Consumers want Medicare Advantage plans with high ratings

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Insurers have even more incentive to earn high stars for their Medicare Advantage plans: According to a new analysis from Avalere Health, consumers increasingly choose plans with four or more stars.

In fact, 60 percent of consumers enrolled in Medicare Advantage plans rated as four stars or better for 2015, up from 38 percent of consumers making the same choice in 2014. During the same time, Medicare Advantage plans with three-and-a-half stars or fewer enrolled just 39 percent of consumers in 2015--down from 60 percent in 2014.

"The shift to higher star plans is a result of beneficiaries gravitating toward plans that have higher star ratings," Christine Harhaj, senior manager at Avalere, said in the analysis. "In particular, plans with more stars receive higher payments from the Centers for Medicare & Medicaid Services (CMS), allowing them to offer additional benefits that are attractive to beneficiaries."

Since CMS rolled out its star ranking system, insurers with higher rated plans are obviously benefiting. While that's partly due to the insurers offering quality coverage, it's also because CMS is terminating contracts with plans that consistently score fewer than three stars, which has freed up market share for the remaining high-quality plans, FierceHealthPayer previously reported.

Overall, Medicare Advantage plans are improving their quality performance. As of late last year, 16 Medicare Advantage plans had earned a five-star rating, and there was an 80 percent drop in the number of health plans with a "low-performing icon."

"Paying for quality measures in Medicare Advantage creates important incentives for plans to improve how they deliver care, and helps guide beneficiaries as they shop for coverage," Avalere CEO Dan Mendelson said. "The Medicare Advantage experience should serve as an example for other programs, including Medicare Part D and exchanges, looking to potentially link performance on quality measures with plan payment."

Quality scores may carry even more weight in the future. While CMS has proposed a 0.95 percent decrease in Medicare Advantage reimbursement rates for 2016, the agency said that payers with higher quality ratings can in turn expect higher reimbursements.

To learn more:
- here's the Avalere analysis

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