CMS Recalculates Medicare Advantage Star Ratings Again
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- CMS recalculated 2026 Medicare Advantage plan quality ratings per a new government memo, the latest reversal triggered by legal action from the health insurance industry
- Health insurance companies have inundated CMS with lawsuits in recent years, challenging lower star ratings that put taxpayer-funded bonus payments at risk
- Most insurers have lost their cases, but a handful have won — and two years ago CMS had to redo star ratings after federal judges ruled the government erred in its original calculations
- Medicare Advantage plans earning at least four out of five stars qualify for bonus payments, which have ballooned to $16 billion this year, nearly the entire CDC budget and double the 2020 figure
- The repeated recalculations add volatility to a program where a fraction of a star difference can shift billions in federal bonus dollars between competing insurers
Why it matters: Star ratings directly gate $16 billion in annual Medicare Advantage bonus payments — a sum that has doubled since 2020 and now rivals the CDC's entire budget. When courts force CMS to redo its math, the instability threatens to reshape which insurers capture those bonuses and which seniors see changes to their plan options.
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