CVS Health shares tumbled early Friday after the company said a big Medicare Advantage plan took a hit in government quality ratings about a week before a key enrollment window opens for the coverage.
The health care giant said that its Aetna National PPO dropped from 4.5 stars to 3.5 in 2023 ratings, which were released Thursday by the Centers for Medicare and Medicaid Services.
Plans are rated on a scale of 1 to 5, with five representing excellent, according to CMS. The ratings are released annually and reflect the experiences of people enrolled in the plan.
The drop means the plan will no longer be eligible for a CMS quality bonus payment. It also could affect enrollment, since some shoppers factor the ratings into their coverage decision.
The Aetna plan covers all 50 states with nearly 2 million people enrolled, which is more than half of Aetna’s total Medicare Advantage enrollment. Aetna is the health insurance division of CVS Health, which also runs a national drugstore chain and manages prescription drug coverage.
CVS Health said the main reason for the rating drop was a scoring system based on survey results from 976 customers, or well under 1% of the plan’s enrollment.
Medicare Advantage plans are privately run versions of the government’s Medicare program for people who are age 65 and older or have certain disabilities. The annual enrollment window for 2023 plans opens Oct. 15 and runs until Dec. 7.
Shares of CVS Health Corp., which is based in Woonsocket, Rhode Island, were down 4.7%, or $4.65, to $93.93 before markets opened Friday.