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Rating system for Medicare Advantage plans is flawed; changes are planned

Kaiser Health News/Washington Post, June 16, 2010

About 47 million people are in Medicare, the federal health program for the elderly and disabled; nearly a quarter of them are enrolled in Medicare Advantage plans, offered by insurance companies as alternatives to the traditional program. A few years ago, federal officials began rating these plans using a scale of one to five stars. Under the new healthcare overhaul law, the ratings will be used for the first time to award bonuses potentially worth hundreds of millions of dollars to the best plans. If the bonuses had been in effect last year, the top-rated plans would have received a total of $1.3 billion, estimates Brian Biles, a health policy professor at George Washington University.