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The Star Treatment: Estimating the Impact of Star Ratings on Medicare Advantage Enrollments

The Star Treatment: Estimating the Impact of Star Ratings on Medicare Advantage Enrollments <p>The Centers for Medicare and Medicaid Services (CMS) has calculated and disseminated an overall contract quality star rating system (from one to five stars) for all Medicare Advantage (MA) contracts since 2009. In this paper, we study the effect of CMS-reported star ratings on MA plan enrollment. We formulate a discrete choice demand model for differentiated MA plans and estimate the model with market-level plan enrollment data. We identify separate enrollment effects for each star level using a regression discontinuity research design that exploits plausibly random variation around star thresholds. The results suggest that the 2009 published star ratings directed beneficiaries away from low-rated plans more than actively toward high-rated plans. When we repeat the analysis for 2010 published quality stars, we find no significant effects. We present suggestive evidence that supply-side responses to the star rating system may explain the one-time enrollment response to CMS-published quality stars.</p> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resources University of Wisconsin Press

The Star Treatment: Estimating the Impact of Star Ratings on Medicare Advantage Enrollments

Journal of Human Resources , Volume 50 (4) – Oct 30, 2015

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Publisher
University of Wisconsin Press
Copyright
©by the Board of Regents of the University of Wisconsin System
ISSN
1548-8004

Abstract

<p>The Centers for Medicare and Medicaid Services (CMS) has calculated and disseminated an overall contract quality star rating system (from one to five stars) for all Medicare Advantage (MA) contracts since 2009. In this paper, we study the effect of CMS-reported star ratings on MA plan enrollment. We formulate a discrete choice demand model for differentiated MA plans and estimate the model with market-level plan enrollment data. We identify separate enrollment effects for each star level using a regression discontinuity research design that exploits plausibly random variation around star thresholds. The results suggest that the 2009 published star ratings directed beneficiaries away from low-rated plans more than actively toward high-rated plans. When we repeat the analysis for 2010 published quality stars, we find no significant effects. We present suggestive evidence that supply-side responses to the star rating system may explain the one-time enrollment response to CMS-published quality stars.</p>

Journal

Journal of Human ResourcesUniversity of Wisconsin Press

Published: Oct 30, 2015

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