If you’ve ever heard of a “Star Rating” when shopping for Medicare plans, you may have wondered what the ratings represent. Sherri Miller, Empower Brokerage’s Compliance Officer, discusses what goes into the Medicare star ratings and how plans are graded.
What Are Medicare Star Ratings?
Medicare uses a Star Rating System to measure how well Medicare Advantage and Prescription Drug Plans perform. Medicare scores each carrier on how well their plans did in several categories, including quality of care and customer service. There are 5 categories that are rated for Medicare health plans and 4 categories for rating Medicare drug plans. The ratings range from 1 to 5, with one star being the lowest and 5 stars being the highest. After each category is rated, an overall Medicare star rating is assigned to the plans to summarize their performance as a whole.
Plan performances are reviewed each year and assigned a new star rating in the fall. Each plan has the same set categories and is rated the same way.
The categories for Medicare health plans are:
- Beneficiaries willingness to stay healthy (how many screenings, tests and vaccines the plan provided)
- Chronic (long-term) conditions (how well the plan managed these illnesses)
- Plan responsiveness and care
- Member complaints (how many complaints, issues with services, and dropping of the plan from members)
- Customer service
The four categories that Medicare drug plans are rated on are:
- Customer service
- Member complaints (how many complaints, issues with services, and dropping of the plan from members)
- Member experience with drug plan
- Drug pricing and patient safety
How Much Importance Should You Put on Star Ratings?
Medicare star ratings are only one factor to look at when you compare Medicare plans in your area. Just because a plan has high star rating does not mean it is the right plan for you. Other factors to take into consideration are how much the plan will cost, how well it covers your drugs, if you doctor and pharmacy are in network, and the added services it may provide, such as a gym membership. Some plans with average star ratings have extremely high customer retention rates because members love the benefits.
What if Your Plan Has a Low Star Rating?
If Medicare gives a plan less than three stars for three years in a row, the plan will be flagged as low performing. Medicare will mail you a letter informing you that you are enrolled in a plan that has received one or two stars for three years in a row. If you receive this letter, you should check your plan’s costs and benefits to see if it is still a good fit. If not, you can choose to move to a new plan at this time.
Normally, you are limited to switching plans to only a certain time of year, i.e. during the Annual Enrollment Period. However, when you are enrolled in a low performing plan, you qualify for a Special Enrollment Period, or an SEP. You can join or switch to a five-star Medicare Advantage or Part D plan as long as it is available in your service area. This Five-Star SEP begins Dec. 8th and ends on Nov. 30th, and enrollments are effective the first of the following month.