Diving overview:
About 40% of Medicare Advantage plans that cover prescription drugs will earn four stars or higher in 2025, but that number will decline starting this year, according to data released Thursday by CMS. The five-star rating system is intended to help Medicare beneficiaries compare the quality of MAs and prescription plans during open enrollment starting next week. But star ratings are also key to an insurance company's finances, determining whether a plan receives a bonus or bids against a higher benchmark interest rate. The latest release shows that star ratings have declined again this year. This year, 42% of MA plans with prescription drug coverage earned 4 stars or higher, down from 51% in 2023 and 68% in 2022.
Dive Insight:
According to CMS, weighted by enrollment rates, about 62% of current beneficiaries will be enrolled in an MA plan with 4-star or higher prescription drug coverage next year, compared to about 74% in 2024. It has become.
In 2025, only seven pharmaceutical MA plans received a 5-star rating. In 2024, there were 38 cases. Elevance Health operates two of the 5-star plans.
Eight contracts will be identified as consistently underperforming plans, up from six this year. Five of the worst-performing companies are run by Centene and one by CVS Health.
The latest star ratings come after months of complaints from insurers about quality ratings for the 2024 plan year.
Scan Health Plan and Elevance both sued CMS, claiming the regulator improperly determined star ratings. The case centered around the new Tukey method, which identifies and removes outliers before cut points are determined.
Federal judges have sided with the insurance companies, at least in part, in these cases. And this summer, CMS recalculated MA plan star ratings for 2024, a huge win for payers.
According to Healthcare Dive's analysis, more than 60 plans from 40 insurance companies received higher star ratings after recalculation.
Still, insurers remain concerned about quality ratings. Earlier this month, UnitedHealth's subsidiary group was cited by regulators based on an “arbitrary and capricious” assessment of how its call center handled a single call after CMS released preliminary star data. filed a lawsuit alleging that the star was demoted.
Humana is also disputing some of its most recent Star Rating results, the insurer announced earlier this month. The payer expected its quality ratings to plummet in 2025, threatening its revenue in 2026, according to securities filings.
