What are Medicare Plan Star Ratings and Why They Should Matter To Seniors?

Every year the Centers for Medicare & Medicaid Services (CMS) releases Star Ratings for Medicare Advantage (Medicare Part C) and Medicare Part D prescription drug plans. The information can be an essential piece of information especially for Medicare beneficiaries currently in plans that received average or poor ratings.

2022 Medicare Open Enrollment

The 2022 ratings issued in early October can help individuals compare plans during Medicare Open Enrollment that began on October 15. Plans are rated on a 1-to-5 scale. A 1-star rating represents 'poor' performance with 5 stars signifying 'excellent' performance. 

The 2022 CMS data reports that just over two-thirds (68%) of Medicare Advantage plans that offer prescription drug coverage (MA-PD) have an overall rating of 4 stars or higher. This marks an increase from 49% in 2021 but still means 32% of plans received 3.5 stars or less. CMS estimates that 10% of MA-PD plan enrollees are currently in plans that received between 1 and 3 stars.

When it comes to standalone Plan-D prescription drug plans, the majority (58%) of individuals are in plans rated between 1 and 3 stars. The balance, some 42% are in plans receiving 4 or more stars. For millions of seniors better drug plans may be available. According to the latest CMS data the number of PDP plans rated 5 stars doubled. The number of plans receiving 4 stars increased by 40%.

Medicare calculates the ratings for Part C plans based on as many as 38 different categories. These include preventive services designed to keep plan participants healthy, chronic condition management, responsiveness, customer service and complaints. For Part D prescription drug plans, factors such as pricing, complaints and data on members choosing to leave a particular plan is used.

Generally, a higher overall Star Rating is associated with the number of years of plan experience. MA-PD plans with 10 or more years in business are more likely to have received 4 or more stars compared to those with less than 5 years in the Medicare Advantage program. Entities that are non-profit frequently earn higher ratings than organizations that are for profit.

Star Rating Information Can Help You Plan For 2022

Medicare Open Enrollment is the single most important time of the year for millions of seniors. It is the opportunity to review and find the best Medicare Advantage plan coverage for the coming year. 

A vital first step in considering coverage for 2022 is determining the Star Rating for your current plan. This can be found via the medicare.gov website. Many individuals prefer to work with a local Medicare insurance agent or broker who can share this information and more. Agents can be found using the online directory hosted by the American Association for Medicare Supplement Insurance (AAMSI).

Star Ratings can also be an important component of selecting the best Medicare drug plan for the coming year. Experts advise that those with stand-alone Part D coverage take the time to compare how their current plan stacks up for the coming year. A recent analysis found that a significant percentage of drug plan participants do not compare coverage from year to year.

Plans regularly change coverage tier levels for different prescription medications. Using an online comparison tool can help you compare and find the best Plan D coverage weighing important factors like monthly premium cost, deductibles and copays.

According to a recent AAMSI report, a simple 30-minute drug plan comparison has the potential to save seniors between $500 and $700 in the coming year. That alone should be a 5-star reason to spend time between now and the end of Open Enrollment on December 7.