The 2025 Star Ratings reset was not a one-year anomaly. CMS has signaled, through both the Tukey outlier removal and the recalibration of the cut-point methodology, that 4-Star performance will require a meaningfully different operating posture than the one most plans built between 2018 and 2022.
In our recent work with national and regional Medicare Advantage plans, three patterns determine whether a plan recovers or compounds the damage: the integration depth between Stars, risk adjustment and care management; the operating discipline behind member-level intervention prioritization; and the willingness to retire legacy supplemental benefits that no longer move the measures that matter.
Plans that treat 2025 as a budget cycle to absorb will, on our base-case modeling, surrender 140 to 220 basis points of bid margin by 2027. Plans that treat it as an operating-model reset can recover most of it within two bid cycles.