CMS Restores Medicare Advantage Bonus System with Revisions to Star Ratings
Medicare Advantage Star Ratings Reset Signals a New Chapter for Insurers
The Centers for Medicare and Medicaid Services has set the stage for a notable shift in how Medicare Advantage (MA) plans are measured and rewarded. After a period of industry tension and legal disputes, CMS is bringing back a bonus system that lifts up insurers who consistently earn high star ratings. At the same time, the agency is proposing to streamline the program by retiring a dozen measures it views as overly administrative.
These changes create a mixed landscape. On one hand, MA plans may find new opportunities for financial upside. On the other, the recalibration reflects CMS’s ongoing pressure on insurers to show clearer, cleaner, and more measurable value.
A More Focused Measure Set
CMS’s proposal includes cutting twelve star ratings measures that have long been criticized for being burdensome or disconnected from patient outcomes. One of the most watched removals is the call center performance metric. This measure has been at the center of lawsuits brought by Humana and UnitedHealth Group, where both argue that missed call tallies unfairly downgraded their ratings.
“The goal is to concentrate on quality metrics that demonstrate real value to beneficiaries.”
CMS Official, Public Briefing
The removal of this metric could ease administrative strain for many plans, but it also signals CMS’s broader goal of encouraging more meaningful quality data.
What’s Changing at a Glance
(Only bullet-point section as requested)
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Reinstated bonus rewards for MA plans with consistent high star ratings
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Elimination of 12 administrative heavy star rating measures
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Removal of the call center performance metric now under industry legal scrutiny
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Estimated $13.2 billion in increased Medicare spending from 2028 to 2036 due to these updates
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Greater emphasis on measurable plan performance and administrative efficiency
Financial Impact Beneath the Headlines
The projected $13.2 billion increase in Medicare spending over eight years may appear large, but in context of a Medicare Advantage budget expected to top $750 billion in 2028, it is relatively modest. Even so, for insurers in a competitive MA marketplace, these additional bonus dollars can make a meaningful difference.
To show just how modest the relative change is, here is a simple comparison.
| Year | Total MA Spending (Projected) | Added Spending From CMS Changes |
|---|---|---|
| 2028 | $750 billion | $1.65 billion |
| 2036 | $940 billion | $1.75 billion |
Even small shifts in bonus eligibility can ripple into product design, beneficiary experience, and insurer margins.
A Competitive Landscape Gets Rebalanced
With the bonus system restored, plans that can reliably perform near the top of the ratings scale stand to gain. For others, particularly those that previously struggled with administrative measures, the streamlined system may level the playing field.
“Medicare Advantage has grown fast, and the rules need to keep pace. This reset helps ensure incentives match what seniors value most.”
Health Policy Analyst, Industry Forum
The refreshed focus on quality rather than clerical measurement aligns with CMS’s broader efforts to modernize regulation and ensure dollars flow toward meaningful improvements in care and service.
What Insurers Should Expect Next
The coming years will likely bring more fine tuning of the star ratings program. CMS has emphasized transparency and measurable outcomes, suggesting future refinements will continue in that direction. For insurers, the message is clear. Maintaining or improving star ratings remains one of the most important strategic levers in the Medicare Advantage business.
The industry now enters a period where operational discipline and beneficiary experience matter even more. With bonuses on the table again, the stakes have only grown.