Annual Star Ratings Ensure Consumers Have an Unbiased Comparison of Medicare Advantage Plans

Everything we do, buy or eat these days comes with the opportunity to review and provide feedback for others who are considering the same product or service. I find it to be an effective tool to help me evaluate everything from the comfort of shoes to the restaurant options for a date night with my wife.

What many people outside the health care industry may not realize is that there is a rigorous review process in place for Medicare Advantage plans to guide consumers when comparing the plans available in their area. On average, Medicare enrollees have more than 40 plan options, so considering a plan’s official Star Rating can be incredibly helpful when making a decision.  

Because Medicare Advantage plans and Part D Prescription Drug Plans are contracted by Medicare, the federal government pays close attention to the quality of the product being offered and uses a rating system to assess plans.

Stars Program - the basics
The Stars Program consists of more than 40 measures to analyze the effectiveness of a plan. The measures are grouped into seven operational categories that include things like preventive screenings and clinical interventions, medication adherence and patient safety, appeals, member health outcomes, and patient experiences.

The Centers for Medicare and Medicaid (CMS) performs a diligent and comprehensive review of every measure for every plan across the industry. Each measure is scored by comparing its data against the collective industry data to determine its Star score on a scale of 1 to 5; think about how your teachers used to grade tests on a curve and you didn’t know the exact score that would get you an “A” when you took the test.

The scores of all 40+ measures are then averaged together, with some more heavily weighted than others, to calculate the Overall Star Rating that is published on Medicare Plan Finder. CMS developed this complex, data-driven rating system to provide enrollees with an objective way to measure a plan’s performance. It also helps them consider the quality and cost of a plan simultaneously when making enrollment decisions during the Annual Election Period Oct. 15-Dec. 7.

I am proud to say Humana has led the industry in the percentage of members in plans rated four stars or higher for each of the last six years. For 2024, 94% of Humana Medicare Advantage members are currently in plans rated four stars and above – that’s nearly 5.5 million members. I am also proud to say we more than doubled the number of Humana MA members in five-star plans. In fact, Humana’s 5-star plans cover 37% of all Medicare Advantage 5-star membership. This exceptional performance is especially impressive given the methodology changes that took effect this year.

Methodology changes in 2024
Star Ratings ultimately come down to a complicated mathematical equation – and that equation changed this year. The 2024 plan year is the first year CMS began using a new methodology that removes outliers from the data before establishing the star thresholds that determine whether a contract’s measure performance is 2, 3, 4 or 5 stars.

With the outlier removal method in use, extreme outliers, whether extremely low or extremely high, are removed prior to threshold assignment. Because the majority of outliers are on the low-performing end of the industry spectrum, the thresholds for the higher ratings became even more difficult to meet this year than they have been in the past.

The Impact of Star Ratings on Medicare Advantage Organizations
Medicare Advantage organizations, like Humana, are rewarded for high-quality plans. Plans that achieve a rating of four stars or above receive a quality bonus payment, which enables them to invest more in benefits that support the health and wellness of their members. Examples include vision, dental and hearing benefits; spending card options, gym memberships; and possibly lower premiums or out-of-pocket costs.  

Star Ratings are an important part of the selection process for consumers. Though some may not be familiar with the ratings or use them directly when comparing plans available to them, they are often indirectly identifying higher quality plans as these tend to offer richer benefits and lower premiums or out-of-pocket costs. As the leader of Humana’s Medicare Advantage organization, I can tell you we take great pride in our industry leading ratings, as it demonstrates our commitment to our members and the quality of care and benefits available to support their health care needs.