Written by Amina Niasse
NEW YORK (Reuters) – The U.S. government on Thursday released its 2025 Quality Assessment of Medicare Health Care and Prescription Drug Plans, which compares to 2026 by every major health insurer, including CVS Health, UnitedHealth Group and Humana. This is the first indication of whether he will receive a bonus in 2020.
The Medicare agency said in a statement that 62% of people currently enrolled in a Medicare Advantage plan that covers prescription drugs are in a 4-star or higher plan, down from 74% last year. It was announced that.
Approximately 40% of the plans offered were 4 stars or higher, down from 42% in 2024.
The agency scores health plans between one and five stars, with five stars indicating the best performance.
Poor ratings could deter older Americans from renewing their Medicare coverage with certain insurers, leading to lower enrollment, Bank of America research analyst Joanna Gadjuk said in a note. said.
Research firm KFF announced in September that the government plans to pay out nearly $12 billion in Star Rating-related bonuses to Medicare Advantage plans in 2024.
CVS rating increase
CVS separately said 88% of MA members are enrolled in a 4-star or higher plan, and more than two-thirds are enrolled in a 4.5-star plan. This includes two major national plans from the company's health insurance arm, Aetna.
In 2024, 87% of members enrolled in a highly rated plan, and in 2023, 21% enrolled.
“This is just a demonstration and evidence that we are on track to improve Aetna's performance,” CVS CEO Karen Lynch said in an interview.
CVS is under pressure from investors including activist hedge fund Glenview after a year in which it missed multiple financial targets due to a slump in Aetna stock. The company is also grappling with rising costs due to rising medical demand and lower-than-expected government reimbursements.
Reuters reported earlier this month that CVS was considering separating its pharmacy and insurance businesses. The company's stock price has fallen 15% since the beginning of the year, to about $66.
Oppenheimer analyst Michael Wiederhorn said in a note that Humana is “likely to be in line” with last week's forecast, which placed it in a 4+ rating plan in 2025. He pointed out that by 2024, 94% of members were doing so, compared to just one in four. .
Barclays analyst Andrew Mok said in a note that CVS is likely to gain members from Humana because of its lower ratings.
(Reporting by Amina Niasse in New York and Mariam E. Sunny in Bengaluru; Editing by Caroline Huemer, Bill Berkrot and Devika Shamnath)
