There are fewer Medicare Advantage plans receiving high-quality ratings for their 2021 offerings than for this year’s. 

The Centers for Medicare and Medicaid Services has reported that 49% of 400 Advantage plans with prescription drug coverage received four stars or more (the maximum is five), compared to 52% in 2020. Also, there are fewer people enrolled in plans that will have four or five stars in 2021. 

The star ratings measure the quality of service enrollees receive and are based on actual experience of seniors with their plans. 

The CMS rates Medicare Part C plans according to hundreds of specific metrics in five different disciplinary areas:

• Outcomes
• Intermediate outcomes
• Patient experience
• Access
• Process

Star ratings can have a positive or negative effect on enrollees. Plans that score four stars or more receive a number of benefits, including a 5% “quality bonus payment” to the rates they can charge for services. When they receive those extra funds, they often use them to finance extra benefits for their policyholders, which further improves plan satisfaction. 

Conversely, when a plan sees its rating drop below four stars, it loses that quality bonus payment, and it may need to curtail some benefits. 

The average star rating is 4.06 for 2021, compared with 4.16 for 2020 plans. Also, 206 plans received 3.5 stars or less and 350 were not rated due to a lack of data. 

Why stars are falling

There are a number of reasons more plans are seeing star downgrades:

• Insurers are faring worse in enrollees’ ability to get needed medicines for chronic conditions, 
• Plans are scoring worse on health outcomes and administrative measures, and
• CMS boosted the weight of measures for patient experience, complaints and access, which some carriers were not prepared for. 

If a plan is consistently at the bottom of the heap, it is very difficult for it to improve its performance under the star ratings system, because the lower reimbursement rates tend to starve it of resources needed to improve.

Ultimately, every year some plans with low ratings lose their contracts with CMS, and plan members have to go elsewhere.

Some observers have claimed that the ratings may unfairly penalize plans that have a challenging patient load with a lot of people with special or severe medical needs as well as plans that attempt to serve a very rural population with limited infrastructure. 

However, if you are in these plans, the Department of Health and Human Services is encouraging you to explore other Medicare Advantage plans that may be available in your area.

What to do

If your plan’s star rating is falling, you should carefully look over your plan to see if it is dropping any benefits. As star ratings drop, plans start making changes, and at that point you may need to consider starting to evaluate and shop around for a new plan.