“Quality measurement only works when the methodology is accurate,” Dawn Maroney, president of Alignment Health and chief executive of Alignment Health Plan, said as the company announced that its California Medicare Advantage HMO had slipped to 3.5 stars for 2027. Alignment says it will litigate the measures behind the rating. The statement came in an October 8 release issued the same evening that CMS published its Star Ratings.
The contract is H3815, and it is the only one of Alignment’s seven eligible contracts to land below four stars. The other six earned four stars or higher, and three of them reached 4.5, according to the company, with the strong results in Arizona, California, Nevada, North Carolina and Texas. A filing with the Securities and Exchange Commission the same day says the California HMO had four stars for the 2026 rating year.
For members of the California HMO, the question is whether a half-star drop, from 4.0 to 3.5, and a legal fight that has not started yet should change what they do before open enrollment ends on December 7. A lawsuit takes far longer than that, so anyone deciding for 2027 has to decide on the rating as it stands.
Members of Alignment’s California HMO have until December 7 to decide whether 3.5 stars should change their plan, and no court ruling is coming in that time. The 2027 Medicare Open Enrollment Decision Kit includes a cost calculator spreadsheet that compares plans on cost, drugs and doctors, so the choice rests on the member’s own pharmacy and doctor list.
Set Alignment’s California HMO beside other 2027 plans in the Decision Kit’s cost calculator →
One contract that carries most of the company
The size of the problem comes from the filing, not the news release. Alignment told the SEC in a Form 8-K that H3815 “serves approximately 75%” of its health plan membership. The same filing says about 50 percent of the company’s membership joined within the last two years, a sign of how quickly the company has grown.
The filing, signed by Chief Legal and Administrative Officer Christopher Joyce, says the 2027 results will affect the company’s quality bonus payments for fiscal year 2028, and that Alignment expects its provider risk-sharing arrangements to offset part of the hit. It also says the results are not expected to affect revenue for fiscal 2026 or 2027. CMS’s own 2027 Star Ratings fact sheet confirms the connection: the ratings feed Medicare Advantage quality bonus payments, with the 2027 ratings counting toward 2028.
What Alignment has promised to do, and what it has not
Maroney said the company will pursue all available administrative remedies and “litigate the measures and methodologies we believe warrant review.” She said the 3.5-star rating “does not accurately reflect the contract’s longstanding performance” and that the current framework “has drifted too far” from measuring quality, outcomes and member experience. The 8-K is more specific about the legal route, saying Alignment expects to commence litigation challenging certain Star Ratings measures and methodologies that it believes conflict with applicable law and CMS’s statutory authority.
Neither document says a suit has been filed, names a court or lists the measures in dispute. The statements describe an intention. Alignment says its strategy “remains unchanged” and that it is confident it can return the California HMO to at least four stars.
How 3.5 stars compares with the rest of the market
A 3.5 is not the bottom of the scale. CMS rated 508 Medicare Advantage drug-plan contracts for 2027, with an enrollment-weighted average of 3.99, and about 71 percent of enrollees are in contracts at four stars or above. Alignment’s California HMO sits under that average without being flagged: CMS’s low-performing icon went to four other contracts, and H3815 is not among them.
That distinction affects switching rights. Medicare.gov’s special enrollment page lists a switch available at any time for people in a plan with a rating below three stars for the last three years, and a separate once-a-year switch into a five-star plan between December 8 and November 30. A plan at 3.5 stars does not meet the below-three-stars test and is not rated five stars, so for its members the ordinary window, October 15 to December 7, is the main opportunity to change plans for 2027.
What the rating does and does not tell a member
Star Ratings summarize up to 43 measures for a Medicare Advantage plan with drug coverage, according to CMS. For 2027 the agency added two Part D safety measures and raised the weight on the physical and mental health improvement measures from one to three. Alignment argues that the current framework no longer consistently reflects quality, outcomes and member experiences, and it names the measures and methodologies as the target of its challenge.
A rating does not say whether a specific doctor is in a plan’s network or what a specific drug costs. Members who are happy with their care and cost are weighing a quality score against an experience they already know.
Deciding on the California HMO before December 7
The company’s own release is the free starting point for what Alignment says about H3815, and CMS’s fact sheet holds the rating itself. For comparison shopping, the Medicare Plan Finder shows the 2027 plans open to a given ZIP code with their ratings, premiums and drug costs.
Before comparing, members should gather the current list of prescriptions with doses, every doctor and specialist they see, and the plan’s out-of-pocket maximum. A member who stays should review the plan’s 2027 benefits and network before the deadline. A member who leaves should line up the new plan before December 7, because later changes are limited to specific enrollment windows.
The lawsuit, if it comes, will play out well past that date. The numbers a member can act on now are 3.5 stars, 75 percent of the company, and a December 7 deadline.
December 7 decides the plan, whatever the lawsuit does
Alignment says it will sue over H3815’s 3.5 stars, and that case will not be settled before open enrollment closes on December 7. The 2027 Medicare Open Enrollment Decision Kit gives members a prescription-by-plan comparison and a cost calculator spreadsheet that compares plans on cost, drugs and doctors, so staying or leaving is decided on paper by the deadline.
Put the Alignment HMO decision on paper with the Decision Kit’s prescription comparison →
This article was produced with AI assistance and reviewed by The Financial Wire’s editorial team.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
