As an executive at 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 rating system that's used to distinguish high levels of patient care and the quality-of-care plans deliver.
The Centers for Medicaid and Services, the federal agency that oversees Medicare, came up with the star rating system to help agents, clients and others compare Medicare Advantage plans.
Some people will tell you that the star ratings don't matter. I, naturally, think they do matter.
There are 507 plans and the average beneficiary has 43 plans to choose from in 2023. That's a lot of information to review.
Just as Yelp helps consumers shop for all types of consumer services, the star ratings give Medicare beneficiaries a tool they can use to pick the best of the best Medicare Advantage plans`.
Understanding the plans and how they achieve success is critical for health insurance agents advising clients.
Medicare Advantage Basics
Medicare Advantage plans are a popular option for Medicare recipients who want a simpler way to get comprehensive and lower out-of-pocket costs each month.
The Medicare program evolved over time, and federal law has created a framework with four major parts.
- The Original Medicare Part A plan covers hospital care.
- The Original Medicare Part B plan covers outpatient care and physician services.
- Medicare Part C allows outside entities to provide Medicare coverage arrangements.
- Medicare Part D provides for the sale of prescription drug coverage.
Medicare Advantage plans are the best known Medicare Part C plans: They now cover 29 million Americans, or 45% of all of the people in Medicare.
Beneficiaries with Original Medicare plans are buying medical services in an a la carte sort of way. Most beneficiaries pay no premiums for Medicare Part A coverage, but they generally will pay separate monthly premiums for Part B coverage, Part D coverage and Medicare supplemental plans, which fill in the many payment gaps left by the Original Medicare plans.
A Medicare Advantage plan issuer cuts through the billing clutter by bundling Medicare Part A coverage, Medicare Part B coverage and, usually, Medicare Part D drug coverage within the same plan.
Participants pay one Medicare Advantage plan charge each month, which allows them to strictly limit and budget the amount they pay out of pocket for medical care during the year. That's an important protection not offered by original Medicare.
The Star Rating System
Here are answers to seven questions agents commonly receive about the Medicare Advantage star rating system.
1. What is the star rating system, and what does it tell me about a Medicare Advantage plan?
CMS summarizes the rules for the 2023 Medicare Advantage and Part D Star Ratings program in a fact sheet.
The 2023 version of 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
- Customer service.
A total of 38 different quality measures are used to make up the full five-metric scoring category.
The system is deliberately designed to proactively engage patients in evaluating and improving the quality of their own care.
In 2023, there are 5-star plans in 36 states.
2. Is it difficult to earn five stars?
Yes. Only 11% of the plans that were rated this year received 5-star ratings.
Adjusted for enrollment levels, the average star rating is 4.15, CMS reports.
3. What do star ratings tell us about Medicare Advantage plans overall?
Star ratings demonstrate that aligned financial incentives have an important effect on the quality of health care plans that deliver.
Good customer service metrics such as call center availability and timely decisions on appeals consistently rate high for these plans.
Ratings are often lower for health and drug plan quality improvement programs.
Barry Streit is senior vice president of growth at 
