New Star Rating System for Marketplace Plans

In an August 15, 2019 news release, the Centers for Medicare & Medicaid Services announced that, beginning with the 2020 Open Enrollment Period, CMS “will require the display of the five-star Quality Rating System (or star ratings) available nationwide for health plans offered on the Health Insurance Exchanges.”

Similar to the star ratings CMS currently uses on the Medicare.gov website and the Nursing Home Compare website, “consumers will be able to compare health coverage choices using a five-star quality rating of each plan on Exchange websites, including HealthCare.gov.”

CMS Administrator Seem Verma explains that this new feature is “part of the Trump Administration’s broader quality initiative” and says that the increased transparency will benefit consumers by providing them with the tools they need to make better healthcare decisions:

Knowledge is power, and for the first time, consumers will have access to meaningful, simple-to-use information to compare the quality, along with the price, of health plans on Exchange websites, including HealthCare.gov. This addresses our strongly held commitment to equip consumers with the tools they need to find the best choice possible. Increasing transparency and competition drive better quality and cost, with consumers benefitting the most.

As explained in a fact sheet that accompanied the press release, several factors are considered in determining the star ratings, including Medical Care, Member Experience and Plan Administration:

• Medical Care is based on how well the plans’ network providers manage member healthcare, including providing regular screenings, vaccines, and other basic health services and monitoring some conditions. 
• Member Experience is based on surveys of member satisfaction with their healthcare and doctors and ease of getting appointments and services. 
• Plan Administration is based on how well the plan is run, including customer service, access to needed information and network providers ordering appropriate tests and treatment.

CMS also points out that not all plans will have a star rating, especially if a plan is new or if it has very low enrollment, and that the lack of a star rating does not necessarily mean that the quality of the plan is low.

The new star rating system applies not only in states that use Healthcare.gov but also in states that have developed their own state-based exchange (SBE). As HealthPayer Intelligence explains in an article about the new rating system, the requirements  for SBEs “are the same as the federal exchange except that these plans are permitted to display further quality information as desired and can customize their design, including the titles of the star ratings.”

It remains to be seen how much weight consumers will give the new rating system when making an enrollment decision, but, generally, more information is better than less information, so we’re crossing our fingers and hoping that the new star rating program will be a beneficial tool for your clients.