Oct 11, 2021 - Health

The Lake Wobegon effect in Medicare Advantage

Data: Centers for Medicare & Medicaid Services; Chart: Axios Visuals
Data: Centers for Medicare & Medicaid Services; Chart: Axios Visuals

Nine out of 10 Medicare Advantage members are enrolled in plans that earned the government's highest quality marks for 2022, according to new federal data.

Between the lines: Health insurers were quick to tout the quality scores in press releases. But the federal government went easy on the grades during the pandemic, and experts have long considered MA's quality system to be "flawed and inconsistent."

Driving the news: Medicare releases MA star ratings every year ahead of the program's open enrollment window, which starts Oct. 15 and runs until Dec. 7, as a way to help seniors shop for plans (versus enrolling in traditional Medicare).

  • Using a five-star system, Medicare grades MA plans on things like their customer service, members' access to drugs and services, and how well they help people get health screenings.
  • Insurers that attain at least four stars get additional bonus payments from the federal government. Those bonuses have almost quadrupled from $3 billion in 2015 to $11.6 billion in 2021, according to the Kaiser Family Foundation.

The big picture: It was a lot more difficult to be graded as a "high-quality" plan a decade ago.

  • In 2013, just 38% of MA enrollees were in plans with four or more stars.
  • A large chunk of that change can be attributed to insurance companies working the system.
  • Over the past several years, big insurers have merged lower-rated plans into higher-rated ones to get the bonus money, and with no discernible improvement in quality, the Wall Street Journal reported in 2018.

The bottom line: Just because a Medicare Advantage plan gets at least four stars doesn't mean quality is guaranteed.

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