Medicare Star Ratings Explained
The star rating system was created by The Centers for Medicare and Medicaid Services (CMS) to help individuals who qualify for Medicare and caregivers easily compare between plans. The star ratings are given to Medicare Advantage plans and Part D prescription drug plans. The rating of a plan gives you insight into it’s overall quality and performance. When shopping for plans, either in the Annual Enrollment Period or when signing up for Medicare for the first time, the star rating can be especially helpful in picking the correct plan for you.
How are Medicare plans rated?
CMS rates Medicare Advantage and Part D plans annually. They are rated using a scale of one to five based off of it’s quality. The more stars, the higher the quality of a plan. A five-star rating is the highest a Medicare Advantage or Part D plan can receive. CMS can also give a plan a half-rating, such as 3.5 or 4.5.
The ratings range from:
- 5-star rating: excellent performance
- 4-star rating: above-average performance
- 3-star rating: average performance
- 2-star rating: below-average performance
- 1-star rating: poor performance
CMS releases star ratings every year before the Medicare Annual Enrollment Period. They give star ratings to three types of Medicare plans:
- Medicare Advantage plans with prescription drug coverage (MA-PD)
- Medicare Advantage plans without prescription drug coverage (MA only)
- Standalone Part D prescription drug plans (PDP)
Why is the Medicare star rating important?
A Medicare plan’s star rating is important because it is a window into the actual quality of a plan. A 4 or 5 star plan will offer better coverage than a plan rated 3 stars or lower. Comparing star ratings will ultimately help you get a better plan.
However, you should not use the star rating system as the only factor when comparing Medicare plans. Depending on your health needs, a lower rated plan could be a better fit for you. Read the details of each plan before you make a decision. A 3 star MAPD plan that covers your prescriptions could be a better fit for you than a 4 star MA plan without Part D coverage, for example.
What determines a Medicare plan’s star rating?
There are many measurements that CMS uses to determine a a plan’s rating. Depending on the type of plan, there are anywhere from 12 to 38 quality measurements. Some measurements relate to the plan, and some to specific services or items. CMS measurements for a plan can include:
- Customer service
- Care coordination
- Complaints about the plan
- Getting needed care
- Rating of health care quality
- Members choosing to leave the plan
- Getting appointments and care quickly
The measurements of services or items include:
- Breast cancer screening
- Diabetes care
- Rheumatoid arthritis management
- Annual flu vaccine
- Monitoring physical activity
- Colorectal cancer screening
- Getting needed prescription drugs
- Medication adherence for cholesterol or diabetes medication
How do I find my Medicare plan’s rating?
The Medicare.gov plan finder tool compares star ratings, plan benefits and costs. You can use this tool to compare all things related to your plans.
You can also ask your Medicare plan provider directly what your plans star rating is. Many plans, especially 5 star plans, will indicate their rating.
What should I know about Medicare Star Ratings?
The Star Ratings can help you decide
When comparing plans, you should compare between plans that offer the coverage you need. Once you’ve narrowed down which plans cover your health needs, the star rating can help you decide between them.
A well rated plan often indicates a good, quality program and provider.
High-performing plans get a bonus
CMS rewards high quality plans. They offer annual bonus payments to plans with four or more stars. The higher the rating, the higher the bonus. This bonus incentivizes companies to offer good plans with the interest of the beneficiary.
Providers must spend this money on extra benefits for the plan beneficiary. These extra benefits include dental, vision, hearing or other benefits.
Fall is ratings season
CMS rates plans every fall, usually in October before the annual enrollment period. You can check at time to see how your plan is performing comparative to others. This can help you decide if you’d like to keep or change your coverage in open enrollment. Visit the CMS’s Star Ratings page to learn more. Read more about understanding enrollment periods to determine how and when you can change your coverage.
Can you get a $0 Medicare Advantage plan with 5 stars?
In almost all counties where 5-star plans are available, there are 5 star plans with $0 premiums available. The plan’s level of medical benefits largely determines its cost. For example, a 5-star plan that offers a $0 premium may be high quality, but you might pay more out-of-pocket.
What is the 5-star Special Enrollment Period?
There is a special enrollment period (SEP) if a 5 star plan becomes available in your area. You can use this SEP to switch from your current Medicare plan to one of an excellent quality rating. This enrollment period starts on Dec. 8, after AEP, and goes until Nov. 30 of the following year. You may use this Special Enrollment Period only once.
Other periods in which you can enroll in a Star-Rated Medicare Advantage or Part D plan include:
- Initial Enrollment Period: This is the period during which you can first enroll in Medicare, when you first qualify for it.
- Open/Annual Enrollment Period: This takes place Oct. 15–Dec. 7 annually, for those already enrolled in Medicare and want to switch plans.
- Special Enrollment Period: These are opportunities older adults have outside of the Initial and Open Enrollment Periods to change Medicare Advantage plans, if they meet certain conditions.
