Since 2007, CMS has evaluated Medicare Advantage and Medicare Part D plans using the five-star rating system. Released every October prior to fall AEP, these ratings help consumers compare plans and evaluate how well plans performed across a number of measures. You play an important role in helping your clients understand the ratings and the significance ratings play when choosing a Medicare plan.
It’s Not Easy to Earn Five Stars
It’s not easy for plans to earn high ratings year after year – and it is becoming harder. CMS reports approximately 51% of MA plans with prescription drug coverage earned four stars or higher in 2023. The number of five-star plans decreased from 74 to 57. This drop was anticipated due, in part, to the end of COVID-19 disaster provisions put in place during the pandemic to protect plans.
A five-star plan has an “Excellent” rating from CMS, which is good indicator of a plan with experience and stability. It shows the plan provides good customer service, is well managed, and provides effective health care for a range of needs. You can feel confident these plans will provide your clients with a high level of satisfaction.
The five-star-rating system encourages plans to maintain or improve their quality standards. The Affordable Care Act created financial bonuses for MA and Part D plans that receive at least four stars. These bonuses provide a 5% to 10% increase in funding that higher-performing plans can use to improve services and offer additional benefits such as vision, dental, hearing, and health and wellness programs. Higher-rated plans generally offer more of these benefits than lower-rated plans.
Medicare will flag low-performing plans that receive three stars or less for three consecutive years. They can block new enrollees from joining these plans until the plans improve. Current enrollees will be notified of their plan’s poor performance. A lack of a star rating means the plan is new and does not have sufficient data for a reliable score.
The Star-Rating Criteria
Medicare Advantage plans with prescription drug coverage receive ratings based on the following quality measures:
- Staying Healthy – access to preventive services, such as physical exams, screenings, tests, and vaccines.
- Managing Chronic Conditions – how the plan manages members with chronic conditions to ensure they receive recommended tests and treatment.
- Member Experience – based on how members rate their experience with the plan, receiving care from their doctors, and acquiring medications.
- Member Complaints – measures how often members had problems receiving services, the number of appeals, and how many members choose to leave the plan each year.
- Customer Service – measures timeliness of processing appeals and processing new member enrollments.
- Drug safety and accuracy of drug pricing.
A five-star plan must perform well across all these measures.
Medicare offers a special enrollment period for enrollees to sign up for a five-star plan, provided one is available in their area. Enrollees can switch to a five-star plan once within the SEP from December 8 through November 30.
Individuals who change from an MA plan that includes prescription drug coverage to a standalone Part D plan are disenrolled from their MA plan and returned to original Medicare. They can only switch to a five-star Part D plan if one is available in their area. If they move from an MA plan with drug coverage to a five-star plan with no drug coverage, they will have to wait until the next enrollment period to receive drug coverage and may have to pay a late penalty.
Star ratings are important, but they should not be the only criteria for choosing a plan. Help your clients weigh the importance of star ratings while also taking into consideration:
- Cost – is the plan affordable based on premiums and out-of-pockets costs?
- Network – are your clients’ preferred doctors and hospitals in the plan’s network? Do your clients want the option for out-of-network coverage?
- Prescriptions – does the plan’s drug formulary cover your clients’ medications? Are your clients’ preferred pharmacies in the plan’s network? Does the plan offer or require mail order?
Since plans receive updated star ratings every year, you may need to help your clients re-evaluate their choice if their plans’ ratings have declined.
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