Unprecedented Star Ratings Update Will Impact Nearly 2M Members

Following its unprecedented decision to recalculate the 2024 Medicare Advantage Star Ratings after two federal judges agreed there were flaws in their initial calculation, CMS on July 2 released the updated 2024 scores for Part C and Part D contracts. Plans’ overall ratings were updated only if they improved under the revised methodology. Overall, 63 Medicare Advantage Prescription Drug (MA-PD) plan contracts that enroll more than 1.9 million members were impacted, according to AIS Health’s analysis of the CMS release and AIS’s Directory of Health Plans (DHP).

Thirteen MA-PD contracts newly passed the 4-star threshold, meaning they will now receive the 5% quality bonus adjustment for 2025 and potentially qualify for more supplemental rebate dollars. This will add up to hundreds of millions in additional payments, and it could keep some payers from cutting back on supplemental benefits in 2025. Before the new ratings were released, JP Morgan’s Lisa Gill in a note to investors estimated UnitedHealthcare would see $120 million in additional bonus payments vs. $29 million for CVS Health Corp. (which operates Aetna) and $20 million for Humana Inc.

SCAN Heath Plan and Elevance Health, Inc. — which raised the two lawsuits that led to the industry-wide ratings recalculation — will receive $250 million and $310 million in additional bonus payments, respectively.

Modeling from Compass Point, meanwhile, shows that CVS will enjoy a 0.23% increase in 2025 revenue, Centene Corp. will gain 0.25%, The Cigna Group will gain 0.2%, Elevance will gain 0.05% and UnitedHealth Group will gain 0.02% as a result of the ratings revision. The firm also noted that MA startup Clover Health will gain 5.6% in additional 2025 revenue, as 95.5% of the company’s almost 80,000 covered lives moved from 3.0 star plans to 3.5 star plans.

Seven contracts moved from a 4.5 to a 5-star rating. While this designation doesn’t result in any additional bonus payments, these plans are allowed to be marketed year-round.

It’s unclear if CMS will keep this methodology when it calculates 2025’s Star Ratings, set to be released in October.

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