Focus on Medicare's 5-Star Plan Ratings for prescription drug plans

Abstract

Only 5.2% of Medicare beneficiaries utilize the least expensive Medicare Part D prescription drug plan (PDP) available according to an October 2012 article in Health Affairs.1 This research also showed that nationally, the average beneficiary overspends $368 each year, and more than 20% of beneficiaries overspend at least $500 per year. Overspending is more likely with older beneficiaries, with people older than 84 years spending $30 more on average per year compared to those who were 65e69 years of age.1 In addition to unnecessary expense, recent evidence has also suggested that too many Medicare beneficiaries are not utilizing the highest quality plans. Beyond the potential for better outcomes for the enrollee, Congressional Budget Office (CBO) projections suggest that utilization of higher quality plans will also result in significant savings in federal healthcare spending. During Medicare’s annual Open Enrollment Period in November 2007, the Center for Medicare and Medicaid Services (CMS) first released their 5 Star Quality Rating System (“Star Ratings”), which has continued to grow in importance over the years. In combination with both cost and coverage information, the CMS Star Ratings on the Medicare Plan Finder (available at: https://www.medicare.gov/ find-a-plan/questions/home.aspx) are intended to assist both Medicare Part C and D enrollees in identifying higher quality Medicare Advantage Plans (MA-PD) or PDPs. While the CMS 5 Star Nursing Home Quality rating system helps consumers compare nursing homes by providing information on their health inspections, staffing, and quality measures, it should not be confused with the Star Ratings for Medicare Part C and D.