When a plan’s Star Rating quietly changed because of the current litigation, keep it simple with clients: focus on their network, drugs, and costs first, explain that Star Ratings are a CMS quality signal (not a guarantee of their experience), and use the rating shown in the official Medicare Plan Finder on the day you enroll them. Stay factual and don’t editorialize about the lawsuits.
Here’s the thing — you’ve probably seen the headlines by now. The Medicare Star Ratings, the same numbers we’ve all leaned on for years, are getting dragged through federal court. Clover Health won a challenge. CMS recalculated a bunch of ratings. Then Elevance sued. Then SCAN sued. And analysts are quietly using the word “floodgates.”
If you’re feeling a little unsettled about walking into AEP 2027 with all of this swirling around, that’s normal. But you don’t need to be an attorney or a policy wonk to handle it well. You just need a calm, honest way to talk to clients. Let’s walk through what actually happened, what’s settled versus what’s still up in the air, and what you should genuinely say when a client asks, “Why does this plan’s rating look different than it did before?”
What actually happened with the Clover Star Ratings ruling?
The short version: earlier in 2026, Clover Health won a federal court challenge to how CMS calculated its Star Ratings, and CMS ended up bumping Clover’s 2026 rating from 3.5 Stars to 4.5 Stars.
Here’s what the court took issue with. The judge ruled that CMS had improperly included 20 measures in the calculation — partly a statutory issue (whether CMS had the authority to include them the way it did) and partly a process issue under the Administrative Procedure Act, or APA, which basically governs whether a federal agency followed proper notice-and-comment procedures before making a rule.
So this wasn’t a case of “Clover deserved a higher score because their care got better.” It was a case of “CMS’s method for building the score had legal problems.” That distinction matters, because it’s why the ripple effects didn’t stop with one insurer.
Why did so many other plan ratings change too?
After the Clover ruling, CMS didn’t just fix one contract — it applied a broader recalculation to many 2026 contract ratings using a “better of” approach.
If you’ve been around for the Tukey outlier changes a couple of years back, this will feel familiar. CMS essentially used a hold-harmless method: it recalculated ratings and let contracts keep whichever result was better. No contract got dropped because of the recalculation — some ratings simply rose. That’s why you may have noticed certain plans showing a higher displayed rating than they had before, seemingly out of nowhere.
For agents, the practical takeaway is that a mid-cycle rating change isn’t automatically a red flag or a sign something went wrong with a plan. In a lot of cases, it’s a downstream effect of this legal and methodological cleanup.
Why are Elevance and SCAN suing CMS now?
In early July 2026, Elevance and SCAN Health Plan both filed suits against CMS with a similar core argument — that CMS didn’t fully apply the measure list the way the Clover judge ordered.
Elevance’s claim is that CMS used a different set of measures than the court directed, and that the difference cost the company roughly $115 million in lost quality bonus payments. SCAN filed on a similar theory, pointing to around 10 measures it argues should be removed from the calculation.
You don’t need to take a side here, and honestly, you shouldn’t. The important thing to understand is the pattern: one insurer won on a methodology argument, CMS recalculated, and now other insurers are saying, “You didn’t apply that fix consistently to us.” That’s the disagreement driving the current wave.
Is this “the floodgates” — and does it change the whole program?
A lot of experts think more insurers will sue, and some healthcare policy analysts are openly saying the Star Ratings program is under real uncertainty until a higher court weighs in or Congress steps in.
But here’s the part to keep in front of your mind, especially heading into client conversations: lawsuits and proposals are not law. A single district court ruling can get appealed. A proposed rule can get changed or scrapped. Until an appeals court settles the methodology question or Congress acts, we’re in a contested-but-not-rewritten zone.
It’s also worth separating two different things that are easy to blur together. There’s the litigation track — the Clover ruling and the follow-on suits. And then there’s a separate, planned effort: CMS has proposed simplifying the Star Ratings system starting in 2029, including removing certain measures. That 2029 proposal is its own policy conversation, not a result of the lawsuits. Don’t let a client (or another agent) conflate the two.
What do the latest numbers actually say about Star Ratings?
The quality picture has tightened, and the data backs that up. According to a KFF report from July 1, 2026, 68% of Medicare Advantage enrollees are now in bonus-eligible plans — the lowest share since 2018 and down from 75%.
A few numbers worth keeping in your back pocket:
- Only about 207 to 209 contracts hit 4+ Stars in 2026, down from 261 the year before.
- Total quality bonus program spending still rose to $13.4 billion, up from $12.7 billion in 2025.
- The share of enrollees in bonus-eligible plans dropped to 68% from 75%.
That combination — fewer high-rated contracts, but higher total bonus spending — is part of why this program is drawing so much scrutiny right now. It also means some clients may genuinely be looking at a plan whose rating shifted, so having accurate, current numbers matters more than usual this cycle.
How do these lawsuits change what agents actually do during AEP 2027?
Practically? Less than you might fear — as long as you tighten up a few habits. The lawsuits are a compliance and communication issue for you, not a reason to change your recommendation philosophy.
Here’s the playbook I’d run:
- Know the current displayed rating and any recalculated rating for the plans you present, so nothing surprises you on a call.
- Anchor the conversation on client needs — their doctors and network, their prescriptions, and their real out-of-pocket costs — not on Star Rating drama.
- Explain Star Ratings simply. They’re a CMS quality signal, not a promise about how a specific person’s year will go.
- Don’t editorialize about the lawsuits with clients. You’re not there to predict which suit wins.
- Document the Scope of Appointment (SOA) and confirm carrier ready-to-sell exactly like you always would.
- Treat the official Medicare Plan Finder rating as your source of truth on the day of enrollment. If it changed, it changed — enroll off what CMS is officially displaying that day.
None of that is new discipline. It’s just the same fundamentals, held a little tighter during a noisy stretch.
What should you say when a client asks about a plan’s rating?
Keep it plain, keep it honest, and don’t overexplain. You don’t need to teach a client about the APA or name the insurers suing CMS. Here’s a short script you can adapt:
“Great question. Medicare’s Star Ratings are a quality score that CMS puts out each year, and this year some of those ratings were recalculated because of how CMS scored a few measures. It doesn’t change your doctors, your medications, or your costs — those are what we’re focused on. I always go by the official rating shown in Medicare’s Plan Finder on the day we enroll you, so you’re seeing exactly what CMS is publishing right now.”
That’s it. Calm, factual, no drama. If a client pushes for your opinion on the lawsuits, it’s perfectly fine to say, “Those are being sorted out in court, and I don’t speculate on that — I focus on getting your coverage right.” That answer builds more trust than a hot take ever would.
Where does something like TMS fit into moments like this?
Honestly, this is exactly the kind of moment where having real support behind you helps. When the rules get noisy mid-cycle, agents shouldn’t have to piece together what’s going on from scattered headlines. At TMS Insurance Brokerage (Texas Medicare Solutions), a Texas-based FMO with statewide reach, we try to help agents cut through this — through practical training that reflects our broader training philosophy, and through conversations on the Medicare Agent IQ podcast where we break down developments like these into plain English. The goal isn’t to hype anything. It’s to help you walk into every AEP call sounding steady, because you actually are.
That’s the same mindset behind the tools we put in agents’ hands, whether that’s a free Medicare CRM to keep your follow-up tight or straightforward guidance on how to switch FMOs safely if your current one leaves you guessing during weeks like this. Agents across Texas — from El Paso to Houston — are navigating the exact same headlines, and none of us should have to do it alone.
So what’s the bottom line for AEP 2027?
Here’s where it all lands: the Star Ratings program is genuinely contested right now, but your job with clients hasn’t changed. What’s settled is that Clover won its challenge and CMS recalculated many 2026 ratings on a hold-harmless basis. What’s still contested is whether CMS applied that fix consistently — that’s what Elevance, SCAN, and possibly others are fighting over. And what’s separate entirely is the proposed 2029 simplification of the system.
Hold those three buckets apart, lead with client needs, use the official Plan Finder rating on enrollment day, and keep your talking points calm and factual. Do that, and a messy news cycle stays exactly where it belongs — out of your client conversations.
If you’d like a sounding board as this keeps developing, or you just want to see how we support agents through moments like this, we’re always happy to talk it through and let you decide from there.
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