CVS sees 2024 income hit of $800M-$1B from Medicare Advantage star ratings
May 25, 2023 2:30 PM ETCVS Health Corporation (CVS)UNH, ELV, HUM, ALHCBy: Jonathan Block, SA News Editor12 Comments
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- As a result of just 21% of its Medicare Advantage members being in plans with a star rating of at least four, CVS Health (NYSE:CVS) is projecting it will incur a reduction in 2024 net income $800M-$1B.
- Under the Affordable Care Act, a portion of a MA plan's reimbursement is linked to their star rating. Plans with a rating of four or five stars are eligible for bonus payments.
- CVS (CVS) noted that that as of Dec. 31, 2021, 87% of the company's MA members were in plans with a 2022 star rating of four or higher. The 21% figure is based on 2023 star ratings. The following year's star rating are announced in October of the prior year.
- For the 2024 payment year, only four publicly traded managed care providers -- UnitedHealth Group (UNH), Humana (HUM), Elevance Health (ELV), and Alignment Health (ALHC) -- achieved a score of 4 stars or higher for their largest MA contracts. CVS' (CVS) largest contract score declined to 3.5 from 4.5.