Dive Brief:
About 40% of Medicare Advantage plans with prescription drug coverage will earn four or more stars in 2025, a decline from this year, according to data released Thursday by the CMS.
The five-star ratings system aims to help Medicare beneficiaries compare the quality of MA and prescription plans during open enrollment, which begins next week. But star ratings are also key to insurers’ finances, as they determine whether a plan receives a bonus and its ability to bid against a higher benchmark rate.
The latest release marks another year of declining star ratings. This year, 42% of MA plans with prescription drug coverage received four or more stars, down from 51% in 2023 and 68% in 2022.
Dive Insight:
Weighted by enrollment, about 62% of current beneficiaries are enrolled in MA plans with prescription drug coverage that will have four or more stars next year, compared with about 74% in 2024, according to the CMS.
Only seven MA plans with drug coverage earned five stars for 2025, compared with 38 in 2024. Elevance Health runs two of the plans that scored five stars.
Eight contracts will be identified as consistently low performing plans, an increase from six contracts this year. Five of the low performers are run by Centene, while one is administered by CVS Health.
The latest star ratings follow months of frustration from insurers over their quality ratings for the 2024 plan year.
Scan Health Plan and Elevance both sued the CMS, arguing the regulator had improperly determined their star ratings. The cases centered around the new Tukey method, which identifies and removes outliers before cut points are determined.
Federal judges at least partially sided with the insurers in those cases. Then, this summer, the CMS recalculated MA plans’ star ratings for 2024, a major win for payers.
More than 60 plans offered by 40 insurers received a higher star rating after the recalculation, according to a Healthcare Dive analysis.
Still, insurers remain concerned about their quality ratings. Earlier this month, a group of UnitedHealth subsidiaries sued after the CMS released preliminary star data, alleging regulators had downgraded their stars based on an “arbitrary and capricious” assessment of how a call center handled a single call.
Humana is also appealing some of its most recent star ratings results, the insurer said earlier this month. The payer expected its quality ratings to plummet in 2025, threatening its revenue in 2026, according to a securities filing.
