Star Ratings Jump Strengthens Enrollment, Performance of Medicare Advantage Plans

Jim Smith and Eric Meinkow via Healthcare Finance

The Medicare Advantage program continues to grow in popularity with both consumers and health plans.  

At least one-third of seniors are estimated to be in an MA plan rather than fee-for-service Medicare. As baby boomers retire in large numbers, health plans are competing to capture the Medicare Advantage market.  

One edge is to have great results from consumer satisfaction surveys used for star ratings. 

A recent Guidehouse study shows that just a 1-star rating improvement increases enrollment by 8-12%. If the jump is from a 3- to a 4-star rating, the results are a 13% and 17% enrollment increase. 

"From an analysis perspective, Medicare Advantage is expanding," said Jim Smith, managing director of Guidehouse and a co-author of the study. "It has led to an increase in the number of issuers in the marketplace. The ratings and enrollment have become extremely important." 

For this reason, and because they can net a quality bonus payment of 5%, star ratings are high on every health plan's leadership, said co-author Eric Meinkow, a director with Guidehouse. 
"It's very attractive," Meinkow said. "If you're going to be sustainable over the long term, you're going to need that 5%." 

To improve star ratings, what's needed is integration, they said. 

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