Medicare Advantage Star Ratings 2025: What Insurers Need to Know

IMC Board
Dec 1, 2025
10 min read

Key Takeaways:

Trump administration reverses course—CMS plans to cancel the Excellent Health Outcomes for All (EHO4all) metric and restore the reward factor that benefits consistently high-performing plans
12 quality measures eliminated—Administrative metrics with minimal variation between plans are being cut starting with 2029 ratings
$13 billion windfall—The proposed changes will drive an additional $13.2 billion to Medicare Advantage insurers between 2028 and 2036
Star ratings stabilizing—2026 ratings showed minimal movement after years of decline, with 62% of enrollment in 4+ star plans
Bonus payments growing—Quality bonus payments reached at least $12.7 billion in 2025, up 7.6% from the prior year
Strategic advantage preserved—Five-star plans retain year-round marketing privileges while other plans face October-December enrollment windows

Will your Medicare Advantage plan be among the winners or losers when the U.S. Centers for Medicare and Medicaid Services (CMS) finalizes its proposed overhaul of the Star Ratings program?

The Trump administration just delivered what many insurers have been waiting for: a reprieve from some of the most challenging changes to Medicare Advantage star ratings in recent years. HOWEVER, this isn't a return to the easy wins of 2022 when 79% of enrollment sat in 4+ star plans and nearly 27% enjoyed five-star status.

CMS plans to prevent a health equity measurement from being incorporated into the Star Ratings program. This move provides breathing room for health plans that feared the metric would push their scores down. Yet the path forward remains complex, with cut points rising, enrollment shifting, and competitive dynamics intensifying.

Understanding Proposed Changes

The CMS proposal contains three major components that will reshape how Medicare Advantage plans are evaluated and compensated. Here's what you need to know about each element.

EHO4all Reversal

Excellent Health Outcomes for All (EHO4all), previously called the health equity index, would have assessed Medicare Advantage insurers based on care quality for members with low incomes, disabilities, or dual Medicare-Medicaid eligibility. This metric was scheduled to debut with 2027 star ratings and would have supplanted the reward factor, which has historically benefited insurers achieving consistently high scores.

Industry advocates mounted an aggressive lobbying campaign. America's Health Insurance Plans (AHIP), the Alliance of Community Health Plans (ACHP), and other trade associations raised concerns about eliminating the reward factor, arguing that it would disadvantage high-performing insurers and those serving rural populations.

Streamlining Quality Measures

CMS wants to remove a dozen metrics focusing on administrative processes where health plan performance typically runs high and beneficiaries struggle to differentiate between offerings including customer service and appeal timeliness. Most cuts would become effective with 2029 star ratings.

Performance on claim denial measures has climbed from 2015 to 2025, with average performance now at or above 95%. Many of these administrative measures carry heavy weights in overall ratings. Their elimination will fundamentally reshape scoring calculations and create new winners and losers among carriers.

Depression Screening Addition

Medicare is seeking to add a measurement reflecting screening patients for depression and follow-up, which would go into effect for 2029 ratings. This signals CMS's continued emphasis on clinical outcomes and preventive care even as it reduces the administrative burden.

Financial Impact and Market Dynamics

Regulatory changes ripple through Medicare Advantage economics and reshape competitive dynamics across the industry. Let's examine the dollars and market movements at stake.

$13 Billion Question

CMS predicts that modifications would cost taxpayers $13.2 billion spanning 2028 through 2036 as more insurers achieve higher star ratings and bonus payments. That's relatively modest compared to Medicare Advantage's projected $750 billion cost in 2028 alone. But for individual carriers fighting to improve margins, these sums matter enormously.

Quality bonus payments have more than quadrupled since 2015, climbing to at least $12.7 billion in 2025. Plans scoring four stars or higher receive 5% payment bonuses in most counties. In urban areas with high Medicare Advantage penetration and low traditional Medicare spending, that bonus doubles to 10%.

Current Star Distribution

2026 ratings revealed a market that's still struggling to regain its footing:

Only 2.3% of members enrolled in five-star plans, up marginally from 2.0% in 2025 but dramatically down from a 27% peak in 2022
Roughly 62% of membership belongs to a 4+ star plan, down from 79% the previous year
Average plan ratings declined from 4.07 to 3.92, with the percentage of 4+ star plans dropping from 32% to 30%
Only seven contracts earned five-star ratings for 2025

Nonprofit organizations more frequently earn higher ratings than for-profit entities.

Winners and Losers in 2026

Individual carrier performance varied dramatically. Several carriers demonstrated strong positive movement in their 2026 ratings.

GuideWell Health (Florida Blue) shifted nearly 24% of membership from 3-star to 4-star plans. Centene added 19.5% more membership to plans above 4 stars. United moved 7.1% more enrollment into 4+ star territory.

Other carriers faced more challenging results. SCAN saw an average decline of 0.47 though its average rating remains above 4 stars. HCSC experienced an average decline of 0.30 stars, with its average rating remaining below 4 stars.

Nearly 70% of Humana's members shifted from 4+ star plans to 3 or 3.5 star plans, compared to 88% of Aetna members maintaining 4+ star status.

What This Means for Your Organization

Different types of carriers face distinct challenges and opportunities depending on their size, market position, and member demographics. Here's how to think about the implications for your specific situation.

For Large National Carriers

The largest plans improved their star ratings 7 basis points while the rest of the market declined by 2 basis points, potentially reflecting the advantages of scale for these larger organizations to drive Stars improvement.

Size matters. Larger organizations possess the infrastructure, data analytics capabilities, and care management programs necessary to move the needle on quality metrics. The consolidation wave continues as carriers seek these advantages.

For Regional and Community Plans

Proposed changes create strategic opportunities for nimble regional players. With the EHO4all metric sidelined, plans no longer face pressure to achieve specific performance benchmarks for dual-eligible and disabled populations though caring for these members well remains clinically and ethically essential.

Regional carriers that excel on the remaining clinical measures may find themselves on more equal footing with national giants that previously benefited from the reward factor.

For Plans Serving Special Populations

Six of the seven Medicare Advantage Prescription Drug Plan (MA-PD) contracts receiving five stars have plan benefit packages that include dual eligible special needs plans.

Special needs plans often demonstrate strong performance because they're purpose-built for specific populations. The proposed changes don't diminish the importance of this focused approach; they simply change how CMS measures and rewards it.

Strategic Imperatives for 2026 and Beyond

Understanding the regulatory landscape is one thing, but executing against it is another. The following priorities should drive your quality improvement roadmap over the next two to three years.

Invest in clinical outcomes—With administrative measures declining in importance and clinical measures gaining prominence, invest heavily in programs that drive real health improvements such as care coordination for chronic conditions, medication adherence programs, preventive care outreach, hospital readmission reduction, and depression screening and mental health support.
Master the cut points— Numerous factors influenced changes in measure-level cut points, with many increasing from 2024 star ratings, meaning that contracts had to achieve higher performance thresholds overall. Cut points recalibrate annually based on industry performance. As the bar rises, yesterday's four-star performance becomes tomorrow's 3.5 stars. Monitor measure-specific cut points obsessively and target interventions where you're closest to the next threshold.
Leverage the reward factor—High-performing plan administrators can breathe a sigh of relief because they'll be able to continue playing on the same field that they've been playing on. If you've historically scored well and benefited from the reward factor, the restoration of this mechanism is your competitive advantage. Maintain consistent excellence across measures to maximize this bonus.
Prepare for continued volatility—Beyond its plan to stop EHO4all from taking effect, the Trump administration has mostly stayed the course forged by his predecessor's administration. Political dynamics shift so it's not a good idea to make big changes to Medicare Advantage before the upcoming midterm elections. Build flexible quality improvement infrastructure that can adapt to regulatory changes regardless of which party is in control.
Focus on member experience—The Consumer Assessment of Healthcare Providers and Systems (CAHPS) measurements carry significant weight in star ratings calculations. Plans with five stars have the strategic advantage of marketing their products year-round, not just during the short open enrollment period in October through December. Excellence in member experience delivers both star rating improvements and marketing privileges. Invest in call center quality and responsiveness, member communication clarity, provider network adequacy, claims processing speed, and care coordination seamlessness.
Monitor consolidation dynamics—The industry continues consolidating as carriers seek scale advantages in star ratings performance. Health Care Service Corporation's acquisition of Cigna's Medicare Advantage business exemplifies this trend. Evaluate whether partnership, acquisition, or organic growth best positions your organization for sustainable star ratings success.

The Bigger Picture

Step back from the regulatory details for a moment and consider what these changes mean for the future of Medicare Advantage as a whole.

The proposed rule remains subject to public comment and finalization. Most changes won't take effect until 2029 star ratings, giving plans time to adjust strategies.

However, the 2027 ratings, which determine 2028 bonus payments, will still reflect current methodology. Don't assume that relief will arrive right away.

Political Considerations

Trump's executive order eliminating diversity, equity, and inclusion (DEI) initiatives across federal agencies directly influenced the EHO4all decision. But star ratings transcend any single administration's priorities.

The fundamental tension remains: CMS wants to drive quality improvement while controlling Medicare Advantage spending, and insurers want to maximize revenue while managing care costs. These objectives don't always align.

Quality Debate

Critics argue that the current system doesn't effectively measure quality or control costs. The Medicare Payment Advisory Commission (MedPAC) and others have observed that star ratings incorporate too many measures, don't adequately account for social risk factors, and may not be a useful indicator of quality because star ratings are reported at the contract rather than the plan level.

Federal spending on quality bonuses continues climbing despite questions about whether higher ratings actually correlate with better patient outcomes. Research shows mixed results when comparing Medicare Advantage to traditional Medicare on various quality metrics.

Action Steps for Executives

Here's what your leadership team should do now:

Model the financial impact—Calculate how proposed changes affect your contracts' star ratings and bonus eligibility. The $13 billion industry windfall won't distribute evenly.
Assess measure-level performance—Identify which administrative measures you've relied on for star rating lift. Develop contingency plans for how their elimination affects your overall scores.
Strengthen clinical programs—Double down on initiatives that improve outcomes on measures that will matter most postreform: chronic disease management, preventive care, and member experience.
Enhance data infrastructure—You can't improve what you don't measure. Ensure that you have real-time visibility into performance on every star rating measure.
Engage in the rule-making process—Submit thoughtful comments on the proposed rule. CMS does read and respond to substantive feedback.
Prepare multiple scenarios—Build strategic plans for different regulatory outcomes. The final rule may differ from the proposed version.
Communicate with agents and brokers—Your distribution partners need to understand how these changes affect your competitive positioning. Arm them with talking points and competitive intelligence.

Action Steps for Insurance Agents

If you're selling Medicare Advantage plans, these star rating changes directly impact your sales strategy and client conversations:

Update your competitive intelligence—Know which carriers improved their ratings and which declined. Star ratings are often the tiebreaker when prospects compare similar plans.
Lead with five-star advantages—Plans with five stars can market year-round, not just during the Annual Enrollment Period (AEP). If you represent a five-star plan, leverage this exclusive window to capture market share.
Reframe bonus benefit conversations—Higher star ratings mean enhanced benefits for members such as extra dental coverage, vision benefits, gym memberships, or reduced premiums. Quantify the dollar value difference for prospects.
Address rating declines proactively—If a plan you sold last year dropped from 4 to 3.5 stars, reach out to existing clients before they receive notice. Control the narrative with facts about what the carrier is doing to improve.
Master the rating methodology—Understand why ratings change so that you can confidently answer clients' questions. Members increasingly research star ratings before enrolling.
Prioritize member experience feedback—Your frontline insights about claim issues, provider network gaps, or customer service problems directly correlate with CAHPS measures. Channel this intelligence back to your carrier partners.
Adjust your product mix strategically—If you represent multiple carriers, allocate more prospecting time to plans that are likely to improve their ratings versus those trending downward. Your commission income depends on enrollment stability.

Action Steps for Digital Marketers

Star rating changes create both content opportunities and paid media challenges for Medicare Advantage marketers:

Refresh all star rating content immediately—Update website copy, landing pages, email templates, and social media profiles to reflect current ratings. Outdated star claims violate CMS marketing guidelines and can trigger compliance issues.
Optimize for star rating search intent—Beneficiaries increasingly search terms like "five star Medicare Advantage plans in [city]" or "highest rated Medicare plans." Create SEO-optimized content targeting these queries while complying with CMS marketing rules.
Leverage star improvements in campaigns—If your plan improved ratings, make it the centerpiece of your AEP creative. A/B test headlines emphasizing star rating gains versus traditional benefit messaging.
Develop educational content around rating changes—Create blog posts, videos, and infographics explaining what star ratings mean, how they're calculated, and why they matter. Position your organization as a trusted resource, not just a seller.
Segment messaging by audience sophistication—Medicare beneficiaries have varying awareness of star ratings. Create content tiers: basic explainers for those new to Medicare, detailed analysis for informed consumers, and competitive comparisons for active shoppers.
Monitor competitor positioning—Set up alerts for competitor star rating mentions in ads, press releases, and digital content. Understand how rival plans are messaging their ratings to identify gaps and opportunities.
Prepare crisis communications—If your plan's rating drops, have messaging ready for digital channels before members see the news elsewhere. Transparency and action plans matter more than spin.
Audit CMS compliance rigorously—Star rating claims in marketing materials face intense regulatory scrutiny. Review every digital asset—display ads, social posts, email signatures, chatbot scripts—for accurate, compliant star rating references.

Sources:

Healthcare Dive: CMS proposes overhauling Medicare Advantage star ratings
HealthScape Advisors: Early look at 2026 Medicare Advantage Stars: Ratings stabilize without meaningful improvement
KFF: Medicare Advantage Quality Bonus Payments Will Total at Least $12.7 Billion in 2025
Modern Healthcare: What tweaks to Medicare Advantage star ratings mean for insurers
STAT: Medicare Advantage plans to gain $13 billion under Trump changes to star ratings
U.S. Centers for Medicare & Medicaid Services (CMS): 2025 Medicare Advantage and Part D Star Ratings

Further Thoughts

The proposed star ratings overhaul delivers wins for some carriers and challenges for others. High-performing plans keep their reward factor. Plans that struggled with the prospect of EHO4all implementation get a reprieve. But nobody's returning to the high-scoring environment of 2022.

Cut points continue rising. Member expectations keep climbing. Competition intensifies as the Medicare Advantage market matures and growth slows.

Success requires relentless focus on the fundamentals: clinical quality, member experience, care coordination, and operational excellence. The carriers that win aren't those that game the system, but rather those that genuinely deliver better care.

As CMS finalizes these changes, it's certain that Medicare Advantage star ratings will continue evolving. The carriers that build adaptable quality infrastructure, invest in meaningful clinical improvements, and maintain strategic flexibility will be best positioned for whatever comes next.

Your bonus payments depend on it. Your market competitiveness requires it. Most importantly, your members deserve it.