Why Agents Should Care About Medicare Advantage Plan Star Ratings

What You Need to Know

Ratings can give clients an idea of how plans are performing.
The ratings affect how much the plans earn.
Only 11% of plans have 5-star ratings.

As president of a Medicare Advantage plan that’s received 5-star ratings for two years in a row, I’m often asked about the growing popularity of Medicare Advantage — and about the nuances of the star ratings system that’s used to distinguish high levels of patient care and the quality-of-care plans deliver.

Medicare Advantage Plans are taking an increasing share of the Medicare market, which shines a spotlight on the star ratings system that CMS uses each year to make it easy to compare the numerous plans.

There are 507 plans and the average beneficiary has 43 plans to choose from in 2023.

That’s a lot of information to review, and the star system — much like what Yelp does for consumer services — gives beneficiaries the tools they need to pick the best of the best.

Today, Medicare Advantage plans cover 29 million Americans.

That’s 45% of all people in Medicare.

Understanding the plans and how they achieve success is critical for health insurance agents advising clients.

Let’s start with answers to questions agents commonly receive about Medicare Advantage:

Contents

How does Medicare Advantage differ from original Medicare?

Medicare Advantage plans proactively engage patients to enable the best care for their needs and are a popular option among Medicare recipients who want a simpler way to get comprehensive and lower out-of-pocket costs each month.

Medicare Advantage plans simplify the process of getting beneficiaries the coverage they need by including all the parts of Medicare in a single plan: Part A (Hospital), Part B (Outpatient Care) and Part D (Prescription) plus extras that original Medicare doesn’t offer.

Medicare Advantage policies are bundled policies that encompass Medicare Part A (inpatient and hospitalization), Part B (outpatient care) and usually Part D (prescription drug coverage) within the same plans.

Participants pay one charge each month, which allows them to strictly limit and budget the amount they pay out of pocket for medical care during the year – important protection not offered by original Medicare.

In contrast, beneficiaries who buy original Medicare plans are purchasing medical service in an a la carte sort of way: They generally will pay several different monthly premiums for Part B, Part D and Medicare supplemental plans, which fill in coverage gaps left by Medicare Parts A and B.

(Most people pay no premiums for Medicare Part A.)

Will my doctor be included in the plan?

In exchange for broader coverage and better rates, most Medicare Advantage plans require beneficiaries to see doctors within the plan’s network (with the exception of urgent or emergency care).

The good news is it’s easy to explore which doctors are included before signing up.

Plus, star ratings are updated annually by the Centers for Medicare and Medicaid Services (the agency that oversees Medicare) to provide guidance on the expertise and level of service guaranteed by the selected plan.

Medicare Advantage plans span a variety of health care coverage options, with some offering additional services such as vision, hearing, dental, gym memberships, preventive chiropractic care and supplements — even allowances for over-the-counter items, as well as healthy groceries.

What is the star rating system, and what does it tell me about a Medicare Advantage plan?

The star rating system measures the value a plan is delivering to its members based on five metrics: screening tests and vaccines, management of chronic conditions, member experience with the plan, member complaints and customer service.