For information on this topic please read our new post, “Health plans “score” with Medicare’s 5-star rating system.”

The Centers for Medicare and Medicaid have released updated star ratings for Medicare Advantage plans, just in time for the Annual Enrollment Period. You can see the new ratings on the Medicare Plan Finder on Medicare.gov.

The ratings are significant for at least two reasons: most importantly, they’re an indicator of the quality of  the service provided by each plan and can serve as a guide for individuals as they evaluate their coverage options.

The Star ratings are also important to the plan’s insurance carrier – because these ratings will be used by CMS to determine if the plan qualifies for a quality bonus payment in  2012. These bonus payments,  part of the health care reform bill, provide an incentive for plans to improve their performance.  MA plans that earn the highest rating of 5 stars are eligible to receive the largest bonus, equal to 5 percent, but all MA plans that have a score of three stars and higher will qualify for a bonus payment in 2012. (Plans with a rating lower than 3 stars for the past three years not only won’t qualify for bonuses, they also have a “low performer” icon placed next to their name.)

Wondering how CMS determines the star ratings? Read on… Read the rest of this entry »