Medicare Advantage insurers are facing yet another financial headache after the CMS released largely disappointing 2027 Star Ratings on Thursday.
Just 37% of MA plans with prescription drug coverage earned at least four stars, down from 44% last year. The average enrollment-weighted rating also slipped from 4.01 to 3.99 stars.
The falling ratings can be partially explained by CMS setting a higher bar for plan performance.
Star Ratings are calculated based on plans' performance across up to 43 measures. For 2027, CMS adjusted its methodology, adding some measures and changing the weights of others. Annual adjustments to scoring thresholds made it harder for insurers to earn higher stars, according to an analysis from Newton Smith Group.
For example, colorectal cancer screening thresholds rose by 4 to 11 percentage points, depending on the star level, while kidney health evaluation thresholds increased by 7 to 10 points.
Lower star ratings carry financial consequences that could ripple out to providers participating in value-based care arrangements.
Lower ratings could translate into reduced quality incentives, tighter payer budgets, or tougher contract negotiations, depending on how their agreements are structured. The financial impact will become clearer in 2028, when payments are adjusted based on the 2027 ratings.
Here's what else to know about the 2027 Star Ratings:
Most plans lost ground on criteria related to access and experience
When analyzing scores from 2024 to 2027, we see a complicated picture related to access and utilization.
Average scores for Getting Appointments and Care Quickly and Call Center – Foreign Language Interpreter and TTY Availability improved. However, Getting Needed Care scores declined slightly year over year.
Colorectal cancer screening and emergency department visit follow-up scores also declined. Meanwhile, Customer Service scores have been trending downward since 2024.
Taken together, the scores suggest a possible conundrum. Healthcare organizations may be getting better at scheduling appointments, but not necessarily getting better at routing patients to the specific care they need.
Humana’s turnaround demonstrates the power of patient-centered care
Humana was a notable exception to the industry's disappointing performance.
After two years of steep star declines, the insurer saw its percentage of members in plans rated at least four stars rebound from approximately 20% in 2026 to more than 90% in 2027. On Thursday, Humana’s stock surged 15% following the news.
The improvement could net Humana $3 billion or more in extra revenue in 2028, according to an analysis from TD Cowen.
Humana CEO and President Jim Rechtin emphasized the clinical work behind the turnaround in a post on Linkedin. Humana helped 28,000 members complete overdue mammograms last year, identifying 600 previously undetected cancers. Another 93,000 members completed overdue colorectal cancer screenings, identifying 100 cases of precancer or cancer, Rechtin said.
“Medicare Advantage Star Ratings represent how Humana delivers on member quality and experience,” the CEO wrote. “Preventive screenings are a big deal, because early detection translates into better health outcomes. It’s why we put so much energy into getting our members preventive screenings on time.”
VBC providers have an opportunity to demonstrate their value
Providers should assess their exposure to plans that fell below the four-star threshold, particularly where value-based compensation depends on payer quality performance or available incentive funding.
Providers also have an opportunity to demonstrate their value by helping plans improve clinical measure performance. Although star ratings determine payments to insurers, providers perform a significant amount of the clinical and operational work that influences those scores.
Providers can influence preventive screenings, chronic disease management, care transitions, and patient experience.
This means tracking whether referrals turn into appointments and whether patients complete recommended services.
Acting now to help health plans deliver quality will likely be a competitive advantage. As MA margins tighten, providers that can demonstrate completed care and measurable quality improvements will surely become increasingly valuable partners to health plans.