Ratings Methodology for Medicare Advantage

Our writers and editors evaluate thousands of Medicare Advantage plans to find the best based on cost, quality and customer satisfaction.

25 Companies reviewed

4,488 Medicare plans compared

195,368 Data points analyzed

5.0

Overall score

The best Medicare Advantage plans have affordable premiums and out-of-pocket costs. To evaluate premiums, we compare each company’s percentage of $0-premium plans and the average cost of plans with monthly premiums. To compare out-of-pocket costs for prescription drugs, we analyze companies’ $0-deductible formulary tiers, $0-copay/coinsurance formulary tiers, and estimated costs for prescription drugs at formulary Tier 1 through Tier 3. We also compare each company’s maximum out-of-pocket spending cap (MOOP).

Member experience (35%)

The best Medicare Advantage plans make it easy to use the plan’s coverage to get care and services. We give the highest weight in this category to Centers for Medicare & Medicaid Services (CMS) measures in Domain 3 - Member Experience with Health Plan. These measures include ratings for members’ ability to get needed care, timeliness of care, customer service, care coordination and members’ ratings of their plans and the care provided. We also compare plans’ complaint rates and problems reported by members who choose to leave plans.

Quality (30%)

The best Medicare Advantage plans deliver quality care and help members manage their health conditions. Our quality scores are based primarily on CMS’ overall ratings for Medicare Advantage plans, which include 33 measures for health plans’ performance and 12 additional measures for plans that include prescription drug coverage. We also incorporate third-party health plan accreditation by the National Committee for Quality Assurance (NCQA).

Data collection and review process

We reviewed 25 Medicare Advantage brands covering about 87% of all Medicare Advantage beneficiaries in the United States. In some cases, one parent company has multiple brands under its umbrella. (For example, we review both UnitedHealthcare and Peoples Health, a UnitedHealthcare subsidiary.)

At the national level, NerdWallet’s reviews include each of the 10 largest brands by enrollment. At the state level, our research includes at least one major insurer in every state where Medicare Advantage plans are sold, and includes the top two insurers in 40 of those 49 states. (Alaska doesn't offer Medicare Advantage plans.)

We also look at online search volume to identify regional and other notable players in the space.

We collect data points for each Medicare Advantage company from its public-facing websites, plan materials, company representatives, public filings and regulator data. These data points are then compared against one another and against NerdWallet’s standards for good health insurance companies to determine a star rating.

Data is collected on a regular basis and reviewed by our editorial team for consistency and accuracy. Final star ratings are presented on a scale of 1 to 5 stars, where a 1-star score represents "poor" and a 5-star score represents "excellent." Ratings are curved and rounded to the nearest tenth of a star.

What our star ratings mean

5.0

EXCEPTIONAL

Companies with 5 stars are exceptional, with low premiums, competitive out-of-pocket costs, good quality ratings and happy members.

4.5

EXCELLENT

Companies in the 4.5 star range are excellent, but might trail leaders' performance on one or two factors.

GOOD

Companies with around 4 stars are strong performers that might not be as well rounded as higher-rated competitors.

3.5 stars or fewer

LESS COMPETITIVE

Companies with 3.5 stars or fewer could do better in certain criteria, like pricing and customer complaints.

Information updates

Our writers and editors review insurance companies on at least an annual basis and make additional updates throughout the year as necessary. We maintain contact with companies and monitor public data and regulatory filings to keep information current.

Factor evaluation

Cost metrics (35%)

$0-premium plans. We collect premium data for all commercially available Medicare Advantage plans from CMS’ Landscape files, which are updated at least annually. Companies are scored based on the proportion of their plans that have $0 premiums.

Average premiums. We compare companies’ average monthly premiums for Medicare Advantage plans using Landscape file data. These calculations consider only plans with premiums, since we score the proportion of $0-premium plans separately. Companies with lower monthly premiums earn higher scores.

Average maximum out-of-pocket spending cap (MOOP). We also compare companies’ caps on out-of-pocket costs based on Landscape file data. Companies with lower maximum out-of-pocket costs get higher scores.

$0-deductible formulary tiers. We collect data about prescription drug coverage from CMS’ Prescription Drug Plan Formulary and Pharmacy Network Information files. Using beneficiary cost data, we calculate the average number of formulary tiers with no prescription drug deductible for each company. Companies with more $0-deductible tiers get better scores.

$0-copay/coinsurance formulary tiers. We also evaluate plans’ formulary tiers with $0 copays for prescription drugs. Companies earn points by offering more $0-copay options.

Average out-of-pocket costs for prescription drugs. We compare estimated out-of-pocket costs for prescription drugs on formulary tiers 1 through 3. To compare both copays and coinsurance, we use reference prices of $15 for Tier 1, $50 for Tier 2, and $200 for Tier 3. Companies with lower out-of-pocket costs get higher scores.

Member experience metrics (35%)

CMS member experience ratings. We compare companies’ performance on the “Member Experience” domain for CMS star ratings. That domain’s measures include: Getting Needed Care, Getting Appointments and Care Quickly, Customer Service, Rating of Health Care Quality, Rating of Health Plan and Care Coordination. We analyze each company’s average rating across these measures to calculate a member experience score.

Complaint rate. We compare each company’s complaint rates, measured as the number of complaints per 1,000 members from CMS’ Star Ratings measure data. Companies with lower complaint rates get higher scores.

Disenrollment survey data. CMS surveys members who voluntarily disenroll from Medicare Advantage plans about problems that led them to leave. We evaluate survey data included with CMS’ Star Ratings data tables to calculate an index based on the overall prevalence of problems identified by disenrolling members from each company. Companies with a lower disenrollment index get higher scores.

Quality metrics (30%)

Overall CMS rating. The main factor we consider for Medicare Advantage plans’ quality is the top-level star rating from CMS. For plans that include prescription drug coverage, we use the overall star rating, which includes both health plan and prescription drug measures. For plans without prescription drug coverage, we use the Part C summary rating. We calculate company-level averages, weighted by enrollment, and give more points to companies with higher scores.

NCQA accreditation. We consider third-party health plan quality accreditation from the National Committee for Quality Assurance (NCQA). Companies get more points when a higher proportion of their Medicare Advantage plans are accredited.

The review team

The writers and editors behind our Medicare Advantage reviews are insurance specialists who have had their work featured by or appear in The Associated Press, The Washington Post, USA Today, ABC News, Yahoo Finance, Nasdaq and MarketWatch. Each writer and editor follows NerdWallet’s strict guidelines for editorial integrity.

In addition to Medicare Advantage, the team also covers Medicare Supplement Insurance, Medicare Part D, other insurance products and additional subjects related to healthcare and personal finance.