Learn how Medicare Advantage star ratings work in NC, what the Alignment Healthcare CMS lawsuit means, and how to choose the right plan during 2026 Open Enrollment.
Written by the licensed agents at Health Plans of NC, an insurance agency authorized by Blue Cross and Blue Shield of North Carolina (Blue Cross NC).
Medicare Advantage plans in North Carolina are rated on a 1-to-5 star scale by the Centers for Medicare & Medicaid Services (CMS) each year, with 5 stars being the highest.
Star ratings affect your out-of-pocket costs, plan stability, and the bonuses insurers receive—all of which directly shape your coverage.
A recent lawsuit by Alignment Healthcare against CMS — sparked by a rating drop that left only 25% of its members in four-star plans — highlighted how fragile these ratings can be.
North Carolina seniors shopping Medicare Advantage plans should check current star ratings during Open Enrollment (October 15 – December 7) before choosing or renewing a plan.
A lower-rated plan isn't automatically a bad choice, but understanding what the ratings mean helps you make a smarter decision for your health and budget.
Medicare Advantage star ratings are annual scores CMS assigns to private health plans that deliver Medicare benefits. Plans are scored on a 1-to-5-star scale, where 5 stars means excellent quality and 1 star signals poor performance.
CMS evaluates plans across dozens of measures grouped into two broad categories: health outcomes and member experience. These include how well plans manage chronic conditions like diabetes, how quickly members get appointments, how often members rate their plan highly, and how smoothly the plan handles complaints and appeals.
Ratings are released each fall and apply to coverage for the following calendar year. So the ratings published in late 2025 govern plan quality designations for 2026.
Star ratings affect your plan in three concrete ways: insurer bonuses, plan stability, and your ability to switch plans outside of Open Enrollment.
Insurer bonuses. Plans rated 4 stars or higher receive bonus payments from CMS. Insurers typically reinvest these funds in richer benefits—lower copays, expanded dental and vision, gym memberships, or transportation benefits. When a plan drops below 4 stars, those extras can shrink or disappear.
Plan stability. A plan that loses its bonus revenue may exit a county or state, reduce its provider network, or raise premiums. That directly affects North Carolina enrollees who have built relationships with specific doctors and hospitals. Networks operated by major health systems like Atrium Health, Duke Health, UNC Health, and WakeMed can change based on a plan's financial strength.
Special Enrollment Periods. CMS allows members enrolled in a 5-star plan to switch to that plan at any time during the year — not just during Open Enrollment. This is a meaningful advantage for NC seniors whose health needs change mid-year.
Alignment Healthcare sued CMS after the insurer's star ratings fell sharply, leaving only 25% of its members enrolled in plans rated 4 stars or higher.
The company argued that CMS used a flawed methodology to calculate its scores and that the rating drop did not accurately reflect care quality. The case drew national attention because it highlighted a growing tension: star rating formulas are complex, change frequently, and can swing dramatically from year to year — sometimes due to factors outside a plan's direct control, such as updated benchmarks or changes in how survey responses are weighted.
For North Carolina seniors, the takeaway is not that ratings are meaningless — they remain a useful guide — but that a one-year dip in a plan's rating does not always tell the full story. Looking at a plan's rating trend over two or three years gives a more complete picture.
CMS calculates star ratings using a weighted average of individual measure scores. Not every measure carries the same weight.
The measures fall into several domains:
Staying healthy: screenings, tests, and vaccines (for example, colorectal cancer screenings, flu shots)
Managing chronic conditions: controlling blood pressure, blood sugar in diabetic members, and medication adherence
Member experience: scores from the Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey
Member complaints and appeals: how often members file complaints, how quickly appeals are resolved
Drug plan performance (for plans with Part D): medication safety and accuracy of pricing
CMS has also applied a Health Equity Index adjustment in recent years, which rewards plans that reduce disparities in care quality across demographic groups. This adjustment can meaningfully shift a plan's overall rating.
North Carolina has a robust Medicare Advantage market with multiple carriers offering plans across the state's 100 counties. Carriers active in NC include major national insurers and regional plans focused on specific parts of the state.
For 2026, you can look up any Medicare Advantage plan's star rating in your county on the official Medicare Plan Finder at medicare.gov. Each plan's star rating appears alongside its premium, deductible, and covered benefits.
Rather than quoting specific carrier ratings here — which can change annually — we recommend checking medicare.gov directly during Open Enrollment (October 15 – December 7, 2026) to see the most current figures for plans serving your county.
A lower star rating is a caution flag, not an automatic disqualifier. A 3-star plan may still offer excellent coverage in your county, include your preferred doctors, and have lower out-of-pocket costs for your health conditions.
Here is what to weigh alongside the star rating:
Network: Does the plan include your primary care doctor, specialists, and preferred hospital system (for example, Atrium Health, Duke Health, UNC Health, WakeMed, Novant Health, or Vidant Medical Center)?
Drug formulary: Are your current prescriptions covered at a tier that keeps your costs manageable?
Total cost: Compare the monthly premium plus the estimated annual out-of-pocket maximum, not just the premium alone.
Extra benefits: Does the plan offer dental, vision, hearing, or transportation benefits you actually need?
Rating trend: Has the plan been rated 3 stars for three consecutive years, or did it drop from 4 stars due to a one-time measurement issue like the Alignment Healthcare situation?
A 4-star plan with a narrow network that excludes your cardiologist may be a worse fit than a 3-star plan that keeps your full care team intact.
Star ratings influence costs in indirect but real ways. When a plan earns bonus payments from CMS by reaching 4 or 5 stars, it has more revenue to reduce premiums, lower copays, and add supplemental benefits.
When a plan loses those bonuses, it may respond by raising cost-sharing or trimming benefits during the next plan year. This is why a rating drop — like the one at the center of the Alignment Healthcare lawsuit — can ripple out to members through higher costs or reduced extras, even if the underlying care quality is genuinely good.
North Carolina seniors on fixed incomes should pay particular attention to an annual Notice of Change letter, which every Medicare Advantage plan must mail by September 30 each year. That letter will tell you whether your plan's benefits, premiums, or cost-sharing will change for the coming year, regardless of the star rating.
The primary window to enroll in or switch Medicare Advantage plans is the Annual Enrollment Period (AEP), which runs October 15 through December 7 each year. Coverage selected during this window takes effect January 1.
There is also a Medicare Advantage Open Enrollment Period from January 1 through March 31, during which you can switch to a different Medicare Advantage plan or return to Original Medicare once. This window does not allow you to switch from Original Medicare to Medicare Advantage.
If you are newly eligible for Medicare — typically at age 65 — you have a 7-month Initial Enrollment Period centered on your birthday month. Enrolling during this window helps you avoid late enrollment penalties.
Finally, as noted above, if a 5-star plan is available in your county, you can switch to it at any time during the year using a Special Enrollment Period. It's worth checking whether a 5-star plan operates in your North Carolina county if you are unhappy with your current coverage.
Start at Medicare.gov's Plan Finder tool, enter your ZIP code and list of current prescriptions, and compare plans side by side. Use star ratings as a starting point, but evaluate network and drug coverage before deciding.
Working with a licensed Medicare insurance agent familiar with your North Carolina county and its major health systems can save significant time. An agent can cross-reference your specific doctors and medications against plan formularies and networks—something the Plan Finder tool doesn't fully automate.
North Carolina's State Health Insurance Assistance Program (SHIP), called Seniors' Health Insurance Information Program (SHIIP), offers free, unbiased counseling to Medicare beneficiaries. SHIIP counselors are available by calling 1-855-408-1212 and can help you decode star ratings and compare plans at no cost. They understand the nuances of coverage in all 100 North Carolina counties.
The Alignment Healthcare case is part of a broader industry push to reform how CMS calculates Medicare Advantage star ratings. Multiple insurers and industry groups have raised concerns that the current methodology is too volatile and may penalize plans serving higher-risk or lower-income populations.
CMS has acknowledged the complexity and made incremental adjustments over the years, including the Health Equity Index. However, major structural reforms would require regulatory rulemaking or Congressional action, neither of which has been finalized as of October 2026.
For North Carolina seniors, the practical lesson is this: star ratings remain the best standardized quality benchmark available, but they work best as one input among several — not as the single deciding factor when choosing health coverage.
This article is for general information and is not insurance or medical advice. Consult a licensed agent.