Radar on Medicare Advantage
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2025 Star Ratings Deliver ‘Reckoning’ That Will Drive Quality, Leading Expert Says
CMS on Oct. 10 revealed that 40% of Medicare Advantage Prescription Drug (MA-PD) plans — or 209 contracts — that will be offered in 2025 earned an overall Star Rating of 4 or higher, thus qualifying for quality bonus payments (QBPs) in 2026. That percentage compares with 45% of MA-PDs after CMS’s unprecedented recalculation of the 2024 Star Ratings and follows a continued decline in overall ratings since the expiration of pandemic-era flexibilities. The 2025 Star Ratings also resulted in just seven MA-PD contracts earning 5 stars, compared with 38 in 2024, while the average overall MA-PD rating fell from 4.07 to 3.92.
Prior to CMS’s release of the 2025 Star Ratings, industry analysts had signaled that nearly two-thirds of measure-level cut points increased from the 2024 Star Ratings, meaning contracts in general had to achieve higher performance on these measures to perform well. This was also the second year that CMS applied the new Tukey outlier deletion methodology to the clustering methodology used to establish cut points for the non-Consumer Assessment of Healthcare Providers and Systems (CAHPS) measures. And it was the second year in which CMS used new cut point “guardrails” to limit the upward and downward movement of cut points by 5% in either direction, which was the primary source of controversy in the 2024 Star Ratings.
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Closer Looks at 2025 Medicare Advantage Landscape Show Retreats and Realignments
In the weeks following the Sept. 27 release of the 2025 Medicare Advantage and Part D landscape files and other key information, experts taking a deeper look at next year’s plan offerings agree that there’s not one linear story that can be told about the market. Of the clear takeaways, MA insurers are making strategic service area reductions, continuing to invest in Special Needs Plans (SNPs) addressing chronic conditions and dual eligibles, and shifting around various plan design elements to maintain $0 premiums. Given plans’ repositioning efforts and benefit changes that may not all be obvious, experts say Medicare beneficiaries will likely need to shop around during the Annual Election Period (AEP), which began on Oct. 15.
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Alignment Health Plan, SCAN Health Plan Focus on Core Markets for 2025
Signaling a departure from previous years of land grabs and benefit enhancements, Medicare Advantage insurers in 2025 are strategically scaling back as they face reimbursement challenges and rising medical costs. AIS Health, a division of MMIT, spoke with the Medicare market presidents for two regional plans on their decisions to hold off on geographic growth and concentrate on opportunities within their existing markets.
For 2025, Long Beach, Calif.-based SCAN Health Plan said it will offer MA plans in 22 counties across California, Arizona, Nevada, Texas and New Mexico. According to Karen Schulte, SCAN’s Medicare president, the not-for-profit insurer chose not to alter its geographic presence but to streamline its Chronic Condition Special Needs Plan (C-SNP) portfolio — combining plans that separately addressed diabetes and heart disease — and to invest in serving more of its vulnerable members in existing service areas. Those efforts can be seen through a new grocery allowance, offered in partnership with Instacart, and the new SCAN Allied HMO plan tailored for older Asian adults.
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In 2025 AEP, Seniors Who Don’t Compare Plans Risk Higher Costs, Coverage Disruptions
Most Medicare beneficiaries do not compare their coverage options during open enrollment, according to a recent analysis from KFF. The Medicare Annual Election Period (AEP), which runs from Oct. 15 to Dec. 7 each year, is a critical time for beneficiaries to evaluate and select Medicare coverage that will best suit their needs. Yet researchers found that during the 2021 AEP, only 31% of Medicare beneficiaries reviewed their coverage options for the 2022 plan year. These findings highlight the need for greater consumer awareness and education, especially as significant plan revisions are expected for 2025.
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News Briefs: UnitedHealth Reports Higher MLR, Driven by Member Mix, Coding Intensity
UnitedHealth Group’s third-quarter 2024 revenues grew nearly $8.5 billion to $100.8 billion, while medical loss ratio (MLR) for the recent quarter was 85.2%, compared to 82.3% in the year-ago quarter. The insurer attributed the higher MLR to “previously noted CMS Medicare funding reductions, medical reserve development effects and business and member mix.” During the company’s earnings conference call, Chief Financial Officer John Rex — who also became president of UnitedHealth Group in April — added that the results reflected the persistence of certain utilization patterns at higher levels than anticipated, “the still pronounced upshift in coding intensity by hospitals” and “the continued timing mismatch between the current health status of Medicaid members and state rate updates.” For the quarter ending Sept. 30, the UnitedHealthcare segment reported revenues of $74.9 billion — a year-over-year increase of $5 billion, reflecting membership growth. For the full year, the company narrowed its adjusted net earnings guidance to a range of $27.50 to $27.75 per share, “even as it absorbs an estimated $0.75 per share of business disruption impacts for the affected Change Healthcare services,” which increased by approximately 10 cents per share from the estimate provided in the second quarter, stated the insurer.
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