What Is A Medicare 5-Star Plan?11 minute read

11 minute read

|

Updated for September, 2019

There are thousands of variations of Medicare plans offered by numerous insurance companies around the United States. More than 55 million Americans take advantage of the Medicare benefits offered to them once they turn 65 (or, in some cases, when they become disabled or have end-stage renal failure), and not everyone has the same benefits. This is especially true when it comes to private plans like Medicare Advantage Plans and prescription plans. Medicare 5-star plans are the highest rated and should be considered during your search.

medicare enrollment form

Due to this, Medicare plans are rated in order to help give elderly customers a better sense of how much money they help save, how good the services provided are, the quality of care, and other important factors when it comes to deciding what Medicare plan you are going to settle on.

The best-rated of these plans are called 5-star plans, and only a handful of these ratings are handed out every year.

But what exactly are they? What goes into determining how good a plan is? Who rates the plans? Are the best plans the most expensive plans? Can you get one? When can you get it?

These are all valid questions that come to the forefront when learning that there’s a system that actually ranks which plans tend to service their customers better, so let’s answer them. But first, review the different parts of Medicare and which parts fall under the rating tree.

If they don’t want to include the best care in their priciest plans, then the rating will reflect that

Medicare comes in four main parts—A, B, C, and D. But not every part is given a rating. Parts A and B are largely the same plan for everyone. Each person with parts A and B gets similar coverage—hospital stays, in-patient services, doctor’s visits, medical equipment—with minor changes depending on where you live and what services are available. Because of this, parts A and B aren’t given a rating. On the other hand, parts C and D are the primary parts of Medicare that are given a rating. This is because these are the sections of Medicare that have individuals reaching out to private insurance companies to find a plan on their own. These plans can be wildly different. As a short recap of what these plans are:

Part C

These plans are called Medicare Advantage Plans, and they’re are acquired through private insurance companies approved by Medicare. They cover everything that parts A and B of Medicare do, but they may also offer prescription drug coverage, dental and vision, and other services not covered by parts A and B. Health Management Organization (HMO) plans and Preferred Provider Organization (PPO) plans are the most popular Advantage plans acquired through a private insurer.

Part D

These plans cover prescription medication. You may already have prescription coverage through a Part C plan. The government doesn’t offer its own prescription plans, but rather all of these plans are doled out to private insurers, who you get a plan from. The premiums for these plans range from $0 to a couple hundred dollars per month with varying deductibles, too.

Medicare plans are rated because it helps keep the private insurers and healthcare providers in check. Though any company that offers a Part C or Part D plan has to be approved by Medicare first, the rating system allows customers to receive an honest reporting of what type of coverage they should expect for how much they are paying. The Medicare site says that “giving good quality care means doing the right thing.” The rating system helps reflect that mantra. The doctors should provide quality care in the first place, but quality care can be reflected in their Medicare rating. The same goes for private insurers. If they don’t want to include the best care in their priciest plans, then the rating will reflect that.

Medicare plans are rated up to five stars. According to medicare.gov, the star rating goes as follows:

  • 5 stars: Excellent coverage
  • 4 stars: Above-average coverage
  • 3 stars: Average coverage
  • 2 stars: Below-average coverage
  • 1 star: Poor coverage

Almost half of Medicare Advantage plans that also offer prescription services had 4- or 5-star ratings. That covered about 70 percent of people who have those plans. Each plan is rated as a result of a number of factors, from performance reviews, to how many people left or joined the plan, to the overall quality of care. Let’s dig into each set of factors for parts C and D and which ones help result in a higher rating.
Part C 5-star rating factors:

  • How many people leave the plan over the previous year
  • Overall quality of care for the customers
  • How healthy members of the plan stay through the use of screenings and vaccines
  • How well chronic long-term conditions are managed
  • Members’ experience with the plan

Part D 5-star rating factors:

  • How well the plan’s customer service representatives handle questions and complaints from members
  • How often members had issues with the plans and how many people left the plan over the last year
  • How well members adhered to the prescriptions they were using, meaning they were safe with taking the prescriptions as they were prescribed
  • Overall quality of care
  • How accurate the pricing was from the start of the plan to how much they actually paid over the course of the plan

The added and subtracted measures for the 2019 ratings can be seen here.

The Centers for Medicare and Medicaid Services is who gives each plan a rating. The CMS are the ones who compile the data for the rating systems and also set the standards for what’s included in the rating systems.

The ratings are reviewed every year by the CMS. One plan’s rating may change depending on the criteria set by the CMS. Each year, the CMS adds and subtracts factors that go into the rating’s overall score, though if a rating changes, it’s likely due to the quality of the plan and service rather than the CMS drastically changing their rating system.

For instance, a 5-star plan could quickly turn to a 3-star plan over the course of a year if quality of care drastically drops. On the flip side, a 1-star plan can jump a star or two over the course of the year if they’ve shown the ability to improve their care. Beware of these plans, though, because that still means the plans still have a long way to go before they’re considered 5-star plans.

Nurse Talking To Senior Couple

If you want a plan with 5-star rating, you’re allowed great flexibility with your current plan to move to one.

Well, the first and most obvious advantage of a 5-star plan is they are the best plans Medicare has to offer. Having the best plans at your disposal to sort through before you begin to rifle through different plans can help reduce the stress of worrying if you’re going to get your money’s worth.

A layer below that, 5-star plans—and the rating system in general—allow you to compare above-average-to-excellent plans against each other, allowing you see which of the best plans fit your needs and budget.

For instance, you may find nearly identical 5-star plans, that offer similar services, have great member ratings, and highly regarded reviews for overall quality of care. But one plan is $50 cheaper a month and offers a wider range of healthcare options. Those last features may help you make the decision for which plan you want to get.

If you want a plan with 5-star rating, you’re allowed great flexibility with your current plan to move to one. This is another advantage of the 5-star rating; it allows members of other plans to jump to your plan at virtually any time.

The best part about these plans is that they are offered in most states. You can find out if a 5-star plan is offered in your area via Medicare’s plan finder tool on the Medicare website. You can’t just enroll in a 5-star plan at any time and have the coverage start right away, though. There are two times where you can enroll in a 5-star plan: the Annual Election Period and the 5-star Special Election Period.

The Annual Election Period applies to all Medicare enrollees. It lasts from October 15 to December 7. You can change your plan from any other plan to a 5-star Medicare Advantage or prescription drug plan during this time.

Senior man talking on phone with tablet

The other period is the 5-star Special Election Period (SEP). This lasts from December 8 to November 30 of the following year.

During this Special Election Period, you are allowed to:

  • Switch from an Original Medicare plan to a 5-star Medicare Advantage plan. (If you’re trying to switch to a Medicare Advantage plan that is below 5 stars, you’ll have to wait until the next Annual Election Period.)
  • Change from a less-than-5-star Medicare Advantage plan to a 5-star Medicare Advantage plan.
  • Change from a less-than-5-star prescription drug plan to a 5-star prescription drug plan.
  • Switch between 5-star Medicare Advantage plans.
  • Switch between 5-star prescription drug plans.

If you move from a Medicare Advantage plan with prescription drug coverage that is less than 5 star to just a 5-star prescription drug plan during the SEP, you’ll be automatically enrolled in Original Medicare.

On the other hand, if you switch from a 5-star Medicare Advantage plan that has prescription drug coverage to a 5-star Advantage plan that doesn’t have prescription coverage, you’ll risk losing your prescription drug coverage for the year and incurring a penalty when you do re-enroll in prescription coverage. You’ll have to wait until the following AEP in order to get your prescription coverage back, so you’re better off waiting until then to switch.

If you sign up during the SEP, your coverage will start the first of the following month your sign up. For example, if you sign up February 3, your coverage will start March 1.

If you have any questions regarding Medicare 5-star plans, how to get one, or when you can switch to one, visit the Medicare website or contact your local Social Security office