Medicare Advantage, Part D members shifting to higher-rated plans

CMS unveiled star ratings for both Medicare Part D prescription plans and Medicare Advantage plans that show even more of the plans achieving higher star ratings.

The number of Medicare Part D prescription drug plan members who will be in plans with four stars or more in 2020 rose to 27.6%, up from just 3.5% last year, according to data released by the CMS on Friday. The percentage of four-star or greater Medicare Advantage Part C plans with prescription drug coverage grew to a whopping 81.1% of members in 2020, up from 75.3% in 2019.

The topic of lopsided star ratings toward the high end of the scale has been a sticking point with the Medicare Payment Advisory Commission, which believes $6 billion a year could be saved by revamping the way stars are awarded in the Medicare Advantage program.

The average star rating of Part D plans, which are managed by pharmacy benefit management companies and health insurers, has bobbed up and down for years but has always hovered below four stars. The average star rating across the 54 Part D contracts in 2020 was 3.5, up from last year's average rating of 3.34.

Enrollment in Part D prescription drug plans with fewer than three stars dropped to 0.8%, compared to 6.2% last year. Just 5.6% of Part D plans received below three stars, whereas 9.6% did in 2018.

Meanwhile, more than 200 Medicare Advantage plans offering prescription drug coverage, representing 52.4% of these plans for 2020, received at least four stars. Last year, 172, or 45.7% of plans, were part of that category. The average star rating for Medicare Advantage plans with prescription drug coverage was 4.16 for 2020, up from last year's 4.06. Medicare Advantage plans with fewer than three stars dropped to 15%, compared with 21.3% in 2019.

The CMS star rating system for Medicare's private insurance coverage is meant to hold insurers accountable for the care provided to their members.

Health plans have a financial incentive to provide better quality care for their members, because those that garner four or more stars receive a 5% boost to their monthly per-member payments from Medicare.

Twenty-three individual plans scored five stars for 2020. Twenty of those were Medicare Advantage plans offering prescription drug coverage, including nine new contracts that had not earned the high performing indicator last year. Two of the plans were stand-alone prescription drug plans and one was a Medicare Advantage-only plan.

CVS Health, Humana, UnitedHealth Group and Kaiser Foundation Health Plan were among companies offering five-star plans.

Five individual plans covering more than 73,000 people received a warning from the CMS for consistently low quality ratings. Those plans—owned by QHP Financial Group, Delaware Life Insurance Co., Centers Plan for Healthy Living, Universal Health Services and Magellan Health—have earned ratings of 2.5 stars or fewer for a Medicare Advantage or Part D contract since at least 2018.

CMS Administrator Seema Verma said in a statement that the star ratings in the Medicare Advantage and Part D programs indicate that "seniors will have access to more high-quality plans," and pointed to projections the agency released last month suggesting that in 2020 Medicare Advantage average monthly premiums will hit their lowest point in 13 years.