Where can you find the best-quality Medicare Advantage plan for yourself or a loved one? Look to the stars — Medicare’s star rating system, that is.
Six years ago, Medicare began grading the overall performance of Medicare Advantage — the more comprehensive Medicare plans offered by private insurers — on a five-star scale, with five stars being “excellent,” three meaning “average” and one, “poor.” The ratings are based on more than 50 quality measures that assess how well each plan manages chronic conditions, customer service, wellness programs, member complaints, access to care and quality improvement. Medicare drug plans also receive the star treatment.
You can view the stars and a whole lot more on Medicare.gov’s Medicare Plan Finder service. There, you can shop around and compare all the Medicare Advantage plans available in your area (they’re called Medicare Health Plans on the site) and filter the results by plan type, star rating, estimated annual cost, monthly premium and plan deductible. For a closer look at the stars, click on a plan and select its Health Plan Ratings tab to see how the insurer scored on each of those 50-plus quality measures.
Medicare Plan Finder with its easy-to-use star ratings makes shopping easier for the 13 million Medicare Advantage enrollees who comprise roughly a quarter of all Medicare recipients, says Joyce Dubow, senior health care reform director in the policy and strategy office at AARP.
“One of the important things for all Medicare beneficiaries to learn is that quality and price are not necessarily correlated,” Dubow says “Now they can compare both quality and price on Medicare.gov.”
High star ratings reap rewards
Collecting the data and posting the star ratings for consumers was a health care milestone in itself. But in 2012, Medicare began to use the star ratings to reward Medicare Advantage plan providers that rate high — and penalize those that don’t.
Plans that rated three or more stars received a Medicare reimbursement bonus of up to 5 percent, while those that fell short received no quality bonus at all.
“Public reporting allows consumers to compare quality, along with premiums and other factors that may influence their plan choices,” says Medicare spokeswoman Isabella Leung. “Having financial incentives also spurs the plans to improve their quality.”
To further underscore its quality message, Medicare notifies enrollees if their plan falls short of average.
“We started discouraging policyholders from signing up for underperforming plans,” says Leung. “This past year, for the first time, we sent letters to those enrolled in consistently low-performing plans — those that received less than three stars for at least the last three consecutive years — to let them know that it’s open enrollment and they have the opportunity to select a higher-quality plan.”
“We hope that will spur awareness among seniors about their options to select high quality plans, especially given that more high-quality plans are available in 2013,” she says.
More plans reach for the stars
The number of four- and five-star plans available in 2013 has increased to 127, serving 37 percent of the Medicare Advantage market, compared to the 106 plans serving 28 percent of the market in 2012.
Look for the number of five-star plans to grow from the current 15 as health insurers stretch for the program’s golden ring. For plans, the five-star benefits go beyond the bonuses.
“If your plan is rated five stars, you can sell year-round, not just during open enrollment,” says Dwane McFerrin, vice president of Medicare solutions for Senior Market Sales, an insurance distributor in Omaha, Neb. “If you achieve five-star, everyone wins: the government, the insurance carrier, the consumer, and the distributors who sell more policies. That carrot is really attractive.”
But there could be a dark side to all this quality measuring if it drives too many smaller companies out of business or forces them to consolidate with larger carriers, warns McFerrin, who’s also a member of the Medicare advisory committee for the National Association of Health Underwriters, an industry trade group.
“Some plans are saying, ‘We can’t meet all those requirements the government has created,'” he notes. “Unless they actually own the hospital or have some control over it, it’s really hard to wield a lot of influence to make the customer happy.”
Will seniors take advantage?
While the consolidation trend worries him, McFerrin says the star ratings seem to be catching on with consumers.
“Something must be working because, despite all the regulations, the number of people enrolled in Medicare Advantage plans continues to grow. We’ve got a bulging senior population and there’s no shortage of competition to offer a plan for them,” he says.
But AARP’s Dubow says it’s one thing to provide seniors with performance data and another to get them to use it. Will the baby boom generation overcome the inertia that has traditionally kept seniors from shopping for a better Medicare Advantage plan?
“It remains to be seen,” she says. “If 70 is the new 50, the baby boom population is indeed more comfortable and interested in using this information. But as people age, things happen to you — vision problems, other impairments. We hope that people understand the importance of quality as it relates to cost and begin to use this.”