Medicare star ratings, which range from one to five stars, serve as a tool for evaluating the quality of care provided by Medicare Advantage plans. For the third year in a row, Medicare Advantage plans have seen a decline in their average star ratings. For 2025, the average star rating is 3.92, down from 4.07 in 2024. In 2025, only seven plans received a five-star rating, down from 38 in 2024.
What does this decline mean?
Understanding Medicare Advantage Star Ratings
Medicare Advantage (MA) plans were created as a private insurance alternative to traditional Medicare, offering the same benefits as traditional Medicare, plus a range of extras like dental and vision care. In order to help consumers make informed choices, the Centers for Medicare & Medicaid Services (CMS) assigns star ratings based on performance metrics such as customer satisfaction, health outcomes, and service quality. Higher ratings typically lead to increased funding and attract more enrollees, making them a significant focus for insurance carriers.
The Declining Trend - What’s Going On?
According to a recent report, CMS has not made any major changes in star ratings methodology recently. A close look reveals that several factors may be responsible:
Increased Standards: Medicare Advantage plans are rated on 40 clinical quality and member service measures, and for 2025 CMS raised the cut points for many of the measures, meaning plans had to perform better to get higher star ratings. While this is a step toward ensuring better healthcare, it can also result in lower star ratings for plans that previously scored higher.
Two insurance carriers have formally challenged the lower star ratings: UnitedHealthcare filed a lawsuit Sept. 30, disputing the inclusion of a secret shopper phone call in CMS’ star ratings calcuations that they say was flawed. Humana said that there may be potential errors in CMS' calculations after experiencing a drop after "narrowly missing industry cut points on a small number of measures."Pandemic Impact: The COVID-19 pandemic has disrupted healthcare services across the board, and many Medicare beneficiaries faced challenges accessing care. This obviously affected the insurance companies’ ability to provide services. Even though it was beyond the insurors’ control, it impacted their stars.
Consumer Expectations: As beneficiaries become more informed and engaged, their expectations for quality care have risen.
Data Reporting Challenges: Some plans have struggled with the data reporting requirements set by CMS, leading to potential inaccuracies in their performance assessments.
What does it mean?
For Medicare beneficiaries, a decline in star ratings could have a few implications. For one thing, it’s possible that the lower ratings may indicate a decline in the quality of care provided. Since Advantage plans must earn a rating of 4 or higher to receive bonus payments from CMS, many plans may receive less funding from CMS, potentially resulting in reduced benefits or higher costs for enrollees.
Looking Ahead
Addressing the decline in star ratings will require concerted efforts from the various stakeholders:
Insurance Providers: Plans need to focus on improving care delivery, enhancing member engagement, and ensuring compliance with CMS requirements. All those mailings my policyholders complain about will NOT cease.
Policymakers: CMS may need to consider adjusting its rating criteria to better reflect the challenges faced during unprecedented events like the pandemic so that plans aren’t unfairly penalized.
Beneficiaries: Medicare recipients should stay informed about their plan options and understand how star ratings affect their choices. Using the Medicare Plan Finder can help, and I’m always happy to be a resource.
Conclusion
The decline in Medicare Advantage star ratings for the third year in a row is a trend that warrants attention from all corners of the healthcare system. As the landscape evolves, staying informed and proactive will be key for Medicare consumers. Like I frequently say, you must be your own best advocate.