Each year, the Centers for Medicare and Medicaid Services (CMS) rates Medicare health and drug plans to help consumers compare plan quality. The ratings for health plans are based on the plan's performance in helping enrollees stay healthy and managing chronic conditions, member experience with the plan, member complaints and changes in plan performance, and customer service. The ratings for drug plans are based on customer service, member complaints and changes in plan performance, and member experience with the plan’s drug services, as well as drug safety and accuracy of drug pricing.1 Ratings are on a 5-star scale with 1 being the worst score, 3 being average, and 5 being the best.
A recent survey of seniors found that Medicare star ratings had little to no influence on their plan decisions.2 Premiums and out-of-pocket costs, provider access, and brand familiarity were more important factors to consumers.3 These findings are consistent with several other studies showing that older consumers tend to prefer long-established brands.4 Moreover, this preference for familiar brands is not limited to seniors. A 2013 Harris Interactive poll found that 82% of Americans felt that health insurer brand was important when deciding on a health insurance plan.5
For the last five years,6 Blue Cross and Blue Shield was chosen as the Harris Poll EquiTrend Health Plan Brand of the Year, a designation based on brand familiarity, quality, and purchase consideration.7 Blue Cross and Blue Shield is not a single company like many other brands in the rankings, but rather a system of thirty-seven independent and locally operated companies including the publicly traded Anthem Inc. (ANTM) and Triple-S Management Corporation (GTS). Altogether, the Blue Cross companies provide healthcare coverage to a third of all Americans.8
HealthPocket examined star ratings for Blue Cross and Blue Shield plans to see whether their quality was consistent given consumer perceptions about the Blue Cross Blue Shield brand. Overall star ratings for Blue Cross and Blue Shield plans ranged from 2.5 to 4.5 out of 5 stars. Therefore, the best Blue Cross plan had an 80% higher quality rating than the worst Blue Cross plan.
The overall plan ratings include a component evaluating the medical services delivered by the health plan and a drug plan component evaluating the prescription medication coverage. HealthPocket found that Blue Cross and Blue Shield health plan ratings ranged from 2.5 to 4.5 stars, but Blue Cross and Blue Shield drug plan ratings had an even greater range of 2.5 to 5 stars.
On average, Blue Cross and Blue Shield companies had an overall star rating of 3.60. Despite the brand’s popularity, this average score is slightly lower than the average star ratings for Medicare plans in general. The Blue Cross and Blue Shield average star rating across its individual companies was higher than the average rating for UnitedHealthcare (3.38), the firm with the highest market share (20%) of Medicare Advantage enrollment in 2014.9 However, Blue Cross was below Kaiser (4.92), Humana (3.95), and Aetna (3.82).
|Overall star rating||Health plan rating||Drug plan rating|
|Blue Cross and Blue Shield||3.60||3.63||3.70|
|All 2015 Medicare contracts||3.64||3.60||3.68|
CMS has the authority to sanction low-quality Medicare contracts. In 2014, CMS sanctioned two Medicare Part C contracts and one Medicare Part D contract from Capital Blue Cross for failing to provide enrollees with services and benefits in accordance with CMS requirements.10 Both Medicare Advantage contracts had health and drug plan ratings of 4, but because of the sanctions they were assigned overall ratings of 2.5.11
As a result of the sanctions, enrollment and marketing were suspended for all three Capital Blue Cross contracts. In total, there were only four sanctioned 2015 Medicare Advantage contracts and two sanctioned Prescription Drug Plan contracts, so Capital Blue Cross accounted for 50% of the sanctioned Medicare contracts in 2015.
Based on the CMS star ratings for 2015 Medicare plans, quality is not the same across Blue Cross plans. There are sanctioned Blue Cross plans with less than 3 stars, and there are very good Blue Cross plans with 4.5 stars. This quality difference is not surprising, since Blue Cross consists of 37 independent companies. However, many consumers are unaware that Blue Cross Blue Shield is not a single company.
Quality was also inconsistent for other insurers with large market shares. Overall star ratings for United Healthcare plans ranged from 2.5 to 4.5, the same range as Blue Cross. Humana’s overall ratings ranged from 3 to 5 stars, while Aetna’s ratings ranged from 3 to 4.5 stars. Given the inconsistent quality of plans from these well-known insurers, it is important for seniors to consider quality and not just brand familiarity when they choose Medicare plans.
Data for this study was obtained from the 2015 Part C and D Medicare Star Ratings Data (v 10 23 2015), the 2015 Medicare Advantage Landscape Source Files (v 11 04 14), and the 2015 Prescription Drug Plan Landscape Source Files (v 10 15 14). Average star ratings were calculated across Medicare contracts (not plans) since star ratings are assigned at the contract level.
This analysis was written by Jesse Geneson, data scientist at HealthPocket, and Kev Coleman, Head of Research & Data at HealthPocket. Correspondence regarding this study can be directed to email@example.com.
1 Star Ratings. http://www.medicare.gov/find-a-plan/staticpages/rating/planrating-help.aspx
2 G. Jacobson et al. How are Seniors Choosing and Changing Health Insurance Plans? Kaiser Family Foundation. May 13, 2014. http://kff.org/medicare/report/how-are-seniors-choosing-and-changing-health-insurance-plans/
4 C. Cole et al. Decision making and brand choice by older consumers. Market Lett DOI 10.1007/s11002-008-9058-x
5 N. Joseph. Brand and price are important for health insurance. Researchscape. July 22, 2013. http://www.researchscape.com/finance/health-insurance-brand-loyalty-survey
6 More than Four in Five Americans Say Brand is Important when Selecting a Health Insurance Plan. Harris Interactive. June 20, 2013. http://www.harrisinteractive.com/NewsRoom/HarrisPolls/tabid/447/mid/1508/articleId/1217/ctl/ReadCustom%20Default/Default.aspx
7 Online Streaming Entertainment Providers are Rapidly Building Brand Equity, According to the 2014 Harris Poll EquiTrend Study. Harris Interactive. March 12, 2014. http://www.harrisinteractive.com/NewsRoom/PressReleases/tabid/446/mid/1506/articleId/1395/ctl/ReadCustom%20Default/Default.aspx
8 About Blue Cross Blue Shield Association.
9 M. Gold et al. Medicare Advantage 2014 Spotlight: Enrollment Market Update. Kaiser Family Foundation. May 1, 2014. http://kff.org/report-section/medicare-advantage-2014-spotlight-enrollment-market-update-firms-and-market-structure/
10 Notice of Immediate Imposition of Intermediate Sanctions for Medicare Advantage-Prescription Drug and Prescription Drug Plan Contract Numbers: H3923, H3962, and S8067. HHS. May 28, 2014. http://www.cms.gov/Medicare/Compliance-and-Audits/Part-C-and-Part-D-Compliance-and-Audits/Downloads/Capital-Blue-Cross-Sanction-05_28_14.pdf
11 “When CMS issues marketing and/or enrollment sanctions, the contract’s Plan Rating is automatically reduced to 2.5 stars regardless of how it performs with respect to the individual measures that are used to calculate a contract’s summary score.” T. Carnegie and R. Albert. Medicare Star Ratings – What Plan Sponsors Need to Know. Bloomberg BNA. November 30, 2012. http://www.bna.com
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