News & Commentary

Medicare Advantage Beneficiaries Seem to Consult Star Ratings

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Yet another sighting of the elusive educated consumer. Perhaps. Medicare Advantage beneficiaries appear to be relying on the star system in deciding which plan to enroll in, according to a study. “While star ratings clearly matter to insurers, it is unclear whether they matter to beneficiaries.... No prior study has specifically assessed the association between Medicare Advantage plan star ratings and enrollment,” says a study, “Association Between Medicare Advantage Plan Star Ratings and Enrollment,” in the Jan. 16 issue of the Journal of the American Medical Association.

Researchers looked at 952,000 first-time enrollees and 323,000 enrollees who switched plans in 2011. They focused on 2011 in part because the rating system was extended, with more plans participating and more government bonus money at stake.

The Centers for Medicare & Medicaid Services rates private Medicare Advantage plans. The score (1–5) provides an overall measure of a plan’s quality, and a cumulative indicator of quality of care, access to care, responsiveness, and beneficiary satisfaction.

For first-time enrollees, the difference of one star in the rating meant that it was 9.5 percent more likely that they would choose a particular plan. For people switching plans, a difference of one star meant they were 4.4 percent more likely to choose the more highly rated plan.

“The association we observed may conflict with reports of limited awareness of the star ratings, and prior evidence suggesting that plan information is difficult for beneficiaries to use in decision making,” the study states.

It adds, however, that beneficiaries might be getting their information about the plans from physicians, friends and family members.

Researchers admit that “More highly rated plans may coincidentally be the same ones with more aggressive marketing....”

Still, insurers might want to consider the findings a spur toward better quality, because “as state insurance exchanges are created, our findings argue for careful consideration of communication when presenting health plan options.”