Dive Brief:

  • CMS will require plans in the federal and state exchanges to display a star rating denoting quality beginning this year for 2020 coverage in an attempt to make it easier for consumers to compare coverage options.
  • Medical care, member experience and plan administration (customer service) are the three categories that will influence ratings and determine whether a plan receives one star, the lowest score, or five stars, the highest. Payer lobby America’s Health Insurance Plans (AHIP) is not opposed to the rankings, calling them a “positive step” Friday.
  • Thursday’s announcement is an expansion of pilot program that launched in 2017. The pilot program first appeared in Virginia and Wisconsin and later expanded to Michigan, Montana and New Hampshire.

Dive Insight:

Consumers used to seeing how their Amazon purchases rank will soon have a similar metric to rely on for their health plan shopping. The launch of the star ratings system — this time for health plans in the Affordable Care Act marketplace — is another attempt by the administration to promote transparency in healthcare. 

Most recently, the administration proposed a rule that would require hospitals to reveal secret negotiated rates with health plans. The administration also wanted drugmakers to disclose prices in TV ads, but that was later struck down in court. 

In its latest bid, CMS said the star ratings will foster more competition and ultimately better cost and quality.

“Knowledge is power, and for the first time, consumers will have access to meaningful, simple-to-use information to compare the quality, along with the price, of health plans on Exchange websites, including HealthCare.gov,” CMS Administrator Seema Verma said in a statement Thursday.

The exchanges, part of the Affordable Care Act, were launched as a way to help individuals buy coverage who, for whatever reason, lack health insurance. To make shopping and comparison easier for consumers, the exchanges were organized into metal tiers, which were designed to indicate the generosity of the plan —  the platinum plan being the most generous and bronze plans the least generous. 

This isn’t CMS’ first ratings system. It also rates hospitals, nursing homes and Medicare Advantage plans. Its hospital star rating system is controversial and has received intense pushback from the industry. CMS is convening a panel of experts to review its star ratings methodology for ranking hospitals. 

The lobbying group that represents the nation’s insurance plans do not seem opposed to the star-ratings. 

“We believe the nationwide expansion of the health quality measures is a positive step to help consumers review and select a plan that fits their needs for the year,” AHIP said Friday in a statement to Healthcare Dive.

For those curious about scores for current exchange plans, CMS has made available the star ratings for the 2019 plan year. 

Star ratings for 2020 coverage will be available closer to open enrollment which begins November 1.