The Centers for Medicare & Medicaid Services (CMS) has officially announced that the Value-Based Insurance Design (VBID) Model will be discontinued at the end of 2025. This decision marks the conclusion of a model that aimed to test innovations in Medicare Advantage (MA) plan design, including supplemental benefits, hospice coverage, and advanced care coordination.
What Was the VBID Model?
Introduced in 2017, the VBID model was designed to:
- Encourage MA plans to offer targeted benefits to beneficiaries with chronic conditions
- Improve care coordination and reduce avoidable healthcare costs
- Expand hospice coverage under Medicare Advantage through the Hospice Benefit Component
It was hailed as a significant step toward modernizing Medicare Advantage and personalizing care delivery.
What This Means for Agents
- Fewer unique plan differentiators: Without VBID, many carriers may need to revisit their plan designs for 2026, potentially shrinking the range of unique features agents have promoted in recent years.
- Increased competition among plans: Expect more aggressive competition based on core features like premiums and networks.
- Earlier compliance communications: Carriers are likely to update agents earlier than usual to prepare for 2026 changes. Staying informed will be key.
What This Means for Beneficiaries
- Loss of targeted chronic care support: Benefits for conditions like COPD, CHF, or diabetes may be scaled back or eliminated depending on the plan.
- Changes to hospice benefits: Hospice care will revert back to traditional Medicare, potentially causing confusion during a sensitive time.
- Higher need for agent guidance: These changes may confuse seniors, increasing the value of trusted advisors like independent agents.
What Should Agents Do?
Agents should:
- Stay informed through CMS updates and carrier training
- Identify affected clients and prepare outreach in time for AEP
- Reposition their value as guides through regulatory changes
Windermere Financial will continue to monitor CMS updates and provide timely insights and tools to help our agents adapt. If you have any questions, please reach out to our team for support.
