Medicare Advantage insurers will lose hundreds of millions of dollars in 2024 amid another year of lower star ratings, the Centers for Medicare and Medicaid Services revealed Friday.
For the 2024 plan year, 42% of plans with prescription drug coverage are rated at least four stars out of five and will receive bonuses from the quality ratings program, down from 51% this year. Nonprofit insurers outperformed for-profit companies: 56% of nonprofit Medicare Advantage carriers will earn bonuses compared with 36% of for-profit companies, according to CMS data.
Among large insurers, Centene received the lowest scores, while Highmark Health and Florida Blue achieved the highest.
Health insurance companies in part have blamed an obscure methodological change—known as “TukeyGate”—for raising the threshold carriers have to meet to achieve four-star scores.
CMS developed the star ratings program to measure the quality of care Medicare Advantage members receive. The program pits insurers against one another by grading scores for 40 clinical, member experience, administrative and quality services measures on a curve, and awarding 5% bonuses to plans that earn at least four stars.
Medicare Advantage carriers will pocket at least $12.8 billion in bonuses through the program this year, according data compiled by KFF. Health insurance companies count on stars bonuses to finance zero-premium plans and generous supplemental benefits. Consumers and brokers also rely on the ratings to help them differentiate between plans in the increasingly competitive Medicare Advantage market.
CMS said 74% of Medicare Advantage members with prescription coverage are enrolled in plans that will have four or more stars in 2024.
Modern Healthcare analyzed CMS data for the 10 largest insurers by enrollment to determine year-over-year changes in the number of members enrolled in four-star plans, star ratings changes and poor-performing contracts. CMS does not give star ratings to plans that have been in the program less than two years, have fewer than 10 members or if companies do not report complete, accurate information. Modern Healthcare did not include those contracts in the analysis.