The Importance of Understanding Medicare Star Ratings - Western Asset Protection
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The Importance of Understanding Medicare Star Ratings

Your clients trust you to help them with their Medicare plan selections. To make sure you’re looking at the complete picture, you need to understand Medicare’s Star Ratings.

A Scale of One to Five

Medicare’s Star Rating system is designed to help beneficiaries compare the quality of the various Medicare Part D and Medicare Advantage plans available to them. Like many other rating systems, it uses a five-star scale. A one-star rating indicates poor plan performance and is the lowest possible score. A five-star rating indicates excellent plan performance and is the highest possible score.

Each plan’s Star Rating is updated yearly, and the criteria used to determine the score may also be updated. CMS looks at a range of separate issues when calculating the score, and the exact list of measures can change from year to year as CMS tries to improve the system. To calculate the 2022 ratings, CMS used 38 measures for Medicare Advantage Prescription Drug plans, 28 measures for Medicare Advantage plans without prescription drug coverage, and 12 measures for Medicare Part D plans.

Star Ratings for 2022

CMS says that more Medicare Advantage Prescription Drug plans earned four or more stars for 2022 compared to 2021. For 2021, only 49% of these plans earned at least four stars. For 2022, 68% of these plans earned at least four stars.

Adjustments made to the 2022 Star Ratings to account for the impact of the pandemic may have had some effect on the ratings. Because all plans qualified for the extreme and uncontrollable circumstances policy, if measure-level Star Rating declined from the prior year, the score for that measure reverted to the score from the prior year.

However, CMS says that the increase in highly rated plans also reflects improvements in scores on multiple measures. For detailed information on the measure-level scores, see the Fact Sheet on 2022 Part C and D Star Ratings.

The Five-Star SEP

Outside of the Annual Election Period, Medicare enrollees can use the Five-Star Special Enrollment Period (SEP) to switch to a five-star plan in their area. The Five-Star SEP can be used to make one coverage switch between December 8 and November 30.

But watch out – enrollees may lose drug coverage or get switched to Original Medicare if the new plan they select doesn’t include both health coverage and prescription drug coverage.

How Important Are Star Ratings?

According to Health Affairs, although the Star Rating system is supposed to help beneficiaries compare quality, there has been little research into the impact on patient outcomes, and it appears that Star Ratings may not predict which plans reduce average beneficiary mortality rates.

However, this doesn’t mean the ratings aren’t important. They may not be perfect, but they provide beneficiaries with a way of comparing quality. Also, modern consumers have gotten used to checking ratings for everything they buy. If they refuse to go to a restaurant or watch a movie with a bad rating, they probably won’t want a health plan with a low rating, either. CMS says that 90% of the people who are currently enrolled in a Medicare Advantage Prescription Drug plan are in a plan that earned four or more stars for 2022.

You can view the 2022 Star Ratings in each carrier’s portal and they are present in each carrier enrollment kit. Make sure you take a look at the new ratings, and help your clients understand what they mean.