During this time Medicare open enrollment season, those choosing options for 2025 can often choose from a dizzying number Part D drug plan and private insurance companies Medicare Advantage plans. Medicare star ratings can help you narrow your options—if you understand what they mean.
According to the health policy research group KFF, few people on Medicare bother to look for the stars. “When asked whether these star ratings influenced their decision making when choosing a plan, the majority of participants said no,” a 2023 report said. KFF reports speak.
They are making mistakes.
What Medicare star ratings can tell you
Star ratings you can find on the Medicare website Plan Finder tool that compares Part D and Medicare Advantage plans (the alternative to Original Medicare), giving a concise look at how the plans measure quality and member experience.
“It’s an imperfect system at best, but it’s the best system we have,” said Dr. Sachin Jain, president and CEO of SCAN Health Plan, a large Medicare Advantage plan. Have.
In the annual ratings given by the Centers for Medicare and Medicaid Services (CMS), 5 stars means excellent, 4 means above average, 3 means average, 2 means below average, and 1 means poor . On Medicare’s Plan Finder, 5-star plans become more prominent: One big star has the number 5 in it.
Suzanna-Grace Tritt, a senior consultant at health care consulting firm Wakely, said the data used to create those ratings is a bit dated. The 2025 rankings are based on the performance of 2023 plans.
The goal for Medicare Advantage insurers is to achieve 4 stars or higher
Something else you might not know: Medicare Advantage plans (not Part D plans) get huge bonuses from Medicare if they get at least 4 stars — worth more than 11.8 billion dollars by 2024, according to KFF.
“If they receive higher payments, they may have the ability to provide additional benefits,” said Jeannie Fuglesten Biniek, deputy director of the Medicare Policy Program at KFF. “But there is not necessarily a one-to-one correlation that a 5-star plan will bring more benefits.”
However, very few Part D or Medicare Advantage plans receive 1 or 2 stars. “In reality, it’s more like a 2.5 to 5-star system,” Jain said.
How to spot a low performer
If a plan receives less than three stars for three consecutive years, Medicare can terminate it, Tritt said, so plans are incentivized to maintain their quality. Such low-performing plans show up on Plan Finder as an upside-down red triangle with an exclamation mark inside.
Participants in these low-performing plans can switch to plans rated 3 stars or higher during the Medicare Special Enrollment Period to disenroll from January 1 to December 31.
What makes up a Medicare star rating
Part D and Medicare Advantage star ratings include up to 40 or 30 quality and performance measures, respectively. Broadly speaking, ratings for both plan types are based in part on member experience, customer service and plan performance.
Part D ratings also evaluate the safety and price of prescription drugs, while Medicare Advantage ratings also look at whether members are healthy and whether those with chronic conditions receive the same benefits. Tests and treatments are generally recommended for them.
“If I want to know how good my experience is with this plan, the star can be an indicator of that,” Tritt says. “It’s not a direct indication of how good your wellbeing is either [doctor’s or hospital] network, it will be like that.”
Medicare’s 5-star unicorn
However, if you’re the type of person who just wants to sign up for a 5-star package, you might be out of luck.
Lisa Winters, a consultant with Wakely, said CMS has revised its Medicare star rating methodology in recent years, making it extremely difficult to plan for five stars.
Star ratings are kept artificially high during the pandemic, so plans won’t fail due to quality issues beyond their control.
According to CMS, by 2025, only 2% of people in Medicare Advantage/Part D plans and 5% in stand-alone Part D plans will be in five-star plans. There are far more 5-star plans for 2024 than 2025.
When I tested Plan Finder to see my Part D and Medicare Advantage options in suburban New Jersey, I didn’t find a single 5-star plan.
Tritt’s advice for Open Enrollment participants: “This year, you’ll probably live in an area where you don’t even see a five-star plan.”
Easier to find 4-star plans
It’s much easier to find a plan rated at least four stars. “More than 70% of Medicare Advantage participants are enrolled in them,” Biniek said.
She notes that five-star Medicare Advantage plans don’t receive larger bonuses than four-and-a-half-star plans, so insurers often see little benefit in striving for five stars. However, some insurance companies promote five-star coverage because they use it as a marketing tool, Biniek said.
The mandate for Medicare Advantage plans to achieve at least four stars is why insurers like it Humanity, UnitedHealth GroupSCAN Health and Enhanced health challenged CMS in court to revise their star ratings upward.
Advice on Medicare star ratings
Here are the do’s and don’ts from the experts when evaluating Part D and Medicare Advantage star ratings during Open Enrollment:
- Don’t choose or decline a Part D or Medicare Advantage plan simply because of its star rating. “I think cost and access to medical services or providers are at least as important as the overall rating of the plan when one is making a decision,” Biniek said. But star ratings can be your deciding factor when choosing between two plans with similar out-of-pocket costs and coverage.
- Don’t panic if a plan’s 2025 star rating is slightly lower than its 2024 rating. Downgrades may be due to errors in the way ratings are calculated from one year to the next. “Unfortunately, if you see a spike in your plan’s star rating, that will likely continue,” Tritt says. That’s why it’s best to look at the show’s star rating history over the years.
- If you’re satisfied with the cost and coverage of your Part D or Medicare Advantage plan but are concerned about that plan’s overall star rating, click through the Medicare Plan Finder to see the star ratings in the sub category. You’ll be able to see how the plan scores on specific quality and member satisfaction measures that are important to you.
“It’s normal for plans to not achieve everything,” Tritt said. “They almost always have weaknesses.”
If you’re wondering why Part D plans were dropped because pharmacists scored poorly in helping members manage their medications, Tritt said, it’s because CMS scores plans on compliance take medicine.
Low ratings on that measure indicate that insurers’ preferred pharmacies are not doing a good job of ensuring members follow their doctor’s orders.
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