Nearly 71% of Medicare Advantage prescription drug plan members are enrolled in contracts that received four stars or higher for 2027, according to new ratings released by the Centers for Medicare & Medicaid Services (CMS).
However, only 37% of Medicare Advantage prescription drug (MA-PD) contracts achieved that standard, showing a wide gap between the number of highly rated contracts and the members they serve.
The findings, published Oct. 8, show that 188 of 508 rated MA-PD contracts earned at least four stars. The average star rating, weighted by enrollment, fell slightly from 4.01 in 2026 to 3.99 in 2027.
The results suggest that higher-rated contracts continue to account for most Medicare Advantage enrollment, even as nearly two-thirds of rated contracts fall below the four-star threshold.
CMS uses a five-star rating system to measure Medicare Advantage and Part D plan performance. The assessments cover clinical quality, patient experience and customer service.
The ratings will help Medicare beneficiaries compare coverage during the annual open enrollment period, which runs from Oct. 15 through Dec. 7. They will also affect quality bonus payments to Medicare Advantage insurers in 2028.
Ratings reveal a divide between plan quality and enrollment
The 2027 Medicare Advantage star ratings show mixed results across the industry.
Although nearly 71% of MA-PD members are enrolled in contracts rated four stars or higher, the share of contracts achieving that score has declined from 2026.
CMS awarded five stars to 15 MA-PD contracts for 2027, down from 22 in 2026. The number of contracts rated 4.5 stars also fell, from 89 to 65.
Meanwhile, the number receiving three stars increased from 98 to 124. Another 164 contracts received 3.5 stars, making it the most common rating for the second consecutive year.
These changes follow several years of uneven performance. In 2024, approximately 76% of MA-PD members were enrolled in contracts rated at least four stars. That share dropped to nearly 64% in 2025 before recovering to around 67% in 2026.
The increase to nearly 71% for 2027 means a larger share of members is currently enrolled in contracts that have earned higher ratings, despite the decline in the number of contracts meeting that standard.
The results also show differences between nonprofit and for-profit insurers.
Approximately 44% of nonprofit MA-PD contracts received four stars or higher, compared with 34% of for-profit contracts.
CMS also found that insurers with longer operating histories generally performed better. MA-PD contracts with at least 10 years of experience were more likely to receive four stars or higher than those with less experience.
However, comparisons between years require some caution. CMS regularly adjusts its rating methods and the performance thresholds used to award stars.
For 2027, the agency added measures related to prescription drug safety and increased the weighting of measures assessing physical and mental health.
As a result, changes in star ratings do not necessarily reflect changes in the quality of care alone.
Star ratings could reshape insurer revenue and competition
The financial implications of the 2027 ratings could be significant for Medicare Advantage insurers.
Contracts that achieve four stars or higher generally qualify for quality bonus payments, which increase the federal funding available to insurers.
The latest ratings will influence these payments in 2028, extending their financial effects beyond the upcoming enrollment period.
Higher ratings can also give insurers more funding to offer competitive benefits and premiums. However, the financial effects depend on payment rules, local market conditions and enrollment.
The latest results show how individual insurers can experience different outcomes.
Humana reported that 95% of its Medicare Advantage members are enrolled in plans rated four stars or higher for 2027, marking a substantial improvement in the company’s ratings performance.
The insurer also reported that 42% of its Medicare Advantage members are enrolled in plans rated 4.5 stars.
The improvement could strengthen Humana’s financial position in 2028, when its higher-rated contracts become eligible for additional federal funding.
Aetna, part of CVS Health, reported that more than 69% of its Medicare Advantage members are enrolled in plans rated four stars or higher for 2027, down from 81% in 2026.
Although Aetna remains close to the industry average, the contrast with Humana shows how ratings performance can differ among major insurers.
These differences matter because Medicare Advantage revenue is closely linked to plan quality, enrollment and federal funding.
For insurers operating on narrow margins, changes in quality bonus eligibility can influence future revenue, investment decisions and benefit design.
However, higher star ratings do not guarantee stronger financial results. Insurers must still manage medical costs, administrative expenses and changes in federal reimbursement policies.
The findings may also increase pressure on lower-rated insurers to improve clinical performance, customer service and member satisfaction.
For these companies, improving quality scores while controlling costs will remain an important financial and operational challenge.
Medicare enrollment puts the ratings to an immediate test
The release of the 2027 ratings comes as millions of Medicare beneficiaries prepare to review their coverage for the coming year.
The ratings provide a common measure for comparing health plans, but they represent only one part of the decision.
Beneficiaries must also consider premiums, out-of-pocket costs, prescription drug coverage and whether their preferred doctors and hospitals participate in a plan’s network.
A four-star contract may offer strong overall performance but still be unsuitable for someone with specific healthcare or medication needs.
The coming enrollment period will therefore provide an indication of how insurers use their quality ratings alongside coverage options to attract and retain members.
The broader Medicare Advantage market is also changing as insurers review their geographic presence, benefits and operating costs.
For health plans, the ratings show where improvements in quality and member experience may be needed. For beneficiaries, they offer another way to assess available coverage.
The latest figures also show improvements in the ratings for stand-alone Medicare Part D prescription drug plans.
Approximately 22% of Part D members are enrolled in stand-alone drug plan contracts rated four stars or higher for 2027, compared with about 2% in 2026.
The increase shows how significantly ratings can change between years, although performance remains uneven across contracts.
As insurers prepare for 2027 enrollment and the financial effects that follow in 2028, the share of members covered by highly rated contracts will remain an important measure of market performance.
For insurers, the ability to maintain high ratings across large membership bases could have a growing influence on revenue, benefit design and competition.
Source:
Fierce Healthcare
