The end of absorption

Editor’s note: This is the first of a three-part series that explores how Medicare Advantage plans can turn the post-V28 landscape into an opportunity for growth. From capturing clinically complex members to optimizing engagement and transitioning populations into the right plans, we explore how integrated clinical and marketing strategies can drive both better outcomes and stronger margins.

From revenue recovery to margin discipline in the 100% V28 era

The era of absorbed losses is over. For two years, Medicare Advantage (MA) plans shielded members — and market share — by taking hits to their own margins under The Centers for Medicare & Medicaid Services (CMS) V28 risk adjustment model.¹

As of January 1, 2026, that buffer is gone. The 100% V28 phase-in is live. Plans can no longer offset shortfalls with temporary measures. Margins are exposed, and every decision (marketing, clinical, operational) carries direct financial consequences.

This is a defining moment. Plans that cling to old playbooks will struggle. Those that synchronize clinical insight, member intent, and engagement will capture high-acuity demand, and expand margins, like never before.

What is the V28 risk adjustment model?

In 2023, CMS finalized Version 28 of the CMS-HCC risk adjustment model, which assigns risk adjustment factors to hierarchical condition categories (HCCs) to predict a plan’s cost of managing members based on demographics and health conditions.²

V28 introduced major changes that limit the impact of coding intensity and curb excess payments, eliminating roughly 2,000 ICD-10 codes from HCC mappings. CMS phased in the model over three years (2024–2026), giving plans time to adjust.³ But that transition period is now complete.

The absorption era is over. Plans must now adapt to the full financial reality of V28, which puts high-complexity members — and your approach to acquiring, retaining, and managing them — squarely in focus.

From coding volume to clinical integrity

Under V28, reimbursement driven by coding volume is no longer viable. Plans can’t rely on intensity alone to protect margins. The model now rewards clinical integrity: the ability to accurately document and validate the true severity of each member’s condition.⁴

This marks a meaningful operational shift. Historically, broad coding created a buffer against rising medical costs. In 2026, that buffer is gone. Financial performance is now directly tied to how precisely plans capture and substantiate clinically complex conditions.

The shift from “perks” to “precision”

The 2027 AEP cycle won’t be won with giveaways. Gym memberships and similarly generic supplemental benefits are fading fast. Growth now hinges on precision: matching clinical insight to member needs.

The current surge in Chronic Condition Special Needs Plans (C-SNPs) is not merely a trend. It reflects a strategic shift toward revenue stability. While general MA growth has plateaued, C-SNP enrollment is accelerating — driven in part by an expansion of C-SNP offerings from carriers.⁵

This momentum is a direct response to V28. By moving clinically complex members into dedicated C-SNPs, plans can better align these populations with the reimbursement structures the new model continues to support. To move from revenue recovery to true margin expansion, plans must adopt a clinical-growth coalition built on four pillars:

Acquire

Traditional age-in lists aren’t enough. Plans must leverage first-party clinical search data to reach prospects — and their caregivers — at the exact moment they are researching specific chronic conditions. Targeting based on condition-level intent signals identifies high-acuity members in general plans, unlocking new opportunities.

Retain

The first 90 days post-enrollment are critical. Automated, condition-specific coaching replaces manual outreach, drives health risk assessment (HRA) completion, and builds immediate clinical stickiness, even as perks scale back.

Nurture

Long-term engagement isn’t optional. It’s a financial lever for managing medical loss ratio. Personalized, journey-based health education is especially crucial for proactively managing adherence, closing care gaps, and reducing avoidable ER visits and hospitalizations for members with severe or disabling chronic conditions. This protects both member health and plan margins.

Transition

The most efficient growth comes from within. Using predictive clinical analytics, plans can identify and move into C-SNPs members whose increasing complexity now makes them eligible, aligning care needs with reimbursement and turning internal transitions into a revenue engine.

Final thought (for now)

In the post-absorption world, margin and growth are no longer independent of clinical strategy. Marketing and clinical teams must operate in unison, using intent, engagement, and member complexity to drive both retention and margin expansion. Plans that integrate clinical insight, automated engagement, and precise acquisition strategies will not only survive — but thrive — capturing high-acuity demand and unlocking sustainable growth.

The lesson is simple: the V28 buffer is gone. Plans that act with speed, precision, and clinical insight will define the next era of Medicare Advantage success — and leave competitors behind.

SOURCES

1. CMS’s New Risk-Adjustment Model Had Limited Impact On Medicare Advantage Benefits, 2024–25, Health Affairs, https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2025.01289
2. Implications of Medicare’s V28 Model on MA Plans and Risk-Based Providers, LEK, https://www.lek.com/insights/hea/us/ar/implications-medicares-v28-model-ma-plans-and-risk-based-providers
3. Medicare Policy in 2025: Analysis of P.L. 119-21, IntuitionLabs, https://intuitionlabs.ai/articles/medicare-policy-changes-2025
4. Navigating CMS-HCC Version 28: A strategic guide for Medicare
   Advantage stakeholders, Cognizant, https://www.cognizantrcm.com/wp-content/uploads/2026-CMS-HCC-V28-Coding-Updates_Ebook.pdf
5. Medicare Advantage enrollment depicts industry at a crossroads, HealthScape Advisors, https://www.healthscape.com/insights/medicare-advantage-enrollment-depicts-industry-crossroads#:~:text=Within%20this%20overall%20decrease%2C%20the,the%206%25%20increase%20in%202025.