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The Medicare Star Rating System: What You Need To Know

May 30, 2023

A man on a ladder adds a star to make 5 stars in the sky.

The Medicare star rating system is designed to help Medicare beneficiaries make informed choices about their Medicare coverage. The system rates the performance of Medicare Advantage and Prescription Drug Plans based on a set of quality measures, including customer service, patient outcomes, and preventive care.

By understanding the Medicare star rating system, what star ratings measure, and how they're calculated, Medicare consumers can choose a Medicare plan that offers the highest level of care and service.

In this article, we'll break down the star rating system and explain what you need to know to make informed decisions about your Medicare coverage. Whether you're new to Medicare or a seasoned beneficiary, read on to learn more about the star rating system.

What Is the Medicare Star Rating System?

Medicare reviews and scores Medicare Advantage and Part D Prescription Drug plans based on several categories, including member satisfaction, clinical outcomes, and quality of care.

Medicare Advantage Plans and Part D plans are rated in each individual category. Ratings range from one to five stars, with five being the highest and one being the lowest.

Medicare also assigns one overall star rating to summarize each plan’s performance in total. You can use the overall star rating to compare performance among different plans.

Tip: Medicare reviews plan performance yearly and releases new star ratings each fall. This means plan ratings may change from year to year.

How Medicare Star Ratings are Calculated

Understanding how star ratings are calculated can help you make more informed decisions when selecting a Medicare plan and ensure you receive high-quality care. To calculate Medicare star ratings, the Centers for Medicare & Medicaid Services (CMS) looks at data from a variety of sources, including member surveys, claims data, and clinical records. The ratings are then adjusted based on factors such as the size and demographics of the plan's membership.

What Medicare Star Ratings Measure

Medicare Star Ratings are based on a range of factors and measures. This gives Medicare consumers more information to consider when choosing a private Medicare or prescription drug plan.

Medicare Advantage plans are rated based on 5 categories:

  • Member experience with the health plan, which is measured by member ratings.
  • Plan performance, which focuses on member complaints (i.e. issues accessing care or how often members had problems with the plan) and changes that may impact the plan’s performance.
  • Customer service, which is based on how well the health plan handles member appeals.
  • Chronic conditions, which is based on how often members with certain chronic conditions receive their recommended tests and treatments to manage their conditions.
  • Staying healthy, which measures screenings, vaccines, and other routine check-ups.

 

Meanwhile, Part D plans are rated based on 4 categories:

  • Member experience with the drug plan, which is measured by member ratings.
  • Customer service, which is based on how well the health plan handles member appeals.
  • Plan performance, including member complaints, how often members had problems with the plan, and how often they’ve left the plan.
  • Drug pricing and patient safety, which measures how accurate the plan’s pricing information is and how often people with certain medical conditions are prescribed specific drugs.

 

How To Use Medicare Star Ratings To Choose a Plan

Medicare plans with higher ratings generally provide better quality care and are more likely to have satisfied members. In general, Medicare plans with less than 3 stars are considered poor quality and are likely not providing optimal healthcare options to Medicare consumers.

When evaluating the star ratings, it's crucial to consider what's most important to you. Be sure to review your Medicare Advantage or Part D coverage, costs, and formulary each year to ensure it meets your specific needs. By comparing different Medicare plan ratings, you can get a better idea of which plan may be the best fit for your healthcare needs and preferences.

Factors To Consider Beyond Medicare Plan Star Ratings

While the Medicare star rating system is a good baseline tool to use when comparing Medicare plans, it's wise to consider other factors beyond the rating. 

If cost is important to you, for example, you’ll want to look at the monthly premium, deductible, copayments, and coinsurance. You’ll also want to make sure the plan's network of providers includes the doctors, specialists, and hospitals that you want to use. 

Another important factor to consider is the plan's customer service and support. You may want a Medicare Advantage plan that offers easy access to customer service representatives and helpful resources, such as online tools and educational materials.

This is especially important if you're new to Medicare or if you have questions or concerns about your coverage. A plan that provides strong customer support can help ensure you have a positive healthcare experience and can make the most of your Medicare benefits. By considering these factors beyond just the star rating, you can choose a Medicare plan that meets your needs and provides the coverage and support you need to stay healthy.

Remember: While it’s wise to review your plan’s star rating each year, avoid basing your decision on star ratings alone when selecting a Medicare plan. Look at coverage, costs, and network providers too. For example, if you’re choosing a Part D plan, make sure the plan covers your prescription drugs at a cost that fits within your budget.

Common Misconceptions about Medicare Star Ratings

There are certain misconceptions about Medicare star ratings, which can make it difficult for beneficiaries to fully understand the program and its benefits.

Misconception #1. A plan with a higher star rating is always better than one with a lower rating. 

While a high star rating is generally an indicator of a good plan, it's critical to remember that every beneficiary's needs are unique, and what works for one person may not work for another. You should also keep in mind that a plan's star rating is only one factor to consider when choosing a plan. In other words, it should not be the only factor.

Misconception #2. The Medicare star rating system is static and does not change over time. 

Remember: Medicare Star Ratings for health plans can change every year, based on various factors such as member satisfaction, quality of care, and access to services. Plans may lose or gain stars from year to year, which means that a plan that was highly rated in the past may not necessarily maintain that rating in the future. As a beneficiary, you should regularly review your plan's star rating and compare it to other plans to ensure you're getting the best possible coverage for your needs.

The Future of Medicare Star Ratings

As healthcare providers move toward a more value-based care model, patient satisfaction and outcomes will become even more important. This means that star ratings may place greater emphasis on measures such as patient experience and health outcomes, and less on clinical processes and outcomes.

Plus, the star ratings system may incorporate new data sources - such as electronic health records - to provide a more comprehensive view of the quality of care, especially as technology advances. Ultimately, the future of Medicare star ratings is bright: Star ratings will continue to drive improvements in healthcare quality and empower consumers to make more informed decisions about their healthcare options.

Final Thoughts 

In conclusion, the Medicare star rating system uses a variety of metrics to rate the performance of Medicare Advantage Plans and Prescription Drug Plans. You can research and compare the star ratings of Medicare Advantage plans in your area by using our plan comparison tool.

All you need to do is enter your zip code to get started and see Medicare Advantage plans in your zip code. You can then review and compare key parts of a plan like the coverage, costs, network providers and the Medicare star ratings.

If you'd prefer to get guidance from one of our licensed insurance agents, just call 1-800-620-4519 (TTY 711). Our agents are standing by to answer your questions about Medicare plan star ratings and help you find the best plan for your specific needs.

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