The Impact of Star Ratings on Rapidly Growing Medicare Advantage Market

Guidehouse analysis explores how MA star ratings improvements, payer-provider collaboration can grow plan enrollment

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The ongoing uncertainty around the Affordable Care Act’s individual market has contributed to financial losses for commercial payers, and an exodus of some from that market. In response, many private payers are expanding or shifting their focus to Medicare Advantage (MA), the private version of the federal Medicare program.

MA plans continue to increase in popularity, with approximately one-third of all Medicare beneficiaries enrolled in these plans. But with aggressive MA expansion by large payers, competing plans must find ways to differentiate their value to grow enrollment.

Increasing star ratings is a key way to attract new enrollees and expand market share, and can translate into additional bonus payments and greater rebates to offer richer benefits. 

A new Guidehouse analysis shows that, for MA plans:

  • A one-star rating improvement could, on average, lead to a year-over-year 8 percent to 12 percent increase in plan enrollment.
  • Improving from a 3-star to 4-star rating could increase revenue between 13.4 percent and 17.6 percent through increased enrollment revenue and additional bonus payments.

Learn how MA star ratings improvements and payer-provider collaboration can grow plan enrollment and market share, and translate into additional bonus payments.

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