Without much choice on ACA exchanges, will star ratings matter?

By | September 12, 2019

Star ratings are coming to Affordable Care Act exchange plans soon, but some experts question whether the grades will do more harm than good given the few options now available.

Federal regulators will unveil the ratings Nov. 1, allowing those shopping during ACA open enrollment to see the ranking for a plan they’re considering, with one star being the lowest and five stars the highest. CMS has a similar star ratings system from hospitals but it has received significant blowback over the years, as providers argue the methodology is fundamentally flawed and should be scrapped altogether.

This year, consumers were left with only one insurance carrier selling plans in many counties throughout Missouri, Nebraska, Wyoming, Arizona, Kentucky, Tennessee, Georgia, North Carolina and South Carolina. On the other hand, very few places had the option of three carriers. Choices have continued to dwindle since the launch of the exchanges. In 2014, many more choices were available, including large swaths of the country with access to three or more carriers.

Consumers with few choices who see their only options garnering a less-than-stellar star rating may be prompted to make bad choices, Cynthia Cox, vice president of the Kaiser Family Foundation said.

“I wonder if such a situation might encourage some people to go without health insurance or to purchase non-compliant coverage that lacks the same consumer protections,” she said.

Carol Taylor, an account executive with Kirby Employee Benefits in Florida, told Healthcare Dive the star ratings could be problematic if consumers rely solely on the number of stars to pick a plan.

It’s important for consumers, especially those with chronic conditions, to understand the benefits offered as opposed to relying on a star rating even though that’s how so many consumers are used to shopping on sites such as Amazon.

The rating system isn’t meaningless but will be of little use in areas without robust competition, Sabrina Corlette, a research professor at the Center on Health Insurance Reforms at Georgetown University, told Healthcare Dive.

The lobbying group for the nation’s health insurance plans, AHIP, pushed back on the notion there is little choice,  and said plans are expanding their offerings for 2020, pointing to companies like Oscar and Centene that are adding to their existing ACA footprints.

Overall, AHIP said in a statement the ratings system is a “positive step to help consumers review and select a plan that fits their needs for the year.”

The star rating system geared toward exchange plans was mandated in the Affordable Care Act. The law called for the government to develop a system that would rate exchange plans “on the basis of the relative quality and price” available to shoppers online.

In 2019, the first year of plan star ratings, 95% of plans earned three or more stars, CMS said. Only 19% earned five stars.

After examining the data released by CMS, Healthcare Dive calculated the average overall rating for some of the nation’s largest players on the exchange and found a wide range of scores.

Centene — which covers almost 2 million customers on the exchange — earned an overall rating of 3.3, according to Healthcare Dive’s analysis. Plans affiliated with the Blue Cross Blue Shield Association earned a 4 and Molina, 2.6.

Molina said the CMS data offers valuable insight on areas the company can improve. “This ratings system is one of many data points that we will evaluate as we look for ways to better serve our Marketplace members across the country,” a Molina spokesperson told Healthcare Dive.

Centene and BCBSA did not return requests for comment.

Nami Sumida contributed to this story.

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