Medicare Advantage Star Ratings: What They Mean and Why They Matter

Every year, CMS (the Centers for Medicare & Medicaid Services) rates every Medicare Advantage and Part D plan on a scale of 1 to 5 stars. These ratings are a valuable tool for comparing plan quality -- and they have real financial consequences for both plans and enrollees. Here is what you need to know.

Star ratings assess plan performance across five broad categories:

1. Staying healthy: Screenings, tests, and vaccines How well the plan ensures members receive recommended preventive care -- flu shots, cancer screenings, diabetes screenings, and other preventive services.

2. Managing chronic conditions How well the plan manages members with chronic conditions -- diabetes control, blood pressure management, cholesterol management, medication adherence.

3. Member experience How satisfied members are with the plan -- customer service, ease of getting care, care coordination, and overall plan rating.

4. Member complaints and changes in performance How many members filed complaints, how many members chose to leave the plan, and whether the plan's performance is improving or declining.

5. Health plan administration How well the plan handles appeals and grievances, how accurate its pricing information is, and how well it complies with CMS requirements.

CMS collects data from multiple sources:

• HEDIS (Healthcare Effectiveness Data and Information Set) -- clinical quality measures
• CAHPS (Consumer Assessment of Healthcare Providers and Systems) -- member satisfaction surveys
• HOS (Health Outcomes Survey) -- member health status
• CMS administrative data -- complaints, appeals, enrollment changes

Each measure is scored and weighted; the weighted average produces the overall star rating.

For enrollees:

5-Star Special Enrollment Period: If a 5-star plan is available in your area, you can switch to it at any time during the year -- not just during AEP. This is a valuable option if you are unhappy with your current plan.

Quality indicator: Higher-rated plans generally provide better care coordination, fewer coverage denials, and better member service.

For plans:

Bonus payments: Plans rated 4 stars or higher receive bonus payments from CMS -- which they can use to offer richer benefits or lower premiums.

Low-rating consequences: Plans rated below 3 stars for 3 consecutive years can be terminated from Medicare. CMS must notify enrollees in low-rated plans.

Medicare Plan Finder: Star ratings are displayed prominently at medicare.gov/plan-compare when comparing plans.

Medicare & You handbook: Published annually, includes star ratings for all plans.

Plan's marketing materials: Plans are required to display their star rating in marketing materials.

Star ratings are one important factor -- but not the only one. A 4-star plan with your doctors in-network and your drugs on formulary may be a better choice than a 5-star plan that does not cover your providers or medications.

Use star ratings alongside:

• Premium and out-of-pocket costs
• Provider network (your doctors and hospitals)
• Drug formulary (your medications)
• Extra benefits (dental, vision, hearing, OTC)

We do not offer every plan available in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.