The Medicare Advantage ecosystem spent two years preparing for one of the most consequential changes to Star Ratings: the Excellent Health Outcomes for All (EHO4All) health equity measure.
Insurers upgraded data systems, redesigned care management, and built extensive operational frameworks to lift equity performance.
Then CMS abruptly signaled that EHO4All may not move forward in 2027 after all.
For an industry that relies on long planning cycles, the reversal has created disruption, frustration, and strategic uncertainty.
This article examines what this decision means for Medicare Advantage, which health plans stand to lose or gain, and why the timing could reshape long-term planning.
1. A Major Policy Reversal at a Critical Moment
EHO4All was intended to reward insurers serving higher proportions of:
- Dual-eligible beneficiaries
- Low-income subsidy members
- Individuals with disabilities
For many insurers, this was the first meaningful attempt to align payment incentives with health equity.
However, CMS also planned to eliminate the Star Ratings reward factor, a long-standing advantage for historically high-performing plans. The combination of removing the reward factor and adding EHO4All created clear industry tension.
By proposing to halt EHO4All, CMS essentially shifts back toward rewarding long-term high performers and away from adjusting for social risk and complexity.
2. Winners and Losers in a Changing Incentive Landscape
According to Baltimore Health Analytics, the reversal produces clear financial and operational consequences.
Plans disadvantaged by EHO4All’s removal included:
- Centene
- Molina Healthcare
- Clover Health
- Scan Group
- Alignment Health
These organizations invested deeply in equity-focused initiatives and serve populations that EHO4All was designed to support.
Plans positioned to benefit from preserving the reward factor include:
- Blue Cross Blue Shield of Michigan
- Highmark Health
- Kaiser Foundation Health Plan
The reinstatement of historical performance advantages strengthens the standing of established, consistently high-scoring plans.
3. The Operational Impact: Two Years of Preparation at Risk
For two years, health plans:
- Enhanced data tracking systems
- Strengthened care management programs
- Built new reporting tools
- Designed enrollment strategies
- Reallocated resources based on predicted EHO4All scoring
Now, with a single proposed regulation, these investments face uncertain value.
Executives have openly acknowledged the disruption.
Many insurers are already deep into planning for the 2027 cycle, making this policy reversal particularly destabilizing.
Some leaders have suggested delaying the cancellation by one year to avoid invalidating work that is already underway.
4. The Financial Stakes: Billions in Potential Shifts
CMS estimated that replacing the reward factor with EHO4All would have reduced bonus payments by 5.1 billion dollars over ten years.
Removing EHO4All and preserving the reward factor produces opposite financial effects:
- Higher spending for Medicare
- Larger bonuses for historically strong performers
- Fewer resources for plans serving high-need, high-risk members
For insurers that invested heavily in addressing social risk, the change represents both lost opportunity and shifting financial footing.
This uncertainty has triggered discussions about potential legal challenges, particularly among plans with large dual-eligible populations.
5. What This Means for Health Equity and the Future of Star Ratings
Despite CMS pausing EHO4All, many plans have stated that their internal equity initiatives will continue.
Organizations such as Highmark Health, Scan Group, and others confirm that mission-driven work will not be reversed.
However, the critical question remains:
Can equity progress truly accelerate when the incentive framework becomes unstable?
This reversal challenges the continuity of equity-focused policy and raises concerns about how CMS will define and reward quality in the coming decade.
Medicare Advantage success requires predictability, and sudden shifts like this create operational and financial uncertainty that affects beneficiaries, providers, and health plans alike.
Final Thoughts
CMS’s decision to halt EHO4All is not simply a policy adjustment.
It is a signal that the long-term direction of Medicare Advantage quality measurement remains in flux.
For plans that built strategic infrastructures around health equity, the proposal represents both a setback and a reminder of how fragile incentive-based reform can be without policy stability.
As the final rule approaches, health plans face a central question:
How do you plan for quality when the metrics themselves are moving targets?
The answer will shape Medicare Advantage strategy for years to come.
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