By Jonathan Cassady, Healthcare Sales Executive (Feb. 12, 2026)‍

The next era of Medicare Supplement profitability will not be driven by pricing sophistication alone. It will be driven by strategic alignment with federally funded care transformation models.

For decades, the Medicare Supplement (Medigap) playbook was simple: price competitively, market efficiently, and pay the claims as they come in. But the recent news out of D.C. has altered the healthcare landscape, and Medigap plans are not immune to the aftershocks.

With the proposed 0.09% rate update for Medicare Advantage (MA) in 2027, we are witnessing a bit of an industry correction. As MA plans reduce ancillary benefits and exit unprofitable counties to survive, two things will happen:

• Disrupted Market: Beneficiaries will shop around, and many will consider returning to traditional Medicare.
• Rising Trends: The same medical inflation pressuring MA plans is hitting the 20% co-insurance you cover.

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In a standardized market where you cannot change benefits, your only lever to control premiums—and thus prevent member churn—is to reduce the volume of claims coming through the door.

CMS is handing you a set of tools to help you.

The "Why" Behind the New CMMI Models

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The Center for Medicare and Medicaid Innovation (CMMI) is launching a slate of aggressive payment models in 2026 and 2027 (LEAD, ACCESS, MAHA, GUIDE, etc.). Why? Because the government knows that managing chronic disease and lifestyle factors is the only way to preserve the Trust Fund.

For a Medigap plan, these models are a gift. They are federally funded initiatives that pay for the high-touch care coordination, technology, and lifestyle interventions that prevent the hospitalizations you ultimately pay for.

To protect your loss ratios, your strategy must pivot from "passive payer" to "active connector." You need to guide your policyholders toward providers participating in these models.

The Structural Reality of Medigap

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Unlike Medicare Advantage, Medicare Supplement plans do not own care management, provider networks, or utilization controls.

You are a claims payer by design. That means:

• You cannot deploy in-house care teams.
• You cannot steer through narrow networks.
• You cannot require engagement.

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But that also means something powerful:

• CMMI models give you access to care management infrastructure without building it yourself.
• They externalize the cost of intervention while internalizing the benefit of reduced claims.
• For Medigap, this is not an optional strategy — it is structural leverage.

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The Strategic Horizon: 2026 & 2027 Models

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These models represent the future of risk reduction. Start identifying opportunities within your membership and organize campaigns to educate and steer your members toward them.

1. The LEAD ACO Model (Launching Jan 1, 2027)

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The Gist: The Long-term Enhanced ACO Design (LEAD) model is replacing the ACO Reach Model. It is CMS's answer to specialist fragmentation. It introduces "CMS Administered Risk Arrangements" (CARA), which finally incentivizes specialists and primary care doctors to share risk and coordinate care.

The Medigap Win: This model allows you to evolve your strategy from "finding a doctor" to "Concierge Finding Services." By navigating  a member to a LEAD-participating Primary Care Provider, you effectively unlock a pre-curated network of specialists who are financially aligned to prevent complications and hospitalizations.

Your Move: Position your plan (or your brokers) as "Care Traffic Controllers." Identify members in fragmented care systems and help them find, and align with a LEAD ACO. Fewer readmissions mean fewer Part A Deductible claims for you.

2. The ACCESS Model (Launching July 5, 2026)

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The Gist: A 10-year model testing "outcome-aligned" payments for chronic conditions.

The Medigap Win: It specifically targets the "frequent flyer" exacerbations—COPD, hypertension, heart failure—that drive your Part A deductible and Part B coinsurance payouts. CMS pays for the technology (remote monitoring, telehealth) to keep these members stable at home.

Your Move: Run an analysis to identify members with these chronic conditions and launch an educational campaign connecting them to ACCESS-participating providers.

3. The MAHA ELEVATE Model (Launching Sept 1, 2026)

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The Gist: Part of the "Make America Healthy Again" initiative, this funds lifestyle medicine (nutrition, stress management) to reverse chronic disease.

The Medigap Win: This model pays for services Traditional Medicare never covered before. If your diabetic member reverses their condition through this program, your long-term claims liability plummets.

Your Move: Market this as a wellness benefit. "Did you know Medicare now covers disease remission programs? These are specialized protocols to help you turn back the clock on conditions like diabetes and heart disease. Let us help you find a provider to help you reduce your reliance on medications.”

4. Acute Hospital Care at Home (AHCAH)

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The Gist: Just this month (February 3rd), Congress extended the Acute Hospital Care at Home (AHCAH) waiver for five full years through 2030. This isn't a pilot anymore; it is a stable, federally backed standard of care.

The Medigap Win: It significantly lowers readmission rates by avoiding hospital-acquired infections and "deconditioning" (muscle loss). The most dangerous moment for a Medicare beneficiary is the 30 days post-discharge; AHCAH smooths that transition.

Your Move: Aggressively educate your policyholders. "If you go to the ER, ask if they participate in the Hospital at Home program. Your policy covers it 100%, and the outcomes are superior.”

The Model Already Creating Value: GUIDE

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While these models are on the horizon, one model is live today and targets your single most expensive unmanaged risk: Dementia.

The GUIDE Model (Guiding an Improved Dementia Experience) provides an alternative payment methodology for participants to deliver comprehensive dementia care with the aim of improving the quality of life for people with dementia, and their caregivers.

The Data is Alarming:

• People living with dementia incur > 27% of all Medicare hospitalizations,
• These are rarely for dementia itself—they are for pre-existing conditions such as CHF and COPD, falls, UTIs, and dehydration because these members can’t self-manage.
• For a Medigap plan, this population is a silent margin killer. This shows up as repeated Part A Deductible payments and high coinsurance exposure due to unmanaged comorbidities that also result in extended lengths of stay in other care settings, driving up your daily liability.

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GUIDE changes the math. CMS pays approved GUIDE participants to provide:

• 24/7 Access to care teams
• Caregiver education and support
• Respite Services: Up to $2,500 annually to give eligible caregivers a break

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A No-Brainer for Medigap Plans:

When your policyholder enrolls in GUIDE, CMS pays for the care coordination and caregiver support and respite. You pay nothing, nor does your member. Yet, you reap the benefit of significantly reduced hospitalizations.

Ceresti Health: Your GUIDE Partner

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Few Medigap plans have the internal infrastructure to manage dementia at scale. Partnering with experienced GUIDE participants is the fastest path to impact.

For more than a decade, Ceresti has been the quiet engine behind successful dementia management for Medicare Advantage plans. Now, as a National GUIDE Participant, they are serving the Medigap market.

Why Ceresti?

• They Focus on the Family Caregiver: Unlike traditional models that struggle to engage a cognitively impaired patient, Ceresti empowers the spouse or family member with a tablet, a dedicated coach, and a curriculum proven to reduce stress and improve outcomes.
• They Drive Results: Ceresti’s model has demonstrated, in multiple clinical studies, a >60% reduction in hospitalizations and a >40% decrease in medical costs.
• They Are Ready: They are already operational as a national GUIDE participant, contracting with some of the nation’s largest Med Supp carriers.

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Take Action

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If you want to keep your premiums competitive and your members loyal, you must help them access the care that keeps them out of the hospital.

Your Playbook for 2026:

1. Identify: Analyze your claims to identify members with a dementia diagnosis, indicators of cognitive impairment, or persistently high utilization patterns.
2. Partner: Collaborate with proven partners to enroll these members into the GUIDE program (or other innovation models) capable of scaling across your membership.
3. Win: You lower your claims expense, the member’s caregivers get free respite care and coaching, and you stabilize your premiums and membership for the long haul.

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It’s important to move with urgency as it pertains to dementia as a cost driver. You do not need to build a new internal program to solve this. The infrastructure—clinical workflows, caregiver engagement, and operational experience—already exists.

Spend time further understanding the impact these CMMI models can have for your business. Identifying the companies that have proven results and the infrastructure to scale a successful program across your entire membership.

By leveraging a proven model today, or one of these new models on the horizon, you close the gap between risk and reimbursement immediately. Every month of delay is a missed opportunity to stabilize your loss ratios while doing the right thing for you members.

Act decisively to deliver better outcomes for families while securing the financial sustainability of your plan for 2027 and beyond.

Don’t wait for the claims to come in. GUIDE your members to better care.

Learn more about Ceresti’s role in the GUIDE Model at Ceresti.com or connect with their team on LinkedIn. Links to all models via CMS:

LEAD | ACCESS | MAHA ELEVATE | AHCAH | GUIDE | ‍