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Medicare Advantage (MA) plans are feeling the ripple effects of a changing Star Ratings landscape. Fewer plans are earning 4-5 Stars and more are stuck in the middle without QBP earning potential. The difference between 3.5 and 4 Stars has never mattered more.
While Stars performance can fluctuate from year to year, health plans that stay focused on a solid Stars strategy put themselves in a stronger position to succeed. The same efforts that support long-term quality improvement also help plans improve member health outcomes and control costs—to strengthen financial performance.
Volatility in 2026 Star Performance Signals Uncertainty for Plans
The 2026 Star Ratings tell a clear story of unpredictability. Only 18 MA contracts earned a perfect 5-Star rating this year—up from 7 in 2024 but still far below the 34 seen in 2023. The number of 4.5-Star contracts also declined, dropping from 86 in 2025 to 73 for 2026.
Even more telling, the largest share of plans landed at 3.5 Stars. Roughly 56% of all contracts now sit in this “middle” range—plans that don’t qualify for the Quality Bonus Payment (QBP) but still face pressure to maintain performance and enrollment.
When everyone is crowded in the middle, competition gets tougher and differentiation gets harder.
Focus on the Ultimate Yield of Stars Programming—Cost Management
Star Ratings do more than measure quality. They shape everything from bonus payments and rebate levels to enrollment and reputation.
But when the ratings themselves are unstable, relying solely on Stars performance becomes risky. Bonus payments that once helped fund new benefits or offset rising costs may not materialize—and cost overruns can quickly eat into margins.
That’s why now, more than ever, MA plans need to focus on cost control alongside quality improvement. Reducing avoidable medical spend creates the cushion plans need to stay competitive, even when Stars performance dips.
The Bigger Picture: Rising Costs and Utilization
Healthcare spending keeps climbing across the board.
- In 2023, S. health spending jumped 7.5% to reach $4.9 trillion—nearly $14,600 per person.
- Prior forecasts had called for another 8.2% rise in 2024 and 7.1% in 2025.
- PwC projects an 8.5% medical trend for 2026, with pharmacy costs rising even faster.
Behind those numbers are two big drivers: more people using more services, and higher prices for every service delivered. Hospitals, clinics, and pharmacies are also struggling with inflation, labor shortages, and supply costs—all of which push prices up
With margins already tight and fewer 4-5-Star bonuses available, managing spend alongside quality improvement has become essential to sustaining performance and growth.
Proven Ways to Reduce Costs Through Better Health and Utilization Management
Cutting costs doesn’t have to mean cutting care. In fact, the most sustainable savings often come from helping members stay healthier and avoid preventable events. When plans focus on the right levers—like medication adherence, drug therapy optimization and preventive care—they can lower utilization, improve outcomes and strengthen both quality and financial performance.
1. Improve Medication Adherence
Medication adherence is one of the simplest and most powerful levers for both quality and cost. Yet nearly half of patients don’t take medications as prescribed.
Better adherence leads to fewer complications, hospitalizations and ED visits—and lower costs overall. Some studies show that for Medicare and Low-Income Subsidy (LIS) populations, improved adherence saves money even when drug costs rise.
Nationally, improving adherence could save between $100–$300 billion annually, with some estimates reaching as high as $528 billion.
Strategies include:
- Targeted reminders and outreach to refill medications
- Omnichannel communication to members at-risk of nonadherence (phone, text, digital)
- Behavioral science–based engagement to resolve obstacles to adherence
- Prescriber and pharmacist collaboration
- Addressing SDOH barriers like transportation or cost
- Connecting members to community resources to resolve barriers
2. Resolve Drug Therapy Problems (DTPs)
Medication issues—like incorrect dosing, missed therapies or side effects—are a major cause of avoidable medical spend. Studies show that resolving DTPs can cut total medical costs by $1,200–$1,800 per patient each year through fewer hospitalizations and ER visits.
Strategies include:
- Embedding medication therapy management (MTM) and comprehensive medication reviews (CMRs)
- Enabling pharmacists and clinical teams to collaborate with prescribers on needed changes
- Combining DTP resolution with adherence outreach so members are taking the right medications the right way
3. Encourage Preventive Care and Early Intervention
Preventive care and routine screenings are proven cost-savers. Catching issues like hypertension, high cholesterol or early kidney disease can prevent much bigger problems—and much higher costs—down the road.
Machine learning and predictive analytics make it easier to spot high-risk members who would benefit from extra outreach. One recent analysis found that combining adherence and preventive care outreach reduced hospitalization risk by about 38%.
Strategies include:
- Coordinated care management and health coaching
- Closing preventive care and HEDIS gaps
- Using predictive models to focus outreach where it matters most
Conclusion
Even in a shifting Star Ratings environment, plans that stay focused on proven Stars strategies can drive meaningful results. The added benefit? Those same efforts help improve member health, reduce risk and control costs.
Quality remains vital—and when quality initiatives are designed purposefully, they create a win-win: stronger Stars performance and more sustainable cost management.
By combining adherence improvement, therapy management and preventive strategies, plans can reduce risk, improve health outcomes, contain costs and build resilience for whatever CMS brings next.
AdhereHealth can help! Contact us today to learn more about our proven strategies to improve adherence and health outcomes for reduced costs and better ROI.
Authored by:
Dr. Levi Sanderson, PharmD.
Senior Director of Clinical Solutions, AdhereHealth
