Medicare Advantage’s VBID Program Is Ending—Here’s What That Could Mean for Out-of-Pocket Costs

Medicare Advantage’s VBID Program Is Ending—Here’s What That Could Mean for Out-of-Pocket Costs

The Medicare Advantage Value-Based Insurance Design (VBID) Model was a CMS Innovation Center demonstration that let participating Medicare Advantage (MA) plans test benefit designs aimed at reducing barriers to care—often by lowering cost sharing for “high-value” services and offering targeted supplemental benefits for people with chronic conditions, low income, or certain social needs.

CMS announced the VBID model will terminate at the end of calendar year (CY) 2025, meaning it won’t continue into 2026. CMS cited “substantial and unmitigable” increased Medicare spending in evaluations (including billions in higher program spending in 2021 and 2022) and said it did not see viable modifications that would bring costs down enough to meet legal requirements for Innovation Center models.

Below is what the program did, why its termination matters, and how it could affect what Americans pay out of pocket—especially people enrolled in the specific MA plans that participated in VBID.

What VBID changed for enrollees (the parts that affected out-of-pocket costs)

VBID was designed around a simple idea: align what patients pay with the clinical value of services. In practice, participating MA plans could test things like:

  • Lower copays/coinsurance for certain “high-value” services (for example, services tied to chronic condition management)

  • Targeted supplemental benefits that can indirectly lower out-of-pocket burdens—such as food/grocery support, transportation to appointments, and additional supports for chronic conditions

  • More tailored approaches for certain groups (including people with low income), depending on the plan’s VBID design

In 2025, CMS said 62 participating plan sponsors projected offering VBID-related benefits to over seven million enrollees.

What “termination” means in real life starting in 2026

Because VBID ends after 2025, benefits that existed specifically because of VBID may shrink, change, or disappear in 2026—but how much depends on your plan and county.

1) Some people may lose targeted cost-sharing reductions

If your MA plan used VBID to reduce copays for certain services (or created special, targeted cost-sharing rules for particular populations), those VBID-specific reductions may not be renewed in 2026. Georgetown’s Medicare policy team flagged that VBID ending could affect beneficiaries’ cost sharing in impacted plans.

2) Supplemental benefits could be reduced or restructured

Some VBID plans offered extra supports—like food assistance and transportation—aimed at improving access and reducing financial strain. CMS specifically highlighted those kinds of benefits as examples of what VBID plans could offer.

Important nuance: Medicare Advantage plans can still offer many supplemental benefits outside VBID, but VBID gave plans extra flexibility to test targeted approaches. So in 2026 you may see:

  • the benefit removed,

  • the same benefit but with tighter eligibility,

  • or the benefit offered, but funded/structured differently (which can change the out-of-pocket experience).

3) People in certain Special Needs Plans (especially D-SNPs) could feel it more

Industry analysis has warned that VBID has been a common way for some Dual Eligible Special Needs Plans (D-SNPs) to offer non-uniform benefit packages—so its end could create meaningful plan redesign in 2026.

4) Hospice “VBID component” already ended earlier (separate but related)

VBID also had a Hospice Benefit Component, which CMS decided to terminate as of December 31, 2024.
That component’s end is distinct from the broader VBID model ending after 2025, but it matters for beneficiaries who were in plans participating in hospice testing.

Why CMS ended VBID (and why that matters for premiums and cost sharing)

CMS’s stated reason matters because it shapes what happens next: the agency said evaluations repeatedly showed significantly increased costs to Medicare, and it didn’t see an acceptable way to modify the model to stop those losses—so the model must end after 2025.

What that means for out-of-pocket costs: VBID was intended to lower what patients pay, but CMS concluded it increased overall Medicare spending—driven in part by factors like risk score growth and Part D expenditures (per CMS’s discussion of evaluation findings).
When models end for cost reasons, plans often respond by rebalancing benefit generosity—sometimes showing up as higher copays, fewer extras, narrower eligibility for certain benefits, or changes in premiums.

What Americans should do now (practical steps to protect yourself from surprises)

If you’re in Medicare Advantage (or helping someone who is), 2026 is a year to compare plans closely, because VBID-related changes may not be obvious from marketing materials alone.

  1. Read your plan’s Annual Notice of Change (ANOC) and Evidence of Coverage (EOC) for 2026
    Look for changes in:

    • specialist copays

    • outpatient services

    • prescription tiers

    • supplemental benefits (food, OTC, transportation)

    • any “special” benefits you previously qualified for

  2. Compare total cost exposure—not just premium
    Medicare Advantage plans have an annual maximum out-of-pocket (MOOP) for Part A/B services, but your real spending depends on copays/coinsurance and how often you use care.

  3. Use Medicare Open Enrollment to switch if needed
    Medicare Open Enrollment runs October 15 to December 7, with changes effective January 1.
    If you’re already in MA, there’s also the Medicare Advantage Open Enrollment Period (January 1 to March 31) for a one-time switch or return to Original Medicare (rules apply).

  4. Get free, unbiased help
    CMS specifically noted it would coordinate with beneficiary groups and State Health Insurance Assistance Programs (SHIPs) to help with the transition.
    SHIPs can help you compare plan documents side-by-side and estimate out-of-pocket costs.

Bottom line

VBID’s goal was to reduce patient cost barriers and support whole-person needs, and for many enrollees it likely did translate into lower out-of-pocket costs for certain services or meaningful nonmedical supports. But CMS determined the model increased Medicare spending substantially and will end it after CY 2025.

For Americans, the practical takeaway is: if you were in a VBID participating Medicare Advantage plan, 2026 benefits may shift, and those shifts could show up as higher cost sharing or fewer targeted extras—so it’s worth doing a careful plan comparison during the next enrollment window. 

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