Medicare Advantage Ratings

The Secrets in the Stars


If you are enrolled in a Medicare Part C (also known as Medicare Advantage) health care plan, you may want to look over its ratings… if it even has any. Each Medicare Advantage plan is supposed to be rated, but some are not, and people often don’t know what the stars are supposed to signify.

The rating system is quite complex. It is based on 33 criteria pertaining to Medicare Advantage plans (52 if the plan includes prescription drug coverage). The Healthcare Effectiveness Data and Information Set, the Consumer Assessment of Healthcare Providers and Systems, the Health Outcomes Survey, and the Centers for Medicare and Medicaid Services collect data on the following categories related to Medicare Advantage Programs in order to calculate the ratings:

• Staying healthy and preventative care

• Management of chronic conditions

• Responsiveness and care

• Health plan members complaints, appeals, and choosing to leave the plan

• Customer service

Many of the smaller providers of Medicare Advantage programs are not currently rated by government officials- a problem that should be remedied within the next few years. Problems come with the ratings of Medicare Advantage plans, as health care plans are often robust to change; therefore, it typically takes two, if not three, years for any insurance provider to be able to increase their ratings.

Currently, less than 25% of all Medicare Advantage enrollees are in plans with ratings of at least 4 stars, on a scale from 1 to 5. In some states, Medicare Advantage enrollee participation in highly rated plans is low because highly rated plans are not easily accessible. For example, in Alaska, Montana, Nebraska, Mississippi, and Vermont, no beneficiaries even have the option of obtaining a plan rated with 4 or more stars. On the other hand, there are some states in which many Medicare Advantage enrollees could have highly-rated plans, but choose not to. In Florida, 82% of Medicare Advantage beneficiaries have access to plans with 4 or more stars, but only 8% are enrolled in such plans. Click here to access the full study done by the Kaiser Family Foundation. Why is this the case? Gretchen Jacobson, a principal policy analyst for Kaiser Family Foundation, explains that "Whether or not your doctor is in [an Advantage plan] network may be more important to someone than a quality rating.” Of course, one still ought to individually choose their plan, as the rating does not give proper indication of any particular aspect of the plan. And one particular aspect may be what the consumer is looking for.

Starting in 2011, some things are going to change for Medicare Advantage providers based on the ratings they receive. In 2011, all plans with 4 or more stars will obtain bonuses of 1.5%. These bonuses will be increased to 3% in 2012 and 5% from 2013 onward.

There are additional incentives coming for Medicare Advantage insurers, including small and low-enrollment plans that can receive quality bonuses and rebates starting 2012. New plans will obtain quality bonuses of 1.5% in 2012, 2.5% in 2013, and 3.5% in 2014.

What does this mean for consumers? Although there are no guarantees, it seems likely that due to the cash incentive, Medicare Advantage providers will seek to improve the quality of their healthcare, and, by extension, their ratings. This is good for beneficiaries.

Check back soon for complete details on 2011 Medicare Enrollment and Disenrollment periods. It’s especially important this year that you choose a suitable Medicare Advantage plan during the Annual Election Period (11/15 – 12/31), since the Open Enrollment period that used to run for the first three months of each calendar year has been eliminated.