Ahead of AEP, CMS released its annual Medicare Advantage and Medicare Part D star ratings data. For Medicare beneficiaries selecting a plan for the coming year, and for the agents advising them, these star ratings provide an important measure of quality.
How the Star Ratings Are Determined
CMS uses 43 different quality and performance measures to determine a Medicare Advantage Prescription Drug (MA-PD) plan’s star rating. MA-only plans use 32 measures, and standalone prescription drug plans use 13 measures.
These measures assess various indicators of care delivery and customer satisfaction, such as:
- Customer service
- Rating of health care quality
- Complaints about the health plan
- Members choosing to leave the plan
- Timely decisions about appeals
- Getting needed care
- Screenings
- Diabetes care
- Care coordination
These measures are calculated annually and released every fall before AEP to help Medicare beneficiaries compare and evaluate plans based on performance. See the 2027 star rating measures for a complete list of the measures used and how they are weighted.
What Has Changed to Impact the Ratings?
For the 2027 star ratings, CMS made a few changes to its methodology. These changes include using data collected through the Part C Reporting Requirements, adjusting the weights of certain measures, retiring certain measures, and adding or modifying others. New measures include the following:
- Concurrent Use of Opioids and Benzodiazepines and Polypharmacy and Use of Multiple Anticholinergic Medications in Older Adults.
- The Care for Older Adults – Functional Status Assessment measure was returned after substantive specification changes.
- The new Colorectal Cancer Screening measure replaced the legacy Colorectal Cancer Screening measure.
What’s a Good Medicare Advantage Star Rating?
Medicare star ratings are on a scale of 1 to 5, with 1 being the lowest and 5 the highest. When evaluating plans, keep this scale in mind.
- 5 – excellent
- 4 – above average
- 3 – average
- 2 – below average
- 1 – poor
2027 MA-PD Star Ratings
For plan year 2027, 508 MA-PD contracts received ratings.
- 15 plans earned 5 stars.
- 65 plans earned 4.5 stars.
- 108 plans earned 4 stars.
- 164 plans earned 3.5 stars.
- 124 plans earned 3 stars.
- 31 plans earned 2.5 stars.
- 1 plan earned 2 stars.
How Star Ratings Impact Plans
Star ratings are intended to incentivize plans to improve their performance, and CMS rewards high-performing plans with bonus payments. Star ratings not only impact a plan’s reputation in the marketplace, but they also have significant financial repercussions. 2025 star ratings will impact the 2026 quality bonus payments that plans receive from CMS. Plans with 3.5 stars or higher are eligible for bonuses, with 4.5- and 5-star plans receiving the highest level of bonus payments. The difference between three and four stars can mean millions of dollars. These dollars directly translate to what type of enhancements and supplemental benefits a plan can afford to offer.
Plans with a 5-star rating also have a marketing advantage. They can promote enrollment year-round because a 5-star special enrollment period lets Medicare Advantage enrollees switch to a 5-star plan anytime between December 8 and November 30 of the following year. This helps them increase enrollment and stay ahead of competitors.
How Star Ratings Impact Your Clients
A 5-star rating indicates a plan that performs well and is financially stable. These plans may offer more supplemental benefits that appeal to your clients, such as vision, dental, hearing, and health and wellness programs. But these aren’t the only factors to consider when choosing a plan. They should also carefully consider:
- Provider Network: Are their preferred doctors and hospitals in the plan’s network? Do they need or want out-of-network benefits?
- Drug Formulary: Does the plan cover their prescription medications? Are there any special requirements that could be of concern, such as quantity limits, step edits, prior authorizations, and mail order? Is their preferred pharmacy in network?
- Cost: Can they afford the plan’s out-of-pocket costs?
Your clients rely on you to help them find the coverage that best fits their financial and healthcare needs. You can help them understand star ratings and weigh their importance when choosing a plan.
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