THE VBP Blog
The Rise and End of MA-VBID: Lessons from Medicare Advantage’s Value-Based Insurance Experiment for LTSS
A look back at seven value-based payment models—and what they reveal about the path forward for long-term services and supports.
November 5, 2025 – The hope for the Medicare Advantage Value-Based Insurance Design (MA-VBID) model was ambitious: allow MA plans more flexibility to reduce cost sharing and offer supplemental benefits targeted to high-value care and vulnerable populations, with the goal of improving health and controlling costs. Over its run, MA-VBID allowed participating plans to experiment with tailored benefit design, social needs interventions, and enhanced incentives for chronic care. But despite gains in certain quality and access measures, the model failed to reduce costs, leading CMS to announce its termination at the end of 2025.
In this blog, we look at the MA-VBID model, and how it offers a valuable laboratory of benefit innovation for the long-term services and supports (LTSS) space regarding what works, what backfired, and how future models might adapt these strategies to support independence, equity, and whole-person care.
Model Design and Intent: Flexibility, Targeting, and Supplemental Benefits
The goal of the MA-VBID model was to push beyond traditional benefit design by introducing cost sharing and supplemental benefit flexibilities. Under VBID, participating Medicare Advantage Organizations (MAOs) could reduce or eliminate cost sharing for selected high-value services (e.g. chronic disease medications, preventive screenings) and offer supplemental benefits to targeted groups that address health-related social needs (HRSNs).
Key features of the model included:
- Targeting interventions directed to enrollees with certain chronic conditions, dual eligibility, or low-income subsidy (LIS) status, enabling more tailored support.
- Plans could reduce or waive cost sharing for high-value medical services and prescription drugs or provide supplemental benefits to eligible enrollees.
- Design emphasized incentives (lower cost sharing, benefits) rather than punitive cost-sharing increases.
- Included optional screening for HRSNs and encouraged health equity planning.
- MAOs had freedom to design benefit packages but remained accountable to quality standards.
The model was designed to just lower cost sharing. It was really an experiment to test whether aligning plan incentives, targeting high-risk populations, and integrating social supports could improve outcomes and reduce avoidable utilization, especially for those facing chronic disease burdens or social risk factors. Looking at the design of the model, VBID went beyond conventional payment reform and into the domain of benefit engineering.
Results and Evaluation: Strong Uptake, Mixed Outcomes, and Unsustainable Costs
Over the course of the model, the Medicare Advantage Value-Based Insurance Design initiative grew in scale. There were only seven states and a narrow set of chronic conditions involved in the initial model, but it was eventually expanded to all 50 states. By 2024, MA-VBID included over 1,500 Medicare Advantage plan benefit packages, encompassing approximately 8.7 million enrollees. nearly one in five MA beneficiaries.
Qualitative feedback from plans and enrollees was largely positive. Plans appreciated the opportunity to innovate, while beneficiaries reported better access to care, greater satisfaction, and improved chronic care management. Many MAOs used VBID flexibilities to enhance benefits for people with diabetes, congestive heart failure, or other high-need conditions, offering tools like reduced insulin copays, in-home support services, transportation, and care coordination assistance.
The model also supported broader goals around social determinants of health. Participating plans piloted interventions aimed at food insecurity, housing instability, caregiver burnout, and other non-medical barriers to care. Several plans reported strong anecdotal results and increased engagement among vulnerable populations.
However, despite these successes, the financial evaluation told a different story. In December 2024, CMS announced that the MA-VBID model would be terminated after the 2025 plan year, citing “significant excess costs” to the Medicare Trust Fund. According to internal CMS analysis and findings from the Office of the Actuary, the program failed to generate net savings. In fact, MA-VBID increased Medicare spending overall, largely due to how risk adjustment, payment benchmarks, and quality bonus payments interacted under the MA structure.
In short, MA-VBID showed promise in improving beneficiary experience and service delivery, but it failed to demonstrate value in the traditional cost-saving sense. Despite the model’s termination, CMS emphasized that lessons from VBID would inform future policy design, particularly in Medicare Advantage and dual-eligible integration efforts. The agency also left open the possibility of incorporating similar benefit flexibility into other models or programs with stronger financial guardrails.
What Worked with the Medicare Advantage VBID Model—and What Didn’t
While the MA-VBID Model allowed for more personal, flexible benefit design, it also revealed persistent challenges in achieving meaningful cost savings and accountability. Here’s a look at what worked and what didn’t.
What Worked:
- Benefit personalization improved access and engagement. MA-VBID allowed plans to tailor benefits based on chronic conditions, income status, and social needs.
- Plans embraced innovation in addressing social determinants. Many participating MAOs used the model to pilot creative interventions that often improved patient satisfaction and care coordination.
- Flexibility aligned with person-centered care. By moving away from one-size-fits-all benefit structures, VBID enabled plans to offer services aligned with the day-to-day realities of managing chronic illness.
What Didn’t:
- Costs outweighed savings. Despite positive experiences, VBID increased Medicare spending overall.
- Broad targeting diluted impact. Some plans offered enhanced benefits too broadly, which reduced the ability to achieve measurable improvements.
- Lack of financial accountability. The model emphasized flexibility but did not tie that to performance benchmarks or outcome metrics, which limited the ability to evaluate true value.
- Structural issues in Medicare Advantage played a role. The existing MA payment system made it difficult to isolate the effect of VBID and assess its standalone value.
In the end, VBID succeeded in encouraging creative benefit design and patient-centered care strategies. However, without stronger financial alignment and targeted accountability, it struggled to meet the core goals of value-based payment, which are improving outcomes while reducing overall costs.
Applying the Model to LTSS: Customization With Guardrails
While MA-VBID was not originally designed for long-term services and supports, it provides some lessons for improving care delivery and outcomes for dual eligibles, who often face the most complex health and social challenges. These individuals frequently live with multiple chronic conditions like diabetes, COPD, congestive heart failure (CHF), and cognitive impairments. These conditions require not only medical intervention, but also ongoing functional support and non-clinical services.
VBID’s framework for customizing benefits based on health status and social risk can be translated into targeted care models within Dual Eligible Special Needs Plans (D-SNPs), where both Medicare and Medicaid funding streams are already present. For example, a D-SNP serving a beneficiary with CHF and mobility issues could integrate in-home support services, caregiver respite, and home-delivered meals as covered benefits. And not as add-ons, but as core components of person-centered care.
This approach aligns well with LTSS reform goals, allowing managed care organizations to address social determinants of health (SDOH) like transportation barriers, food insecurity, or unsafe housing, alongside medical management. Embedding these supports in care coordination frameworks could reduce hospitalizations, delay institutionalization, and improve overall stability and independence for high-need populations.
The MA-VBID model ultimately underscores the importance of flexibility with accountability. In adapting its principles to LTSS, especially within integrated models like D-SNPs, it’s essential to tie benefit customization to measurable improvements in quality of life, caregiver support, and total cost of care.
Advocate’s Perspective
The MA-VBID Model reveals both the potential and the limitations of flexibility in value-based care. Its most important contribution was proving that benefit customization, especially for populations with chronic conditions, can improve access and satisfaction. However, without clear accountability for outcomes, the model struggled to demonstrate lasting value. For dual eligibles, who often live with co-occurring conditions and who rely heavily on LTSS and non-clinical supports, that accountability is critical. As we look toward reforming LTSS delivery through D-SNPs or other integrated models, the lesson from MA-VBID is clear: flexibility must be grounded in equity, transparency, and performance-based oversight. If we can align those principles, we have a real opportunity to design systems that are not only more person-centered, but also more effective for those who face the greatest health and social vulnerabilities.
Onward!
Free E-Book
Paying for Outcomes: The Value-Based Revolution Written by Fady Sahhar
A practical guide for payers, providers, and policymakers shaping the next generation of healthcare delivery.
Now Available for Free
DOWNLOAD NOW
The CarePayments Podcast
Episode #114
Innovation, Strategy, and Advocacy Combining To Increase Community Based Services with Dyann Roth, CEO of Inglis
WATCH NOW
Share This Blog!
Get even more insights on Linkedin & Twitter
About the Author
Fady Sahhar brings over 30 years of senior management experience working with major multinational companies including Sara Lee, Mobil Oil, Tenneco Packaging, Pactiv, Progressive Insurance, Transitions Optical, PPG Industries and Essilor (France).
His corporate responsibilities included new product development, strategic planning, marketing management, and global sales. He has developed a number of global communications networks, launched products in over 45 countries, and managed a number of branded patented products.
About the Co-Author
Mandy Sahhar provides experience in digital marketing, event management, and business development. Her background has allowed her to get in on the ground floor of marketing efforts including website design, content marketing, and trade show planning. Through her modern approach, she focuses on bringing businesses into the new digital age of marketing through unique approaches and focused content creation. With a passion for communications, she can bring a fresh perspective to an ever-changing industry. Mandy has an MBA with a marketing concentration from Canisius College.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.