Medicare Star Ratings

Medicare star ratings are an objective way for consumers to compare private Medicare Advantage plans and Medicare Part D prescription drug plans based on quality and performance.

Each plan receives a rating — weighted by enrollment numbers — between 1 and 5 stars, with 1 being poor and 5 being excellent. Medicare quality star ratings are assigned at the contract level instead of for each individual plan. Most contracts cover multiple plans.

The U.S. Centers for Medicare & Medicaid Services (CMS) implemented the star rating system in 2008 to help potential enrollees compare plans available in their area while encouraging plan providers to continuously improve quality.

High-performing plans receive extra money from the federal government, further incentivizing companies to improve service and expand offerings.

The Affordable Care Act (ACA) created financial bonus payments for Medicare Advantage and Part D plans that receive at least four stars. These bonuses can provide a 5% to 10% increase in funding.

Private plans without star ratings (due to low enrollment or being too new) also receive bonus payments, but at a lower rate of 3.5%.

Private companies are encouraged to use these federal bonuses to reduce out-of-pocket costs for beneficiaries and to offer additional supplemental benefits.

The overall star ratings for Medicare Advantage prescription drug plans (MA-PD) have improved in recent years. According to CMS, about 68% of MA-PD plans earned four stars or higher in 2022 — a 19% increase from 2021.

On the other hand, scores for Medicare Advantage plans without prescription drug coverage (MA-only plans) declined for most measures, with the size of decline varying between each measure.

Medicare Part D prescription drug plans earned an average star rating of 3.70 in 2022.

CMS releases star ratings annually to reflect on beneficiaries’ experiences with Medicare Advantage and Part D prescription plans. Ratings are typically updated in early October every year before open enrollment kicks off on October 15.

If you are looking to switch plans during the open enrollment period, be sure to review star ratings to make an informed decision.

Medicare Advantage plans and Part D plans are measured differently within the star rating system. But each plan rates various measures within the following categories:

Certain measures within each category are weighted differently. For example, the highest weighted group includes improvement measures, such as how much the contract’s overall star rating improved or declined from the previous year.

CMS uses administrative data, contractor data and information from member satisfaction surveys to assess performance and assign star ratings.

You can use CMS’s plan finder tool or call 1-800-MEDICARE to compare ratings and find the best plans in your area. Since plan quality ratings are updated every year, be sure to check the most up-to-date ratings for a more accurate comparison.

CMS star ratings cover hospitals and nursing homes as well, so you can confidently choose a plan and facility that best suits your individual needs.

Within the five overarching categories used to create a star rating, CMS scores Medicare Advantage plans based on 28 unique quality and performance measures. These measures include customer service, number of complaints about the plan, appeal decision timeliness and the rating of health care quality.

In 2021, more than 80% of MA-PD enrollees were in plans that received a 4-star or higher rating. By 2022, that figure rose to 90% and Medicare Advantage plans scored higher for patient experience measures than in previous years.

A total of 74 MA-PD contracts and 10 Medicare Part D prescription drug plan contracts earned a 5-star rating in 2022.

The rating for Medicare Part D prescription drug plans is based on 12 measures. Among these measures are the number of complaints about the plan, whether or not members are getting the prescription drugs they need and how many members chose to leave the plan last year.

According to CMS, if a Medicare Part D prescription drug plan has been in the program for over 10 years, it’s likely to have four or more stars.

Nursing homes with 5-star ratings are considered to provide exceptional care and quality. CMS provides one overall rating for each nursing home, as well as separate ratings based on health inspections, staffing and quality measures.

Health inspections are rated based on the three most recent health inspections resulting from complaints.

The staffing rating is determined by the average number of hours the nursing staff cares for each resident — depending on the level of care needed.

The quality measure rating is an overall score based on 15 different physical and clinical measures taken for nursing home residents.

You can access CMS’s Care Compare tool to find and compare nursing homes based on location.

CMS also works collaboratively with hospitals nationwide to report on the quality of performance offered to patients. The overall hospital star rating is based on a summary of data collected from seven measures: mortality, hospital readmission, safety of care, patient experience, timeliness of care, effectiveness of care and efficient use of medical imaging.

A total of 455 hospitals, or 13.56% of hospitals nationwide, received a 5-star rating in 2021.

The 5-star special enrollment period allows you a one-time opportunity to switch to a 5-star plan in your service area between December 8 and November 30.

If you are currently enrolled in a 5-star plan, you can also switch to a different 5-star plan during this special enrollment period.

Once you sign up for a new plan, your benefits will begin the first day of the month following the month of which the plan received your enrollment request.