Obamacare’s star ratings offer a glimmer of insight ― but not for all

Reviewed by James Ives, M.Psych. (Editor)Nov 1 2019

As millions of Americans start shopping Friday for individual health insurance for 2020, they will see federal ratings comparing the quality of health plans on the Affordable Care Act's insurance marketplaces.

But Christina Rinehart of Moberly, Mo., who has bought coverage on the federal insurance exchange for several years, won't be swayed by the new five-star rating system.

That's because only one insurer sells on the exchange where the 50-year-old former public school kitchen manager lives in central Missouri. Anthem Blue Cross Blue Shield in Missouri was not ranked by the Centers for Medicare & Medicaid Services.

"I'm pleased with the service I get with that and the coverage I have," she said, noting she focuses on cost and whether her medications and checkups are covered.

Rinehart's case illustrates one reason why the star ratings are unlikely to play a big role in people's decision-making for the first year of the national rollout. Nearly a third of health plans on the federal exchanges don't yet have a quality rating — including all the plans in Iowa, Kansas and Nebraska. Only one insurer is available in nearly a quarter of counties across the U.S. And consumers may not find the information behind the star ratings valuable without additional details, insurance experts say.

Across Missouri, Cigna is the only one of seven insurers to get ratings. The others have not yet been in the marketplace for the three years needed to merit a score.

Missouri is one of eight states that don't have any health plans that earned at least three stars. The others are Iowa, Kansas, Nebraska, Nevada, New Mexico, West Virginia and Wyoming. States with the most three-star or higher health plans are New York (12), Michigan (10), Pennsylvania (9), Massachusetts (8) and California (7).

The star ratings are largely new to the federal exchanges, which operate in 39 states. About 80% of plans in the federal marketplaces earned three or more stars overall, CMS said. Only 1% earned five stars.

The new federal star ratings are based on three main areas: evaluations of the plans' administration, such as customer service; clinical measures that include how often the plans provide preventive screenings; and surveys of members' perception of their plan and its doctors.

Ratings can be viewed at healthcare.gov, where consumers review plans' benefits and prices. Open enrollment runs from Friday through Dec. 15 for the federal exchange states, though enrollment lasts longer in the District of Columbia and most of the 11 states that operate their own marketplaces.

Last year, about 11.4 million people bought coverage on all the exchanges, with more than 80% getting federal subsidies to lower their premiums.

The good news for consumers is premium prices on the federal exchanges are dropping by about 4% on average for 2020.

And consumers generally will have a wider array of choices as more companies enter the markets. Nationally, the average number of health plan choices per customer has risen from 26 to 38, according to Joshua Peck, co-founder of Get America Covered, a nonprofit that helps people enroll and find coverage. Missouri, for example, will have 28 plans from its seven insurers, he said, up from 14 this past year.

Jodi Ray, who runs Florida's largest patient navigator program as director of Florida Covering Kids & Families at the University of South Florida, is skeptical consumers will use the new ratings. Instead, she said, they will likely focus first on whether their doctor is on the plan, if their medications are covered, the size of the deductible and the monthly costs.

"The star ratings may fall out the door at that point," she said.

Many of the states that operate their own exchanges have already offered quality ratings, which were required under the ACA. California's insurance exchange has been providing quality ratings for several years, though it's unclear how much weight consumers give them.

"They have a limited effect on consumers but have a significant effect on health plans," said Peter Lee, executive director of Covered California, the state's insurance exchange. "It does tip health plans to focus on what they can do to improve care, and I think that is a positive effect."

Kaiser Permanente (which is not affiliated with Kaiser Health News) is the only insurer in the California exchange to garner the maximum five stars, Lee said. It also has the most enrollment of any plan in the state's exchange. But, he noted, the plan has a lower share of the enrollment in Southern California partly because its prices are higher compared with rival insurers, indicating low cost may trump high rankings in attracting enrollees.

"It's good news that nationally the federal marketplace is putting quality data out there for consumers," Lee said. Still, he added, customers would want to see the specific criteria that matter to them, such as how well plans care for patients with diabetes. Currently, that data is not immediately accessible for consumers at healthcare.gov.

Consumers tend to stick with their insurer even when prices and benefits change, said Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation, the nation's largest public health philanthropy. "People think changing health insurance plans is a huge pain and they don't know if things will get better or worse." But, she added, "people respond to consumer ratings and reviews."

The federal government already uses star ratings to help consumers choose a Medicare Advantage plan as well as compare hospitals. It began testing the exchange ratings in a handful of states over the past two years.

Heather Korbulic, executive director of the Nevada health exchange, worries the ratings could be steered by a relatively small number of member surveys. "It's such a narrow sample," she said, noting one plan's rating was partly based on just 200 member reviews.

Even though many counties have only one insurer in 2020 - most of them rural areas or clustered in the Southeast - the number of enrollees with access to just one insurer is falling to 12% next year from 20% now.

States that have not expanded Medicaid see premiums that are 7% higher than states that have, according to a 2016 study from the U.S. Department of Health and Human Services.

"If you look at Arkansas, they've got nice competition in their marketplace, but they've also expanded Medicaid," Watson said. "We look a lot like Mississippi, which is struggling to get insurance in rural counties."

That leaves people, like Rinehart, stuck with one insurer.

Rinehart remains loyal to Anthem particularly after it helped her get care and deal with the costs of suffering four heart attacks in 24 hours nearly three years ago. She's thrilled Anthem's prices are down slightly for 2020.

"I wasn't able to afford insurance before [the Affordable Care Act]," she said, "so it was a blessing to have."