Carriers & the market
Alignment Healthcare Files Federal Lawsuit Challenging Its 2027 Medicare Advantage Star Ratings
The California-based insurer argues CMS set rating methodologies through internal technical notes rather than formal rulemaking, and is asking a D.C. court to vacate its scores before the 2028 selling season.
By the Goodsurance editorial teamOctober 13, 2026
Alignment Healthcare filed a complaint in U.S. District Court in Washington, D.C., on October 9, 2026, asking a federal judge to overturn the 2027 Medicare Advantage star ratings CMS assigned to its California health plan contract, known as H3815. The filing came one day after CMS published the official 2027 scores on October 8.
The core argument is that CMS established key rating methodologies through internal technical notes rather than the formal notice-and-comment rulemaking process that federal administrative law requires. Alignment contends the agency has departed from Congress's intent for the star system to rely on consistent, stable, publicly vetted measures.
Alignment Healthcare is asking a federal court to throw out its 2027 Medicare Advantage star scores, saying CMS bypassed required rulemaking to set the grading rules.
The practical stakes for Alignment are significant. H3815, which covers roughly 75 percent of the company's membership, received a 3.5-star rating for 2027, down from 4.0 stars the previous year. The share of Alignment's approximately 240,000 members in plans rated four stars or above fell from 98 percent in 2026 to 25 percent in 2027. Plans must reach four stars to qualify for federal quality-bonus payments, which are paid two years after the rating cycle.
The case is part of a broader wave of insurer challenges to CMS's star methodology. Earlier in 2026, a Georgia federal judge sided with Clover Health and vacated 20 measures used in the 2026 star calculations, finding that CMS exceeded its authority and relied on an improper process.
Alignment is asking the court to vacate its 2027 ratings and order CMS to recalculate them under a lawful process before the 2028 Medicare Advantage selling season begins.
Medicare's annual enrollment period for 2027 coverage runs October 15 through December 7, 2026.
In plain words
Alignment Healthcare is an insurance company with about 240,000 Medicare members in five states. Medicare grades insurance plans every year using a star rating system. A plan needs at least four stars to get extra money from the government.
In 2026, almost all Alignment members were in plans with four or five stars. In 2027, Medicare lowered Alignment's main plan from four stars to three and a half stars. Now far fewer Alignment members are in highly rated plans.
Alignment says Medicare did not follow the right rules when it set up the grading system. The company asked a federal judge in Washington, D.C., to throw out the 2027 scores and give it new ones.
Another company called Clover Health won a similar court case earlier this year. Alignment hopes a judge will decide the same way.
You can compare Medicare plans during open enrollment, which runs October 15 through December 7, 2026.
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Source: Healthcare Dive
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