In the ever-changing and rapidly expanding Medicare Advantage (MA) landscape, health plans must develop new strategies to improve their Stars program performance or risk decreased enrollment, financial losses, and compromised benefit offerings.
Editor's Note: This article originally appeared on ECG's website.
The Congressional Budget Office (CBO) has estimated that the share of Medicare beneficiaries enrolled in MA plans will reach approximately 51% by 2030. This would represent a drastic increase in penetration from current 2021 levels of roughly 42%. And yet it wouldn’t be the biggest increase in the program’s history. In the last decade, the industry has already seen these rates nearly double—up from just 24% penetration in 2010.
As MA growth continues and market competition rises, performance in the MA Star Rating program will be a key differentiator among plans as well as a driver of overall success.
Performance Shifts as Program Significance Is Recognized
MA Star Ratings not only determine eligibility for bonus payments and higher rebates; they also translate to financial benefits that enable high-performing plans to provide additional supplemental benefits and lower premiums to their members. This, in turn, creates a more attractive offering that can prompt higher enrollment. In fact, one prior analysis suggested that a 1-star rating increase has been associated with an 8% to 12% increase in enrollment the following year. The same study estimated that a 3- to 4-star rating improvement can result in a revenue increase of 13.4% to 17.6% the following year.
Such benefits have not gone unnoticed by health plans. As organizations continue to recognize the power of this fundamental program and develop associated strategic initiatives, the proportion of plans surpassing the 4-star threshold for bonus eligibility has increased dramatically. Click here to continue>>
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