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The Insurance Agent’s Guide to Star Ratings

Written by www.psmbrokerage.com Admin | Mon, Jan 13, 2025 @ 04:12 PM

Medicare Star Ratings: What They Mean and How Agents Should Use Them

Medicare Star Ratings help beneficiaries and insurance agents compare the quality and performance of Medicare Advantage and Medicare Part D plans.

The Centers for Medicare & Medicaid Services assigns ratings annually on a scale from one to five stars. A higher rating generally reflects stronger performance across the measures CMS evaluates, but it does not automatically make a plan the best choice for every client.

Agents should use Star Ratings as one part of a complete plan comparison alongside:

  • Provider access.
  • Prescription coverage.
  • Premiums.
  • Medical cost sharing.
  • Maximum out-of-pocket limits.
  • Prior authorization.
  • Supplemental benefits.
  • Network rules.
  • The client’s health care and financial needs.

Understanding what the ratings measure—and what they do not measure—can help agents educate clients, set accurate expectations, and make more defensible recommendations.

What Are Medicare Star Ratings?

CMS assigns Star Ratings to eligible:

  • Medicare Advantage plans.
  • Medicare Advantage Prescription Drug plans.
  • Standalone Medicare Part D plans.
  • Certain Medicare Cost Plans.

Ratings range from one to five stars:

Rating CMS performance category
5 stars Excellent
4 stars Above average
3 stars Average
2 stars Below average
1 star Poor

CMS publishes updated ratings each fall for the upcoming plan year. Ratings can change annually as plan performance, quality measures, methodology, cut points, and available data change.

Agents should always verify the rating for the applicable contract year. Do not rely on a prior-year brochure, saved screenshot, or a carrier’s historical reputation.

What Does CMS Measure?

Medicare Star Ratings combine multiple measures intended to reflect health care quality, member experience, customer service, access, and prescription drug plan performance.

The exact number and weighting of measures can change by year and plan type. For 2026, CMS rates Medicare Advantage Prescription Drug contracts on up to 43 measures, Medicare Advantage-only contracts on up to 33 measures, and standalone Part D contracts on up to 12 measures.

Measures fall into broad categories such as:

  • Health outcomes.
  • Intermediate health outcomes.
  • Access to care.
  • Patient experience.
  • Plan processes.

Specific measures may examine areas such as:

  • Preventive screenings.
  • Vaccinations.
  • Chronic condition management.
  • Medication adherence.
  • Drug safety.
  • Member complaints.
  • Appeals.
  • Customer service.
  • Access to appointments and care.
  • Members’ experiences with the plan.
  • Accuracy of drug pricing information.

CMS can add, remove, revise, or reweight measures. A rating change may therefore reflect both plan performance and changes to the ratings methodology.

Overall Ratings vs. Individual Measure Ratings

Agents should distinguish a plan’s overall Star Rating from its scores on individual measures or categories.

A plan may have:

  • A strong overall rating but a weaker score in one area.
  • An average overall rating but high performance on measures important to a particular client.
  • Different ratings for health plan performance and drug plan performance.
  • A rating that changed because of methodology adjustments.

Do not describe a plan as “5-star” because it received five stars on one measure. The term should refer to the plan’s official overall rating when discussing plan quality or enrollment implications.

When helping a client compare plans, review the overall rating and relevant underlying categories when that information is available.

Why Medicare Star Ratings Matter to Beneficiaries

Star Ratings give beneficiaries a standardized way to compare certain aspects of plan performance.

A client may use the rating to ask better questions, such as:

  • How satisfied are members with the plan?
  • How well does the plan handle complaints and appeals?
  • Does the plan perform well on preventive care?
  • How strong is its prescription drug performance?
  • Has the rating improved or declined?
  • Are there areas where the plan performs particularly well or poorly?

The rating can narrow a comparison, but it does not reveal whether the plan includes a client’s doctors or prescriptions.

It also does not show the complete financial impact of joining the plan.

What Star Ratings Do Not Tell Clients

A Star Rating does not automatically tell a client:

  • Whether their doctor participates in the plan.
  • Whether their preferred hospital is in network.
  • Whether every prescription is on the formulary.
  • What drug tier applies.
  • Whether prior authorization is required.
  • What they will pay for a hospital stay.
  • How much they could spend during a high-use year.
  • Whether the plan includes out-of-network coverage.
  • Whether supplemental benefits meet their needs.
  • Whether an allowance can be used for a specific item.
  • Whether the plan is available in their county.
  • Whether they qualify for the plan.

A plan with a lower Star Rating may fit a client better than a higher-rated plan because of provider access, prescription coverage, costs, or plan structure.

Agents should never let the rating replace a complete needs analysis.

Do Higher Star Ratings Mean a Plan Is Better?

A higher overall rating indicates stronger performance under CMS’s current measurement system. It does not establish that the plan is universally better.

For example, compare two hypothetical Medicare Advantage Prescription Drug plans:

Comparison factor Plan A Plan B
Overall Star Rating 4.5 stars 3.5 stars
Client’s primary doctor Out of network In network
Preferred specialist Out of network In network
Important prescription Not on formulary Tier 2
Monthly premium $20 $0
Specialist copay $50 $30
In-network maximum out of pocket $7,500 $5,500
Dental allowance Higher Lower

Plan A has the stronger overall rating and a larger dental benefit. Plan B may still be more suitable because it covers the client’s doctors and prescription and offers lower potential medical costs.

The Star Rating informs the decision. It does not make the decision.

How Agents Should Use Star Ratings in Plan Comparisons

1. Begin With the Client’s Needs

Before discussing ratings, identify the client’s priorities:

  • Doctors and hospitals.
  • Prescriptions and pharmacies.
  • Expected health care use.
  • Travel.
  • Chronic conditions.
  • Preferred plan structure.
  • Budget.
  • Tolerance for referrals and prior authorization.
  • Need for dental, vision, hearing, transportation, or other benefits.

This creates the standard against which every plan should be evaluated.

2. Eliminate Plans That Do Not Meet Essential Needs

A highly rated plan should not remain under consideration when it fails a critical requirement.

Remove or carefully reconsider plans that:

  • Exclude an essential provider.
  • Do not cover an important prescription.
  • Are unavailable in the client’s service area.
  • Do not meet Special Needs Plan eligibility requirements.
  • Create unacceptable hospital or specialist costs.
  • Conflict with the client’s travel or network needs.

3. Compare Star Ratings Among Suitable Plans

Once the unsuitable options have been removed, use Star Ratings to compare the remaining plans.

A stronger rating may help distinguish between plans that otherwise meet the client’s needs.

Consider:

  • Overall rating.
  • Health plan rating.
  • Drug plan rating.
  • Member experience.
  • Complaints.
  • Customer service.
  • Relevant clinical measures.

4. Explain the Rating in Context

A useful explanation might sound like this:

“Medicare gives this plan an overall rating based on quality, member experience, customer service, complaints, and other measures. The rating is helpful, but we should also verify your doctors, prescriptions, costs, and the plan rules before deciding.”

This keeps the rating meaningful without overstating it.

5. Document the Complete Comparison

Record:

  • Plans reviewed.
  • Current Star Ratings.
  • Provider checks.
  • Prescription results.
  • Premiums.
  • Medical cost sharing.
  • Maximum out-of-pocket limits.
  • Supplemental benefits.
  • Client priorities.
  • Reason for the final selection.

Documentation helps demonstrate that the recommendation was based on the client’s needs rather than a single plan characteristic.

How Agents Can Explain a Rating Change

Clients may become concerned when their plan’s rating declines.

A lower rating does not automatically mean:

  • The client must leave the plan.
  • The plan has become unsafe.
  • Benefits have already changed.
  • Providers have left the network.
  • Prescription coverage has changed.
  • The plan will terminate.
  • The client will receive worse medical care.

The agent should review what actually changed.

A rating decline could reflect:

  • Lower performance on certain measures.
  • Changes in member experience.
  • Complaint or appeal results.
  • Medication-adherence performance.
  • New measurement standards.
  • Changes in measure weighting.
  • Revised cut points.
  • Measures returning to the ratings calculation.

Agents should then separately review the plan’s Annual Notice of Change, provider network, formulary, premiums, cost sharing, and benefits for the upcoming year.

PSM’s analysis of why Medicare Advantage Star Ratings fell for 2026 explains how methodology changes can affect ratings and why agents should avoid oversimplifying year-over-year movement.

How Star Ratings Affect Medicare Advantage Plans

Star Ratings are not only a consumer-comparison tool. They can also affect Medicare Advantage plan finances.

Medicare Advantage contracts that meet applicable quality thresholds may qualify for Quality Bonus Program payments. Ratings can also affect rebate calculations and how plans compete in local markets.

Those financial effects may influence a plan’s ability to fund:

  • Supplemental benefits.
  • Lower cost sharing.
  • Premium reductions.
  • Care-management programs.
  • Member services.
  • Quality-improvement initiatives.

However, agents should not claim that a particular rating guarantees a particular benefit.

A plan can change premiums, cost sharing, networks, formularies, or supplemental benefits for many reasons. Agents should rely on current plan documents rather than predicting future benefits from the Star Rating alone.

For a closer look at the current market, review PSM’s 2026 Medicare Advantage Star Ratings takeaways.

Are Higher-Rated Plans Easier to Sell?

A strong Star Rating can help support a client conversation, but higher-rated plans are not automatically easier to sell.

An agent may find a higher-rated plan difficult to recommend when it:

  • Excludes the client’s providers.
  • Has weak prescription coverage for that client.
  • Requires more prior authorization.
  • Has higher hospital costs.
  • Has a less suitable network.
  • Offers benefits the client does not value.
  • Is unavailable in the client’s county.

Conversely, a client may be satisfied with a lower-rated plan that meets their most important needs.

Agents should not use Star Ratings as a shortcut for suitability. The strongest sales process begins with the client’s priorities and uses ratings as supporting evidence.

Do Higher Star Ratings Lead to Better Client Retention?

Higher ratings may indicate stronger performance in areas related to member experience, complaints, service, and quality. However, a high rating does not guarantee that an individual client will remain satisfied.

Retention can depend on:

  • Provider continuity.
  • Prescription changes.
  • Premium changes.
  • Medical cost sharing.
  • Customer service.
  • Claims and authorization experiences.
  • Supplemental-benefit administration.
  • Changes in health.
  • Moves.
  • Carrier service-area decisions.
  • The quality of the agent’s follow-up.

A well-matched plan and year-round service are more reliable retention strategies than choosing a plan based on its rating alone.

Agents can support retention by:

  • Following up after enrollment.
  • Helping clients use plan benefits.
  • Reviewing Annual Notice of Change documents.
  • Checking providers and prescriptions annually.
  • Responding promptly to service concerns.
  • Documenting client interactions.
  • Conducting complete annual reviews.

How to Discuss Lower-Rated Plans

Agents should avoid describing lower-rated plans as “bad plans.”

A lower overall rating means the plan performed less strongly under CMS’s measurement system for that year. It does not tell the entire story for every member.

A balanced explanation could be:

“This plan has a lower overall Medicare rating than some alternatives. Let’s look at the areas contributing to that score and compare them with the factors most important to you, including your doctors, prescriptions, costs, and benefits.”

This approach gives the client useful information without creating unnecessary fear.

Agents should also avoid telling clients they need to change plans solely because a rating declined.

What Is the Low-Performing Icon?

Medicare may identify certain contracts with a low-performing icon when they receive fewer than three stars for three consecutive years.

This warning is different from a plan simply receiving a rating below three stars for one year.

Clients enrolled in a consistently low-performing plan may have access to a Special Enrollment Period under applicable Medicare rules. Agents should verify current eligibility and enrollment guidance before recommending a change.

Do not assume that every plan below three stars automatically triggers the SEP.

A Brief Note About 5-Star Plans

A plan with an overall rating of five stars has earned CMS’s highest performance designation.

When an eligible 5-star Medicare Advantage, Medicare Cost, or standalone Part D plan is available in a beneficiary’s service area, the beneficiary may have access to the 5-star Special Enrollment Period.

That enrollment opportunity has specific timing, eligibility, destination-plan, and coverage-transition rules. It should not be described as unlimited year-round enrollment.

Because the 5-star SEP requires a separate discussion of election periods, drug coverage, Original Medicare, and plan transitions, agents should review dedicated current guidance before using it.

How Agents Can Use Star Ratings in Client Education

Use Plain Language

Avoid reading technical measure names without explaining why they matter.

Connect the rating to familiar questions:

  • Do members report getting needed care?
  • How does the plan respond to complaints?
  • How well does it support medication use?
  • What do members say about customer service?
  • How consistently does the plan provide preventive care?

Show the Official Rating

Use current Medicare Plan Finder information and approved quoting tools.

Explain:

  • The plan year.
  • The overall score.
  • Relevant category scores.
  • Whether the rating changed.
  • That the rating is only one comparison factor.

Compare Plans Side by Side

A visual comparison can help clients understand the relationship between ratings and practical coverage.

Include:

  • Star Rating.
  • Provider access.
  • Prescription coverage.
  • Monthly premium.
  • Major medical copays.
  • Maximum out-of-pocket limit.
  • Important supplemental benefits.
  • Network type.

Address Cost Concerns Directly

Do not tell a client that a higher-rated plan will necessarily save money.

Instead, compare actual costs:

  • Monthly premium.
  • Drug costs.
  • Primary and specialist copays.
  • Hospital costs.
  • Diagnostic services.
  • Outpatient procedures.
  • Maximum out-of-pocket exposure.

A lower-rated plan may be less expensive for one client and more expensive for another.

Using Star Ratings in Marketing

Agents may reference official Medicare Star Ratings in marketing when permitted by current CMS and carrier requirements.

Marketing should:

  • Use the correct plan year.
  • Identify the correct plan or contract.
  • Accurately state the overall rating.
  • Use approved carrier language and materials.
  • Avoid implying that CMS recommends the plan.
  • Avoid suggesting that a higher rating guarantees better benefits.
  • Avoid calling a plan “the best.”
  • Avoid using outdated ratings.
  • Avoid presenting an individual measure as the overall rating.
  • Avoid making the rating more prominent than required disclosures or limitations.

Agents should verify carrier review requirements before creating advertisements, social posts, emails, event materials, or webpages that reference a plan’s rating.

PSM’s guide to Medicare marketing rules provides additional compliance considerations for agent outreach.

Common Star Ratings Mistakes

Treating the Rating as a Complete Plan Review

Star Ratings do not replace provider, prescription, cost, network, or benefit verification.

Saying a Higher-Rated Plan Is Always Better

The plan must fit the individual client.

Calling Lower-Rated Plans Poor Choices

A rating summarizes performance under the CMS methodology. It does not determine suitability for every beneficiary.

Using an Outdated Rating

Ratings are updated annually. Always identify the applicable plan year.

Confusing an Individual Measure With the Overall Rating

A plan may receive five stars in one area without having an overall five-star rating.

Promising Better Health Outcomes

The rating can reflect quality performance, but an agent should not promise an individual medical outcome.

Claiming Higher Ratings Guarantee Lower Costs

Star Ratings and client costs are separate comparison factors.

Ignoring Methodology Changes

Measure weights, specifications, cut points, and included measures can change.

Using Ratings Without Carrier Approval

Plan-specific marketing may require approved materials and review.

Recommending a Switch Based Only on a Rating Change

Review the full plan and the client’s needs before recommending any enrollment action.

A Seven-Question Star Ratings Conversation

Agents can use these questions during plan comparisons:

  1. Which doctors and hospitals are most important to you?
    Provider access may matter more than a difference in ratings.
  2. Which prescriptions must the plan cover?
    Review formulary status, tiers, pharmacies, and restrictions.
  3. What health care services do you expect to use?
    Compare copays and coinsurance for likely services.
  4. How important is predictable spending?
    Review premiums, hospital costs, and maximum out-of-pocket limits.
  5. Which supplemental benefits will you realistically use?
    Compare actual eligibility, limits, and participating providers.
  6. How much weight do you place on member experience and customer service?
    Explain how Star Ratings can provide context in these areas.
  7. Does the higher-rated plan still meet your essential needs?
    Use the rating as a deciding factor only after confirming suitability.

Tools Agents Can Use to Review Star Ratings

Medicare Plan Finder

Medicare Plan Finder displays current plan availability, costs, benefits, formularies, and Star Ratings by location.

Use the client’s correct ZIP code, county, prescriptions, pharmacies, and coverage information.

Approved Quoting and Enrollment Platforms

Agent-facing platforms can help compare plans, but agents should confirm:

  • The data is current.
  • The correct plan year is selected.
  • The official overall rating is displayed.
  • Provider and prescription information is verified separately when needed.

CMS Performance Data

CMS publishes Star Ratings fact sheets, technical notes, measure data, cut points, and other performance resources.

These materials are useful when an agent needs more detail than Medicare Plan Finder provides.

Agents can explore PSM’s Medicare agent resources for quoting, enrollment, education, and business-development support.

A Practical Star Ratings Workflow

Before AEP

  • Review the upcoming year’s ratings.
  • Identify material changes in local plans.
  • Read carrier explanations.
  • Review Annual Notice of Change documents.
  • Update comparison materials.
  • Replace outdated marketing assets.
  • Complete required certifications.

During Plan Comparisons

  • Begin with the client’s needs.
  • Verify providers and prescriptions.
  • Compare costs and benefits.
  • Explain the Star Rating.
  • Discuss relevant rating changes.
  • Avoid presenting the rating as the sole recommendation.
  • Document the comparison.

After Enrollment

  • Confirm the effective date.
  • Help the client understand plan access.
  • Follow up on prescriptions and providers.
  • Assist with benefit activation.
  • Record service concerns.
  • Prepare for the next annual review.

How PSM Brokerage Supports Medicare Agents

PSM Brokerage supports independent insurance agents with resources that may help them compare, explain, and market Medicare plans responsibly.

Support may include:

  • Medicare Advantage and Part D product access.
  • Carrier contracting.
  • Certification guidance.
  • Quoting and enrollment technology.
  • Compliance resources.
  • Product and sales training.
  • No-cost custom marketing support.
  • Customer relationship management and automation tools.
  • Commission assistance.
  • Experienced account support.

Agents can explore PSM’s Medicare products and resources, review insurance agent training, or access the PSM Marketing Hub.

The Bottom Line

Medicare Star Ratings give agents and beneficiaries a standardized way to compare aspects of Medicare Advantage and Part D plan quality and performance.

They can provide useful information about:

  • Quality of care.
  • Member experience.
  • Customer service.
  • Complaints.
  • Prescription drug performance.
  • Plan processes.

But they do not show whether a plan includes the client’s doctors, covers their prescriptions, fits their budget, or provides the most suitable benefits.

Use Star Ratings to strengthen a plan comparison—not replace one.

A responsible agent starts with the client’s needs, verifies the complete plan, explains the rating in context, and documents why the selected option is appropriate.

Strengthen Your Medicare Business With PSM

PSM Brokerage supports independent agents with Medicare carrier access, contracting, certifications, compliance guidance, enrollment technology, training, marketing resources, and experienced account support.

View PSM’s Medicare agent resources or get contracted with PSM Brokerage to learn more.

External Sources

  1. Centers for Medicare & Medicaid Services: 2026 Medicare Advantage and Part D Star Ratings Explains the 2026 Star Ratings methodology, measure categories, contract-rating distribution, and changes affecting Medicare Advantage and Part D plans.

  2. Centers for Medicare & Medicaid Services: Part C and Part D Performance Data Provides current Star Ratings fact sheets, technical notes, measure data, cut points, and downloadable performance files.

  3. Medicare.gov: Medicare Plan Finder Allows agents and beneficiaries to compare available Medicare Advantage and Part D plans, including current costs, benefits, formularies, and Star Ratings.

  4. Centers for Medicare & Medicaid Services: Medicare Advantage and Part D Star Ratings Data Provides the official performance data used to understand annual plan ratings and individual quality measures.

For licensed insurance agent education only. This article is not legal or compliance advice and does not replace current CMS, Medicare, carrier, plan, state, or enrollment-platform guidance. Star Ratings, measures, methodology, plan availability, benefits, networks, formularies, and enrollment rules may change. Verify current plan-specific information before marketing or recommending coverage.