Picture this—only 42% of Medicare Advantage plans with prescription drug coverage scored four or five stars in 2025, plummeting from 68% just three years earlier.
This dramatic decline has been threatening the financial stability and competitive positioning of health plans nationwide. As a result, most health plans will not receive the Excellent Health Outcomes for All (EHO4All) reward factor that rewards plans for reducing disparities in care among members with social risk factors.
Heading into 2026, administrators everywhere are hungry for effective ways to improve star ratings while managing costs and member satisfaction. Traditional wellness solutions often fall flat, leaving organizations frustrated with lackluster engagement and minimal impact on quality measures.
However, wellness platforms with integrated reward systems are emerging as the unsung heroes for plans looking to improve their Star Ratings. Unlike traditional wellness approaches that rely on education and awareness, rewards-based programs drive member engagement through immediate financial incentives that inspire healthier lifestyles, generate long-term cost savings, improve satisfaction and member retention, strengthen compliance with CMS measures, and ultimately impact the metrics that matter most.
Let's take a closer look at why rewards-based wellness platforms outperform traditional approaches for improving quality ratings, and how organizations can use these solutions to drive HRA completion, boost preventive care participation, and proactively manage chronic diseases among at-risk populations.
The financial ramifications of quality ratings have reached unprecedented levels, with bonus payments totaling at least $11.80 billion in 2024. These stakes continue to escalate as CMS will be implementing stricter performance standards.
Star ratings directly influence a plan's financial health through both bonus eligibility and rebate percentages. The rebate structure clearly favors high-performing plans:
These enhanced rebates enable plans to offer additional benefits that strengthen member retention. The financial impact is substantial—improving from a 3-star to 4-Star rating could increase revenue between 13.4% and 17.6% through combined enrollment growth and bonus payments.
CMS is fundamentally restructuring measurement priorities for 2026 Star Ratings. The weight of patient experience measures will decrease from 4 to 2, while HEDIS measures gain prominence—becoming the highest-weighted category for 2027.
Three new measures are also entering the mix—Kidney Health Evaluation for Patients with Diabetes, Improving or Maintaining Physical Health, and Improving or Maintaining Mental Health. These additions reflect CMS's focus on outcomes-based care rather than process measures.
As a result, the Health Equity Index has evolved into "Excellent Health Outcomes for All" (EHO4All), specifically designed to reward plans that achieve strong outcomes for underserved populations. This signals CMS's continuing commitment to addressing disparities in healthcare delivery—and creates new opportunities for plans that can effectively serve diverse populations.
Rather than reinvent the wheel with new solutions for improving quality ratings, what if the real solution has been hiding in plain sight?
Financial incentives have emerged as powerful catalysts for behavioral change in healthcare settings. Well-designed incentive programs effectively improve health behaviors in 73% of cases, demonstrating their superior effectiveness over traditional wellness approaches.
The logic behind most traditional wellness solutions often looks like convincing someone to save for retirement when their rent is due tomorrow.
Behavioral economics reveals the fundamental flaw—people are "present biased," meaning they prioritize immediate benefits over future health outcomes. This explains why standard educational approaches yield limited results—participants simply can't connect distant health benefits to their current reality.
Rewards provide the immediate gratification needed to overcome this psychological barrier. Individuals respond more strongly to immediate rewards rather than delayed benefits, making incentive programs particularly effective for populations facing multiple competing priorities.
But rewards alone don't tell the complete story. Engaging elements like point-based systems, progress visuals, and achievement levels amplify engagement beyond what simple rewards alone can achieve.
These mechanisms tap into intrinsic motivation through elements of competition, collaboration, and visual progress tracking.
For Medicare Advantage plans, this translates into measurably higher completion rates for essential preventive services:
Wellness platforms with integrated rewards systems represent the most direct path to improving quality ratings. Data-driven platforms that integrate rewards systematically outperform traditional engagement approaches across key quality metrics—but building the right platform requires strategic thinking about member experience, communication channels, and vendor partnerships.
Modern wellness platforms simplify health assessment completion through intuitive digital interfaces that feel as natural as checking your phone. Members use smart devices to verify activities—such as medication adherence or appointment attendance—as easily as sending a text, removing friction points that traditionally derail engagement.
But the real magic happens when platforms automatically track member activities and instantly award incentives, creating immediate positive reinforcement that keeps participants coming back. Plans can precisely curate which activities to incentivize based on specific quality goals, turning every health action into a rewarding experience.
Less than 25% of Medicaid members have accurate contact information on file. Multi-channel outreach becomes your lifeline for reaching members where they actually are.
Impactful platforms segment personalized communications across text messaging, email, physical mail, and phone calls—creating multiple touchpoints that increase chances of meaningful connection.
This targeted approach allows plans to reach members or groups through their preferred channels at optimal times. For younger populations, texts prove particularly effective—over half of consumers want messaging capabilities with healthcare organizations, with that number even higher for those aged 18-34.
When Medicaid managed care procurements often exceed billions of dollars annually, choosing the right wellness platform vendor becomes a make-or-break decision.
Smart MCOs evaluate potential partners using these essential criteria:
The best vendor relationships feel like true partnerships—where platform providers are as invested in quality rating success as you are. When implemented thoughtfully, these platforms directly address care gaps that impact quality ratings while driving improved outcomes and reducing costs.
The truth is, even the most engaging reward-driven wellness platform means nothing if it doesn't meet federal and state compliance requirements.
For health plans, effective compliance strategies don't just mitigate legal risks—they actually enhance program effectiveness among diverse populations.
Federal guidelines strictly prohibit cash rewards or cash equivalents, including general-purpose debit cards and unrestricted Amazon gift cards.
The good news? Plenty of effective incentives remain permissible:
State agencies typically implement incentive programs through Section 1115 demonstration waivers, alternative benefit plans, or grant funding mechanisms. During program design, rewards must be identically offered to all qualifying individuals who complete the target activity.
Without an inclusive design, even compliant programs fall flat. For low-tech populations, impactful approaches focus on removing barriers, not adding complexity.
Materials must accommodate various education levels and cultural backgrounds. It’s essential to address transportation barriers to sessions, meals, or childcare to maximize participation. Simple benefit structures prevent confusion, as complex multi-step incentives often discourage participation.
Health equity integration into rewards programs directly impacts quality ratings through the "Excellent Health Outcomes for All" measure. Programs best positioned for success in the new year will address social determinants by incorporating social needs assessments into health risk assessments.
When wellness platforms are configured with compliant, equitable rewards, plans get their most direct path toward improving quality ratings while actually serving their members' needs. In particular, tailored rewards are best designed to address real-world challenges—for example, vouchers for food insecurity or rideshare credits for transportation barriers.
Reward-based wellness platforms represent the most effective solution to improve 2026 Star Ratings. While traditional wellness approaches rely on education and reactive intervention, rewards systems address the fundamental behavioral economics driving real change—people prioritize immediate benefits over future health outcomes.
Health plans face a reality where fewer plans qualify for the crucial 5% payment boost associated with 4+ stars—those falling below this threshold must either reduce supplemental benefits or increase premiums, ultimately affecting member satisfaction and retention. But rewards are quickly outperforming conventional approaches, with well-designed incentive programs effectively improving health behaviors in nearly three-quarters of cases.
Modern wellness platforms make participation, verification, and accessibility effortless. Thoughtfully designed rewards can help overcome common social factors affecting health outcomes, directly impacting the "Excellent Health Outcomes for All" measure in quality ratings—a critical component for 2026 success.
Curious how to transform platforms from cost centers into quality rating powerhouses? Reach out to our experts today for a detailed walkthrough, full assessment of your current portfolio, and hands-on guidance for success in 2026.