Newsroom · Sioux Falls

Medicare star ratings for 2027: what changed, and what Sioux Falls should know

CMS quietly rewrote the rulebook behind the number on every Medicare Advantage ad — right before this fall's Annual Enrollment Period.

Big Sioux Benefits Data Desk

Published September 5, 2026 · 15 min read · Sourced from CMS.gov

Medicare is changing what a Medicare Advantage star rating actually measures for 2027, cutting 11 of the program's rating categories after a federal court forced CMS to recalculate part of the 2026 numbers — and the fallout from that fix is still working through the courts as this year's Annual Enrollment Period approaches. None of the five standard Medicare Advantage plans available to anyone with Medicare here in Sioux Falls is a party to that litigation, and none of it changes what those plans actually cover. But it is a useful, timely reminder of something worth knowing before you lean on a star rating to make a decision this fall: the number is a federal regulatory score, built and rebuilt by people, and 2026-2027 is a year it's visibly being rebuilt.

If you've watched a Medicare Advantage commercial this year, you've heard the star rating used as a trust signal — "highly rated," a badge, a reason to call. That pitch works because CMS really does audit these numbers against real clinical and survey data. What the ad won't tell you is that the same number is, this year, tangled up in federal litigation over how it gets calculated in the first place. You don't need to follow the lawsuits to enroll well this fall. You do need to know the rating alone was never the whole story, and this year is a clearer-than-usual reason why.

Every figure below comes from a primary source fetched this week: CMS's own Contract Year 2027 final rule fact sheet, its 2027 Rate Announcement, KFF's own analysis of the Medicare Advantage Quality Bonus Program, Medicare.gov's Open Enrollment page, and the CMS PY2026 plan landscape and star ratings already on file for Minnehaha County. No numbers from memory.

What actually changed for 2027

Start with the plain facts, before the backstory. CMS's Contract Year 2027 Medicare Advantage and Part D final rule, published April 2, 2026, streamlines the Star Ratings measure set by removing 11 measures beginning with the 2027 measurement year — the data collected in 2027 that becomes the "2029 Star Ratings" published in the fall of 2028. Separately, the ratings a beneficiary sees on Medicare.gov this October — called the "2027 Star Ratings" in CMS's own naming convention — reflect 2026 plan performance and are what actually drives your Annual Enrollment Period decision this fall.

The 11 removed measures fall into three groups, per CMS's own accounting:

Source: CMS — Contract Year 2027 Medicare Advantage and Part D Final Rule (Fact Sheet, Apr. 2, 2026).

CMS's stated reasoning is that these 11 measures tracked administrative processes and areas where, in the agency's own words, "beneficiaries cannot distinguish performance between plans" because nearly every plan already scored the same on them — so keeping them added noise without adding signal. In their place, CMS is also adding one new measure, Depression Screening and Follow-Up, to strengthen the ratings' coverage of behavioral health — though that measure doesn't show up in a published Star Rating until 2029, since CMS collects a full year of data before scoring it.

One more decision is worth naming because it was genuinely a live question through 2025: CMS is not implementing the "Health Equity Index" reward that had been finalized under the prior administration for 2027. It will instead continue the older "reward factor," which credits a plan for consistently high performance across the measures it's already scored on, rather than a version that specifically credited performance among lower-income and disabled enrollees. Reasonable people can read that decision differently depending on their priorities; either way, it's a real, sourced policy change for 2027, not a rumor.

What a star rating actually measures

A Medicare Advantage or Part D "Overall Star Rating" is CMS's own annual scorecard for a plan, published on a 1-to-5-star scale, built from dozens of individual measures — clinical outcomes, member surveys, complaint rates, drug safety, and (until this rewrite) some administrative process items too. CMS pulls data from three main sources: HEDIS (Healthcare Effectiveness Data and Information Set, clinical-quality data plans report), HOS (the Health Outcomes Survey, sent directly to members), and CAHPS (Consumer Assessment of Healthcare Providers and Systems, a member-experience survey) — plus CMS's own administrative and compliance data.

Each individual measure gets its own 1-to-5 score against a "cut point" CMS sets that year, based on how plans nationally performed; the individual scores are then weighted and averaged into the single Overall Rating you see next to a plan's name on Medicare.gov. A plan needs a full measurement year of data before it can be scored at all — which is exactly why a newly launched contract shows up as "Not enough data" rather than a number, a detail that matters for two of the plans on the Sioux Falls list below.

Source: CMS Star Ratings program structure, as described in CMS's own Part C & D Performance Data materials.

A Medicare Advantage plan that also carries drug coverage (an "MA-PD" plan, which is every standard plan in Minnehaha County) actually gets scored twice under the hood — a Part C rating for medical-side measures and a Part D rating for drug-side measures — then blended into the single Overall Rating displayed on Medicare.gov. Stand-alone Part D drug plans and Medicare Cost plans, including the four Medica Cost plans also sold in Minnehaha County, get their own Part D-only or Cost-plan rating built the same general way, which is why you'll see a comparable star figure attached to plan types that aren't technically Medicare Advantage at all.

Why CMS rewrote the rulebook for 2027

CMS didn't propose cutting 11 measures in a vacuum. In its own November 25, 2025 announcement, the agency framed the change as a deliberate streamlining — refocusing the measure set "on clinical care, outcomes, and patient experience where meaningful performance differences exist across contracts," and away from process and administrative measures where, CMS says, nearly all plans already score similarly. That's a real policy argument, made in public, months before the litigation below forced anyone's hand.

But the timing is not a coincidence, and being straightforward about that is part of giving you the full picture. The proposal followed a stretch of 2025-2026 where the Star Ratings program had already been shaken by a court loss over exactly which measures CMS had the legal authority to include — which is the story in the next section, and the one the trade press has been covering all summer.

The court fight behind the rewrite

Here's the part that turned a technical measure-set update into an active legal fight. Medicare Advantage insurer Clover Health sued CMS over its 2026 Star Ratings, arguing the agency had improperly folded certain measures into its score in a way the underlying statute didn't authorize. A federal court agreed and ordered CMS to recalculate Clover's rating without those measures. On June 17, 2026, CMS went further than the court required: it announced it would voluntarily recalculate 2026 Star Ratings for every Medicare Advantage organization nationwide, using only the data categories Congress actually authorized in the underlying statute — HEDIS, HOS, and CAHPS data.

The catch, and the reason this is still unfolding: CMS said it would only apply the recalculation where it raised a plan's score, and it kept 10 of the contested measures in place for every insurer except Clover. That selective approach is exactly what a fresh round of lawsuits is now challenging. Elevance Health filed suit arguing CMS refused to apply the same fix to its own plans that it gave Clover. SCAN Health Plan and Alignment Healthcare filed related suits shortly after, per Healthcare Dive's reporting on the litigation.

Worth being direct about what this means for a Sioux Falls reader: none of the plans in Minnehaha County's local roster is a party to this litigation, and nothing about your own coverage changes because of it. What it should change is a small amount of trust you place in the star rating as a single, settled fact. It's a real, CMS-audited number — but this year it is also, demonstrably, a number that federal courts and multiple national insurers are actively arguing about.

Why insurers fight this hard: the money

A star rating isn't just a shopper's label — it's directly tied to real federal dollars, which is exactly why insurers litigate over fractions of a star. A Medicare Advantage plan that scores 4 stars or higher qualifies for a federal Quality Bonus Payment (QBP), extra money on top of its base CMS payment, which plans can then use to fund lower premiums or richer supplemental benefits. KFF's own analysis puts total 2026 QBP spending at at least $13.4 billion — up from $12.7 billion in 2025, and more than four times the $3.0 billion spent in 2015.

Source: KFF — Medicare Will Spend More Than $13 Billion on the Medicare Advantage Quality Bonus Program in 2026 (updated Aug. 12, 2026). Figures are total federal Medicare Advantage Quality Bonus Program spending for the labeled payment year.

The 2026 recalculation didn't just settle a lawsuit — it moved money. KFF estimates that because CMS raised some plans' 2026 ratings, federal Medicare Advantage payments under the quality bonus program will run about $600 million higher in 2027 than they would have been without the recalculation. Separately, CMS's own 2027 Rate Announcement projects the broader Star Ratings and quality-bonus system will shift overall 2027 Medicare Advantage payments by roughly -0.03% — a small net figure once every plan's change is netted together, even though the dollars moving underneath it, plan by plan, are anything but small.

None of that $600 million is specific to any single Sioux Falls plan; it reflects the industry-wide effect of the recalculation across every Medicare Advantage organization CMS revisited. The reason it belongs in this article is simpler: it explains, in real dollars, why a fractional star matters enough to national insurers that they'll sue over it — context that's easy to miss if you only ever see the finished 1-to-5-star number on Medicare.gov.

A worked example: where the bonus money actually goes

The mechanism is worth walking through once, because it explains why a plan's extra benefits can move from year to year even when your own health hasn't changed. CMS pays a qualifying 4-star-or-higher plan a bonus on top of its base per-member payment. Federal rules then require the plan to return a set percentage of that bonus to enrollees as extra value — a lower premium, a richer dental or hearing allowance, a bigger over-the-counter card, or reduced cost-sharing. A plan that loses its 4-star status the next year doesn't just lose a badge; it can genuinely lose the funding behind a benefit you liked. That's the real, dollars-and-cents reason a rating change is worth reading closely on your Annual Notice of Change, not just a marketing footnote.

The Sioux Falls plan roster and its stars

Set the national litigation aside for a moment and look at the number that actually applies to you. Minnehaha County has 11 Medicare Advantage (Part C) plans for 2026: 5 standard PPOs open to anyone with Medicare, 4 Dual-Eligible Special Needs Plans (D-SNPs) for people on both Medicare and Medicaid, and 2 Institutional Special Needs Plans (I-SNPs) restricted to nursing-home residents. Here's the full roster with its published star rating, so the "11 plans" figure above isn't a bare number — you can see every plan it's counting.

Source: CMS Medicare Advantage / Part D Landscape (PY2026) & CMS Medicare Advantage & Part D Star Ratings (2026), Minnehaha County, 2026.

Two things jump out, and both are genuinely useful to know before AEP. First, every one of the 5 standard PPOs sits at the exact same 3.5-star rating — a flat field where the rating itself won't help you choose between them; your doctors, your drugs, and your deductible will. Second, the county's highest-rated Medicare plans aren't the ones most people compare: the UnitedHealthcare D-SNPs carry a 4.5-star rating, well above the standard PPOs, though those plans are restricted to people who qualify for both Medicare and Medicaid. The two Institutional Special Needs Plans show no rating at all — not a low score, but literally "not enough data," because CMS hasn't had a full measurement year to score those newer contracts yet.

What a star rating can't tell you

A star rating is real and CMS-audited, but it answers a narrower question than most advertising implies. It tells you how a plan performed, in aggregate, across dozens of clinical, survey, and administrative measures last year. It does not tell you whether your specific doctor is in that plan's network this year, whether your specific drug sits on a favorable formulary tier, or what your specific out-of-pocket maximum would be if you had a bad year health-wise. Two plans can carry an identical rating and still be dramatically different fits for two different people.

• A brand-new plan with "Not enough data" isn't necessarily a bad plan — it just hasn't existed long enough to be scored. Both of Sioux Falls's Institutional Special Needs Plans are in exactly this position for 2026.
• A rating measures the plan's average enrollee, not you specifically. A plan can score well on diabetes-management measures and still have a formulary that's a poor fit for a specific rare condition.
• Ratings can and do change year to year — CMS resets the "cut points" each cycle based on how every plan nationally performed, so a plan can hold flat clinically and still see its star rating move because its peers improved or declined.
• A rating says nothing about whether your plan is being non-renewed or scaling back for next year — a separate risk we cover in full in our 2027 plan non-renewal guide.
• A rating is a national comparison, not a local one. CMS sets its cut points against every Medicare Advantage plan in the country, so a "3.5-star, average" label doesn't mean average for Sioux Falls specifically — it means average against plans in cities with far larger, more competitive Medicare Advantage markets than Minnehaha County's.
• Coordination-only D-SNPs carry their own trade-off. The 4.5-star UnitedHealthcare D-SNPs in the table above score well, but a coordination-only D-SNP relies on Original Medicare and Medicaid to actually pay claims rather than covering everything itself — a structural detail a star rating doesn't surface at all.

None of this is a reason to distrust the number outright — CMS audits it against real clinical and survey data, and a consistently low-rated plan is a genuine warning sign. It's a reason to treat it the way you'd treat a single strong reference on a resume: real information, worth weighing, never the entire hiring decision.

How to actually use the rating this AEP

None of the above means ignore the rating — it means use it as one input, in the right order. Here's a method you can run yourself, in about twenty minutes, before you compare a single premium.

1. Start with your doctors and drugs, not the rating. Confirm your specific physicians and hospital are in a plan's 2027 network, and run your exact medication list against its formulary. A 4-star plan that drops your cardiologist is a worse plan for you than a 3.5-star plan that keeps him.
2. Then check the rating as a tie-breaker, not a first filter. Once you've narrowed to plans that actually cover your doctors and drugs, the star rating is a legitimate way to break a tie between similar options.
3. Read "Not enough data" as neutral, not negative. A new plan without a rating hasn't failed a test — it hasn't taken one yet. Judge it on its actual benefits and network instead.
4. Note the measurement lag. The rating you see this October reflects last year's performance, not necessarily this plan's current leadership, network, or formulary — all of which can change for 2027 regardless of the rating.
5. If you qualify for a D-SNP, look at its rating too. Locally, the D-SNPs rate meaningfully higher than the standard PPOs — worth knowing if you're one of the roughly 40,000 Minnehaha County Medicare beneficiaries who also has Medicaid.

How a local advisor helps with this

Everything above is something you can genuinely work through yourself, and we mean that. Where a conversation with us tends to help is turning a plan's rating, network, and formulary into one plain answer for your specific situation — part of what we call an annual coverage review. We'll pull the current 2026 rating and 2027 network status for any plan you're considering, tell you honestly what a rating change does and doesn't mean for you, and flag it if a different plan we offer in the Sioux Falls area handles your doctors or drugs better.

Big Sioux Benefits is a licensed independent agency here in Sioux Falls, and we don't work for CMS, Medicare, or any single carrier — carriers pay us, not you, so the conversation costs you nothing. We do not offer every plan available in the area; for a full picture of all your options, Medicare.gov, 1-800-MEDICARE, and South Dakota's free SHIINE counseling program can also help.

This is exactly the kind of thing worth double-checking every fall rather than assuming it hasn't changed, since a plan's rating, network, and even its star methodology can all shift between one Annual Enrollment Period and the next — as this year makes unusually clear.

What to watch in October

1. New ratings landing on Medicare.gov — expect them shortly before or right around AEP's October 15 opening, per CMS's usual pattern.
2. Whether your own plan's rating moved — a plan that held 3.5 stars for years can shift once the new, narrower measure set applies, in either direction.
3. Your Annual Notice of Change letter — a rating change often accompanies real benefit or network changes; we walk through reading that letter line by line in our 2027 ANOC guide.
4. The Elevance, SCAN, and Alignment litigation — none of it touches Sioux Falls plans directly, but a ruling could reshape how CMS calculates future ratings nationwide.
5. Whether a 5-star plan ever reaches Minnehaha County. If one does, the year-round 5-star Special Enrollment Period becomes a real local option for the first time — worth knowing about even though it doesn't apply here yet.

How we know all this: Big Sioux Benefits runs every article through a data desk that cross-references CMS's own Contract Year 2027 final rule and Rate Announcement fact sheets, KFF's independent analysis of the Medicare Advantage Quality Bonus Program, Medicare.gov's enrollment-period guidance, and the CMS PY2026 Medicare Advantage and Part D Landscape file for Minnehaha County — built by Strategic AI Architects. Every figure on this page was fetched from its primary source on September 5, 2026 and carries the period it covers. This is education, not legal or medical advice; confirm your own plan's current rating and network with Medicare.gov or a licensed agent. We take no payment from any carrier to feature a plan.