elevance health explores options after decline in medicare advantage star ratings

Elevance Health is currently facing challenges after experiencing a decline in its Medicare Advantage Star Ratings for 2025. The company is evaluating its options in response to the ratings, which have implications for its member enrollment and financial performance.

The Decline in Star Ratings

Despite improvements in nearly 60% of its star measures for 2026, there has been a decline in the percentage of members enrolled in plans rated four stars or higher. Elevance is challenging the initial scoring with CMS to rectify the situation. The decline in star ratings is concerning as it is tied to a critical contract. Maintaining high star ratings is important for quality bonus payments and consumer selection of Medicare plans.

Broader Implications for the Industry

The recent adjustments to the Medicare Advantage Star Ratings have broader implications for the industry. Only seven plans achieved a five-star rating for Parts C and D performance in 2025, a significant decline from the previous year. Insurers like UnitedHealthcare and Humana have taken legal action against CMS, arguing that the downgrade was arbitrary and capricious. The lawsuits seek judicial intervention ahead of the open enrollment period starting October 15. Humana also filed a lawsuit citing increased cut points as a factor in the decline of its star ratings.

The Evolving Legal Landscape

The legal landscape surrounding Medicare Advantage ratings is evolving, particularly after a Supreme Court ruling that grants judges greater discretion in interpreting federal regulations. This may lead to more insurers challenging CMS ratings and other regulatory decisions. Elevance Health's previous legal victory serves as a precedent, as the court ordered CMS to reassess star ratings for Blue Cross Blue Shield of Georgia.

Reshaping the Competitive Landscape

These legal challenges may signal a shift in how federal regulations are scrutinized and enforced. Insurers may find new avenues to contest unfavorable ratings and regulatory changes. This could reshape the competitive landscape of the Medicare Advantage market.

The Future Trajectory

As Elevance Health and its peers navigate the fallout from the star ratings decline, the focus remains on how these developments will influence consumer choices and the stability of the Medicare Advantage program. The interplay between regulatory changes, legal challenges, and market dynamics will be critical in determining the future trajectory of these insurers.

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