More than 1.2 million Americans live in nursing homes, and a growing share are missing out on a Medicare Advantage option that could keep them out of the hospital.
Institutionalized Special Needs Plans — known as I-SNPs — are designed specifically for long-term care residents. They place clinical staff on-site, align financial incentives between insurers and facilities, and focus on preventing unnecessary medical care. Research shows they reduce hospitalizations. But only 7.6% of eligible Medicare beneficiaries are enrolled.
A new policy paper from the Hoover Institution argues that’s a missed opportunity — and it’s calling on federal regulators to fix it.
Why I-SNPs Work
I-SNPs create a financial partnership between the insurer and the nursing home. Both share the cost of care, which gives them a shared interest in keeping residents healthy and out of the emergency room.
The plans also station nurse practitioners and other clinical staff directly in facilities, allowing faster intervention when a resident’s condition changes. That model has been shown to cut hospital admissions, which are costly, disruptive, and often dangerous for frail older adults.
According to industry reports, I-SNPs are cutting nursing home hospitalizations by providing more consistent on-site care. But despite the evidence, enrollment remains low.
The Enrollment Problem
The paper, authored by physicians John Connolly, Anthony DiGiorgio, and Brian J. Miller, identifies several barriers.
First, many nursing home residents aren’t given clear information about their Medicare options. When they enter a facility, they’re often automatically defaulted into traditional Medicare — especially if they’re dual-eligible for both Medicare and Medicaid.
Second, I-SNPs are regulated the same way as general Medicare Advantage plans, even though they serve a fundamentally different population. The authors argue that quality ratings, marketing rules, and provider network requirements don’t fit the realities of institutional care.
What the Authors Want CMS to Do
The paper recommends that the Centers for Medicare & Medicaid Services require skilled nursing facilities to provide all eligible residents with clear, written information about three coverage options: traditional Medicare, general Medicare Advantage plans, and I-SNPs.
It also calls for reforming auto-enrollment practices that funnel dual-eligible beneficiaries into fee-for-service Medicare by default.
Finally, the authors want CMS to modernize I-SNP regulations to better reflect the needs of nursing home residents — including updating quality measures, easing marketing restrictions, and adjusting network requirements.
Why It Matters Now
The number of Americans living in nursing homes is rising, and the population is getting older and sicker. Miller, a visiting fellow at the Hoover Institution and a commissioner on the Medicare Payment Advisory Commission, said improving insurance design for institutionalized beneficiaries should be a national priority.
The paper was published April 23, 2026, as part of the Hoover Institution’s Healthcare Policy Working Group.
With Medicare Advantage enrollment growing across the board, the authors argue it’s time to make sure nursing home residents aren’t left behind.
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