Understanding the Medicare Star Rating

The Medicare star rating is designed as a way to help consumers select a Medicare Advantage plan as well as evaluate how well plans that contract with Medicare perform.

Medicare assigns a star rating from 1 to 5, with 5 being the best, for both Medicare Advantage and Medicare Part D (prescription drug coverage) plans.

Medicare considers five categories when assigning a star rating to a Medicare Advantage plan:

• how the plan emphasizes staying healthy, including benefits like screenings, tests, and vaccines
• how the plan manages chronic conditions
• how responsive the plan is, as well as the quality of care people with the plan receive
• member complaint reports, which include problems in getting services, decision appeals, and how many members leave the plan each year
• plan operations, like how the plan prices their drug formularies, how they make decisions about appeals, and the results from audits about the plan’s quality

For Medicare Advantage with drug coverage, Medicare takes into account 45 different performance measures under these five categories. For Medicare Advantage plans that don’t have prescription drug coverage, they consider 33 different measures.

To rate Medicare Part D plans, Medicare takes into account the following four categories:

• customer service for the plan
• how many members chose to leave the plan and member complaints and problems getting services
• member reports about experiences with the drug plan
• drug pricing and patient safety considerations

The results are a star rating that ranges from 1 to 5, with 5 being the best rating. A 5-star plan has a special symbol, which is a yellow triangle with a white star that has the number 5 inside of it.

Medicare determines these ratings from multiple data sources. These include:

• complaint tracking
• grievances and appeals tracking
• health outcome surveys
• laboratory data
• pharmacy data on how well participants adhere to their medications

Sometimes, a plan may be too new in the Medicare Advantage or Part D marketplace to have a star rating. Medicare will let you know when this is the case.

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One of the easiest ways to find out about Medicare’s plan ratings is to visit Medicare.gov and use the plan finder tool. You can use this tool to search by your ZIP code and see available plans and their star rating.

To better interpret the star ratings, Medicare considers the number of stars to mean the following:

• 5 stars: excellent
• 4 stars: above average
• 3 stars: average
• 2 stars: below average
• 1 star: poor

Knowing that a plan has a high star rating can provide you with some peace of mind. You know that other plan participants have rated the plan highly and the plan’s participants have good health outcomes.

However, a star rating isn’t the only factor to take into account regarding your plan of choice. You should also consider the following:

• Cost. Being a 5-star plan doesn’t necessarily mean the plan is expensive. However, a plan must be affordable to you as well as have terms that can help you stay within your annual healthcare budget.
• Coverage. You should also evaluate a health plan based on the coverage it offers. This includes considerations for in-network providers, covered prescription drugs, and additional services you may wish to receive under Medicare Advantage. These may include dental, vision, and hearing coverage.

If the plan finder tool isn’t for you, you can also call Medicare directly at 800-MEDICARE (800-633-4227). A person can review plans with you, including 5-star plans, if you want to learn more about these options.

Medicare times the release of its star ratings in time to help you make decisions about your plan for the upcoming year.

Medicare will typically release its ratings in October each year. For example, in October 2020, Medicare will release star plan ratings for the year 2021.

For 2020, 52 percent of Medicare Advantage plans with prescription drug coverage earned 4 stars or better for the year. An estimated 81 percent of Medicare Advantage enrollees with prescription drug plans were enrolled in a plan rated at 4 stars or better.

Medicare offers a special enrollment period where a person can sign up for a 5-star plan, providing one is available in their area. This time period is from December 8 through November 30 of the following year. A person can switch to only a 5-star plan once during this time period.

The 5-star enrollment period is outside of the traditional time period when you can enroll in a new Medicare Advantage or prescription drug plan, which is from October 15 through December 7.

It’s important to be aware that Medicare will flag low-performing plans. These are plans that received 3-star ratings for 3 consecutive years.

When shopping for a plan, you may see that low-performing plans are flagged with the symbol of an upside-down triangle that has an exclamation point.

If you are currently enrolled in a low-performing plan, Medicare will notify you. You also can’t enroll in a low-performing plan on Medicare’s online Plan Finder tool. Instead, you must call Medicare or the plan directly.

Medicare star ratings can help you get a sense of how well a plan performs for its members. While it isn’t the only factor you should take into account when choosing a plan, it can be a helpful.

Medicare typically releases these ratings in October for the upcoming year, so stay tuned to the Medicare website (or give the Medicare line a call) to find out about your desired plan’s performance.