March 27, 2025  – The Illinois Department of Healthcare and Family Services (HFS) has awarded Medicaid contracts to four health plans as the state prepares to transition to a new care model for individuals eligible for both Medicare and Medicaid. The announcement marks the next step in Illinois’ shift to a Fully Integrated Dual Eligible Special Needs Plan (FIDE-SNP) model, subject to federal approval.

The new contracts, collectively valued at $12 billion, will run from January 1, 2026, through December 31, 2029. The agreements may be extended for up to five years and six months. The selected plans—Aetna Better Health, Humana Health Plan, Meridian Health Plan, and Molina Healthcare—are among the five existing Medicaid managed care organizations participating in the state’s current Medicare-Medicaid Alignment Initiative (MMAI).

Illinois intends to replace the MMAI demonstration, which is scheduled to end on December 31, 2025, with this more integrated model. FIDE-SNPs are designed to provide coordinated and comprehensive care across both Medicare and Medicaid services. They aim to enhance health equity, address social determinants of health, and improve access to quality behavioral and facility-based care.

HFS released a request for proposals (RFP 2026-24-001) on September 3, 2024, to solicit bids for the new program. In addition to outlining strategies for care integration, applicants were asked to propose approaches to expanding value-based payment models, especially within behavioral health. By the October 18 deadline, six bids had been submitted. Notably, Health Care Service Corporation/Blue Cross Blue Shield of Illinois, an incumbent MMAI plan, did not secure a contract. UnitedHealthcare also submitted a proposal but was not selected.

Currently, the MMAI program serves roughly 80,000 dual-eligible individuals. Beginning in 2027, the awarded D-SNPs will also manage long-term services and supports (MLTSS). The state currently operates a separate MLTSS program for individuals receiving 1915(c) waiver services, with about 60,000 beneficiaries enrolled. Under the FIDE-SNP model, dual-eligible beneficiaries who receive long-term services through the waiver program will be required to enroll in managed care, unless they fall under an excluded group, such as individuals receiving institutional services for developmental disabilities.

If you want to learn more about dual eligibles, check out our newly launched Dual-Eligible Headquarters.  Here you can find resources on dual-eligibles, newsletters, and podcasts from Fady Sahhar and the XtraGlobex team!