnecessary medical care.
- I-SNPs reduce hospitalizations for nursing home residents and better align payer and provider incentives. But only 7.6 percent of eligible Medicare beneficiaries are enrolled. Expanding and improving enrollment channels should be a priority as the population of residents in long-term-care facilities continues to grow.
- The Centers for Medicare & Medicaid Services (CMS) should require skilled nursing facilities to provide all eligible beneficiaries with clear information about their three distinct Medicare coverage options: traditional Medicare, general MA plans, and I-SNP plans. CMS should also reform auto-enrollment practices that default dual-eligible beneficiaries (eligible for both Medicare and Medicaid) into fee-for-service Medicare.
- I-SNPs serve a fundamentally different population from that of community-dwelling MA enrollees and should be regulated accordingly. CMS should modernize the I-SNP program to better suit the needs of beneficiaries by modifying the quality ratings, marketing rules, and provider network requirements.
Improving Care for Medicare Beneficiaries in Long-Term Care by Hoover Institution
Cite this essay:
John Connolly, Anthony DiGiorgio, and Brian J. Miller, "Improving Care for Medicare Beneficiaries in Long-Term Care," Hoover Institution, Healthcare Policy Working Group, April 2026.
About the Authors
John Connolly, MD, is a physician in the Department of Medicine at the Johns Hopkins University School of Medicine, where his work focuses on healthcare delivery and policy for vulnerable populations. His research interests include Medicare benefit design and the intersection of insurance structure and clinical outcomes for institutionalized patients.
Anthony DiGiorgio, DO, MHA, is a neurosurgeon and health policy researcher at the University of California, San Francisco, where he also holds appointments in the Department of Neurological Surgery and the Philip R. Lee Institute for Health Policy Studies. His research spans healthcare financing, quality measurement, and the application of artificial intelligence in medicine.
Brian J. Miller, MD, MBA, MPH, is a visiting fellow at the Hoover Institution focused on Medicare payment policy and FDA regulatory policy. A practicing hospitalist at Johns Hopkins Hospital and an associate professor of medicine and business (courtesy) at Johns Hopkins University, he is also a commissioner of the Medicare Payment Advisory Commission and a trustee of the North Carolina State Health Plan.
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