Most of your clients are probably somewhat familiar with Medicare’s star ratings. But they may not fully understand how the plans earn these ratings and how much weight they should be given when choosing a plan. You can help educate your clients on the star ratings and all the factors that should be taken into consideration when comparing plans.

What is Medicare’s Star Rating System

The 5-star rating system is a quality performance metric created by CMS to make it easier for consumers to compare Medicare Advantage and Part D plans across five common measures:

  • Keeping their members healthy i.e., screenings, tests, and vaccines
  • Managing their members chronic health conditions
  • Customer Service
  • Plan responsiveness and care
  • Member complaints, problems getting services and how many members choose to leave the plan

The ratings are released every fall prior to AEP. Star ratings range from one to five stars, with one star being “Poor” and five stars being “Excellent”.

Why a Higher Rated Plan Could Be Better

Plans with higher ratings typically retain and attract more members which generates more revenue for the plan and creates financial stability. A higher rated plan may offer better benefits with lower out of pocket costs. This is because star ratings impact the bonus payments and rebates a plan receives from CMS. The higher the rating the richer the financial incentive with a 5-star plan receiving the most dollars. These additional revenues allow highly rated plans to offer reduced premiums, and more supplemental benefits such as vision, hearing, dental and wellness programs.

Five-star plans also benefit from the 5-Star Special Enrollment Period which allows enrollees to switch to a five-star plan anytime between December 8 and November 30.

Fewer Five-Star Ratings in 2024

A plan that consistently maintains five stars year after year indicates it is a well-managed plan. But this has become harder to achieve over the last few years. In 2020, CMS modified it’s requirements for 2021 star ratings due to the disruption to plans caused by the Covid-19 pandemic. This change allowed plans rated 4 stars or above to maintain their rating. In 2023 these guardrails were removed, and there was a return to normal pre-pandemic scoring methods. Since then, there has been a decline in the number of plans earning the 5-star rating. In 2024, 31 plans achieved the highest rating, compared to 57 in 2023 and 74 in 2022. This drop was not entirely unexpected as the Covid period modified requirements were thought to have inflated the number of 5 star plans.

This decrease means there could be fewer, or even no 5-star plans available in your area. You can assure your clients that a 4 or 4.5 star plan offers a strong alternative. 59% of plans earned this “Above Average” rating in 2024

What Else to Consider

While star ratings are certainly something to consider when choosing a plan, you can help your clients understand the importance of other factors when weighing their options.

  • Affordability- Many clients just consider the monthly premium when thinking about cost. You can help them understand all of the potential out of pocket costs of a plan, including copays, coinsurances, and deductibles.
  • The Network- Are all their doctors, specialists, preferred hospitals and facilities in the plan’s network.
  • The Plan Type- Is an HMO plan a good fit or is a PPO plan with out of network benefits a better option.
  • Chronic Conditions- If your client has a chronic disease or condition for which they receive regular treatment, they will need to know how the plan covers this.
  • Prescription Drug Coverage- What will their medications cost based on the plan’s drug formulary. Are there any restrictions or special requirements such as step edits, prior authorizations, or mail order requirements. Is their preferred pharmacy in the plan’s network. Do they want the option to fill medications while out of town.
  • Supplemental Benefits– How important are additional benefits such as hearing, vision, and dental coverage, gym and wellness benefits. Some plans offer transportation, home delivered meals, OTC rewards, personal emergency alert systems and more.

As an experienced and knowledgeable Medicare agent, you are the best resource for helping your clients navigate their plan options. You can help give them peace of mind knowing they have made the right choice.

The dedicated team at PTT Financial is here to help. Contact us today.