This article is reprinted by permission from NerdWallet.
Medicare star ratings reached record highs in 2022, but they’re coming back down for 2023. It’s not the first time the government’s quality ratings for Medicare plans have fallen, but this year’s decline involves more than the usual yearly adjustments.
The COVID-19 pandemic triggered changes to 2022 star rating calculations that led to higher scores. 2023 star ratings don’t get that same boost.
The updated methodology is mostly responsible for the ratings decline for 2023, but it’s still a good idea to shop around for the best plan. Here’s what Medicare beneficiaries need to know when comparing plans during the 2023 Medicare open enrollment period, which runs from Oct. 15 to Dec. 7.
What are Medicare star ratings?
The Centers for Medicare & Medicaid Services, or CMS, calculates Medicare star ratings based on performance and member satisfaction data for Medicare Advantage plans and Medicare Part D prescription drug plans.
Plans are rated on a number of quality measures from 1 to 5 stars, where 1 is the worst and 5 is the best. These measures include customer service, member complaints about the plan, and how well the plan manages chronic conditions. CMS also calculates a rating for each plan as a whole.
Medicare star ratings are updated each October, and you can find them with the Medicare plan-finding tool when you search for plans in your area.
Related: Sticking with your Medicare plan this open enrollment season? You could pay a hefty price.
Why were Medicare star ratings higher in 2022?
The 2022 average overall rating of 4.37 stars for Medicare Advantage plans is the all-time high, and the jump from 2021’s average of 4.06 stars is the largest ever increase, according to a NerdWallet analysis of CMS data.
CMS regularly revises its methodology for star ratings, so it’s not uncommon to see changes from year to year. Because 2022 star ratings relied on 2020 data, there was a much bigger change. The 2020 COVID-19 public health emergency triggered a disaster policy meant to avoid penalizing plans for what CMS calls “extreme and uncontrollable circumstances.”
In most years, this policy affects a small number of plans in areas hit by disasters like hurricanes. For 2022, it went into effect for all Medicare plans and changed the scoring system. If a plan’s rating would have gone down from 2021 to 2022, the plan could keep the higher 2021 score instead. The policy stopped ratings from going down, but plans still got credit for improvements, leading to “higher than normal 2022 star ratings distributions,” according to the CMS fact sheet for the 2023 update.
Also see: Medicare enrollment doesn’t have to be that complicated
Why are Medicare star ratings lower in 2023?
In 2022, all plans qualified for the disaster policy that pushed Medicare star ratings higher. That’s no longer the case for 2023, so the overall average for Medicare Advantage plans fell from 4.37 stars to 4.15 stars.
Prior to 2023, the largest ever decline in this average was 0.1 star from 2020 to 2021. The drop from 2022 to 2023 is the new record holder at 0.22 star, but it still doesn’t outweigh last year’s big increase.
Averages for the 2023 star ratings are on par with 2020 and a little higher than 2021, before the disaster policy made the scoring more lenient for 2022. This suggests that Medicare Advantage plans’ performance hasn’t changed much. The ratings boost for 2022 and subsequent drop for 2023 are mostly a function of scoring changes behind the scenes.
What do lower Medicare star ratings mean for you?
Whether your plan’s ratings went down or you just want to compare your options, the updated star ratings can help.
Here’s how to compare plans using the 2023 Medicare star ratings.
Compare against this year’s averages
For 2023, the average overall star rating for Medicare Advantage plans is 4.15 stars, and the average summary rating for Medicare Part D plans is 3.25 stars. If your plan isn’t performing well compared with these averages, you might want to look for other options.
Shop around during Medicare open enrollment
Medicare open enrollment, which runs from Oct. 15 to Dec. 7 each year, is the perfect time to compare plans. It’s good to shop around every year, but you might especially want to do so if your plan’s star rating went down. See whether there’s a better rated plan available in your area that meets your needs for cost and coverage.
Also read: Will working while receiving Social Security increase my benefit?
Check on the measures that matter to you
If you have specific needs for coverage, take a look at the details of plans’ ratings. For example, both Medicare Advantage and Medicare Part D plans are evaluated on diabetes-specific quality measures. If you have diabetes, performance on those measures might be the best guide for which plans can meet your needs.
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Alex Rosenberg writes for NerdWallet. Email: [email protected]. Twitter: @AlexPRosenberg.
