Consumers look to expert ratings to choose restaurants, buy cars, and decide on flat-screen televisions, but they are paying little heed to the star ratings on Medicare plans.
The implications are important, because the Centers for Medicare & Medicaid Services is tying reimbursement to star ratings, rewarding higher-rated plans and allowing 5-star plans to enroll members year-round, instead of just during open enrollment in the fall. The goal is to offset cuts to Medicare reimbursement and reward quality care.
But most seniors have no idea what a star rating is, and they are far more focused on cost, looking for plans with low or no premiums. There were only nine plans with the highest rating of five stars for this year, and while they have grown over the past year, they represent just 1.15 million Medicare Advantage members (out of about 13 million), and most of those are in Kaiser Health Foundation's California plan. For example, in Colorado, Kaiser Foundation Health Plan's 5-star rated HMO has about 78,000 members as of May 2012, almost exactly the same number as UnitedHealthcare's Medicare HMO, rated at just 3.5 stars.
In a phone survey conducted by Harris Interactive on behalf of Kaiser Permanente, almost 60 percent of Medicare-eligible seniors said they had heard nothing at all about the Medicare star rating system. And even among the one third who were familiar with the ratings, almost half did not use them to choose their plans.
Kaiser Permanente had good reason to commission the survey last fall: it is a strong Medicare Advantage player with some of the highest-rated plans in the country. To capitalize on those ratings, it needs educated consumers.
You can?t really blame seniors: the ratings are not easy to find or decipher on CMS? plan finder website. The government has also watered down the significance of the ratings for the next couple of years by deciding to give bonuses to plans with just three or more stars, instead of limiting it to plans with four or five stars. That means 80 percent of plans qualify for bonuses, instead of just 25 percent, further muddying the message for consumers.
There are a few indications that plans are beginning to capitalize on their high ratings, but the numbers are modest and it's not clear whether their growth represents members switching plans or just aging into the program. Tiny Health New England went from 5,407 members in October, when the star ratings for 2012 were announced, to 6,963 members this May. Similarly, Martin's Point Health Care's plan in Maine moved from 10,873 members to 14,477. Group Health Cooperative in Washington and Marshfield Clinic's plan in Wisconsin each grew by more than 10 percent. But Gundersen Lutheran Health System's plan in Wisconsin and Kaiser's plans in California, Colorado, Hawaii, Oregon and Washington had growth in the low double digits.
Those five-star plans will have 5 percent added to their reimbursement in 2012. But that money will be dwarfed by all the money going to large, for-profit plans with average ratings that will get 3 percent bonuses. The high performers may get better at attracting consumers? attention, but they are up against a crowded marketplace of fat and happy Medicare plans.