This illustration, captured on June 27, 2024, displays two American flags alongside a medical product. Reuters/Dado Ruvic/Illustration
On October 9, the U.S. government unveiled its Quality Assessment for Medicare Health Care and Prescription Drug Plans for 2026. This assessment will influence the bonuses that health insurers receive from the government.
More broadly, Oppenheimer’s research indicates that 64% of those in Medicare Advantage plans, which cover prescription drugs, are in plans rated four stars or higher.
The Centers for Medicare & Medicaid Services issues a 1-5 star rating to help beneficiaries decide on plans based on various criteria such as customer satisfaction, access to care, and results in cancer screening and managing chronic diseases.
Higher ratings lead to greater payments from the government to insurers, potentially totaling in the hundreds of millions or even billions. This rating will have implications for insurance company earnings in 2027.
Oppenheimer analyst Michael Wiederhorn commented that the results were expected, aligning with previous announcements made by several companies in recent weeks.
CVS Health also highlighted that over 63% of its Aetna Medicare Advantage members will be in a plan rated 4.5 stars for the upcoming year.
Humana and UnitedHealth’s star ratings match what they had previously announced, as per analysts.
UnitedHealth anticipates that by 2026, 78% of its members will be enrolled in plans rated four stars or higher, with 40% in 4.5-star plans.
As for Elevance, 55% of its members now have plans rated four stars or above, a notable increase from 40% last year. Analysts noted that Elevance made significant gains in quality ratings.
“We are dedicated to maintaining this positive trend, ensuring our members access to affordable, quality care and enhancing health outcomes in our communities,” he stated.
