How Is the Quality of a Medicare Plan Measured?

2 August 2023

If you’ve ever researched or talked to someone about a Medicare Advantage (Part C) or Medicare Prescription Drug Plan (Part D), you might have noticed that each plan was rated on a 5-star scale. What do those ratings mean and where do they come from?

The star ratings come from the Centers for Medicare & Medicaid Services (CMS), not just from the plan beneficiaries themselves. So a plan’s star rating is not solely an indication of how satisfied its members are, although that is a major factor. In fact, there are 38 total areas on which plans can be rated. In this article, we introduce and discuss the Medicare Star Rating program so you have a better idea of how the quality of Medicare plans is measured.

Medicare plans are rated on a scale of 1 to 5, with a 5-star rating being the highest score a plan can receive and 1 being the lowest. The stars indicate better overall performance and quality of the plan:

5-star rating: Excellent
4-star rating: Above Average
3-star rating: Average
2-star rating: Below Average
1-star rating: Poor

The star quality ratings give you a way to quickly and easily compare plans based on factors like quality and performance—not just financial considerations like premiums, benefits, and network. These ratings are also important because CMS has created a Special Enrollment Period (SEP) that allows Medicare beneficiaries to enroll in 5-star Medicare Advantage plans at any point during the year.

Starting in 2012, the star ratings took on increased significance for the insurance companies as well. As of this date, carriers can receive bonus payments from the government based on their quality ratings. With this incentive, plans have placed an increasing focus on improving their performance in disease management, preventive care, and customer service, key areas evaluated in the star rating program.

There are specific criteria Medicare considers when rating the plans. To learn more about the criteria factors, visit Medicare.gov.

Each year the star ratings are evaluated and may change based on the overall performance and quality of the plan. During Annual Enrollment Period (AEP), be sure to check the star rating for the plan you are enrolled in or other Medicare Advantage and Part D plans you may be considering switching too for the new plan year.

Claire’s Perspective

Did you know that if your Medicare plan doesn’t have a 5-star rating, you can change your enrollment to a Medicare 5-star rated plan within your service area one time during the 5-Star Special Election Period (SEP) from December 8 to November 30 of the following year? There are some limitations, however. For example, if you have just switched Medicare Advantage plans during your Annual Enrollment Period (AEP), this Special Enrollment Period (SEP) is only available the following plan year. Regardless, for many beneficiaries, 5-star plans represent the best available option, though it depends on your specific needs. To better understand which plans may be best for you, you should talk with Ask Claire or another licensed Medicare agent.

How Do Star Ratings Work in Medicare Advantage Plans?

Medicare Advantage (MA, also called Part C) plans that include health coverage only and no prescription drug coverage are known as “stand-alone” MA plans. For these, the overall quality score is based on 28 different topics in 5 categories:

Screenings, Tests, and Vaccines
Managing Chronic (Long-Term) Conditions
Member Experience with Health Plan
Member Complaints and Changes in the Health Plan’s Performance
Health Plan Customer Service

How Do Star Ratings Work in Medicare Prescription Drug Plans?

For plans that include prescription drug (Part D) coverage only and no health coverage, the overall quality score is based on 12 different topics in 4 categories:

Drug Plan Customer Service
Member Complaints and Changes in the Drug Plan’s Performance
Member Experience with the Drug Plan
Drug Safety and Accuracy of Drug Pricing

How Do Star Ratings Work in Plans That Have Both Medical and Prescription Drug Coverage?

The third category of plans to which the star rating program applies are those that have both medical coverage as well as prescription drug coverage. These are known as Medicare Advantage-Prescription Drug (or MA-PD) plans. These plans are rated across each category, meaning that they get both a medical plan star rating and a prescription drug plan star rating. Their over overall quality score is based on the average of those two scores and covers 38 unique quality and performance metrics

What Do the Stars Actually Mean?

Regardless of whether it is a stand-alone Medicare Advantage (MA) plan, a stand-alone Prescription Drug (PD), or a combined (MA-PD) plan, it will be rated on a scale of 1 to 5 stars, rounded to the nearest half star, in all of the relevant areas. This makes it easy to see how plans in your area compare to each other.

Claire’s Perspective

As you can tell, the rating system is based on data and information collected by the Centers for Medicare & Medicaid Services (CMS). Some of the ratings are based on feedback CMS collects from people on specific Medicare Advantage or Part D plans. These ratings change every year, as the plans are measured every year. Understanding how your plan is rated by CMS is a good way to get some insight into how they treat their members. Feel free to reach out to Ask Claire if you want to understand how plans in your area compare.

Also, while the Star Ratings program is focused on measuring and reporting the quality of Medicare Advantage and Part D plans, the Centers for Medicare and Medicaid Services has developed a variety of tools to help you compare providers, hospitals, nursing homes, and other Medicare approved facilities.