Health plans are set to receive $12.8 billion in Medicare Advantage (MA) quality bonus payments this year, with UnitedHealthcare topping the list at $3.9 billion in bonuses.
UHC and Humana, which together account for the largest share of MA enrollment, will receive 49% of 2023 bonus payments, according to an analysis from KFF. Humana will earn $2.3 billion in bonuses.
However, Kaiser Permanente has the largest number of plans earning bonuses at 99%, according to the report. The healthcare giant will earn $966.8 million in total for an average of $523 per annual enrollee.
Kaiser Permanente enrolls 6% of MA members, according to the analysis.
Centene plans earned the lowest average payout at $251 per enrollee, and 55% of its MA members were enrolled in plans that earned bonuses. The company received $321.6 million in total bonuses.
Cigna was the lowest earner in total tracked by the report, bringing in $247.3 million, but it was also the smallest player at 2% of MA enrollment. It earned $432 per enrollee on average, and 80% of its MA members were enrolled in a plan that earned a bonus.
The KFF analysts noted that bonus payments in the program have increased each year since 2015. This does follow significant growth in MA enrollment, but payments have increased more quickly, they said.
Payments have more than quadrupled in that window, growing from $3 billion in bonuses in 2015. Bonus payouts were up by nearly 30% from 2022 alone, the KFF researchers found.
The number of people enrolled in plans with at least four stars is a key factor in the increasing payouts, according to the report.
"This spending comes at a time when the Medicare program is facing growing fiscal pressures, which are exacerbated by growth in quality bonus program spending," the researchers wrote. "Growth in the quality bonus program is projected to lead to faster growth in Medicare Advantage benchmarks (and corresponding spending) compared to traditional Medicare spending in upcoming years."
Overall, 85% of people enrolled in MA are in a plan that will earn a bonus, according to the report. By comparison, that's up from 75% in 2022 and 80% in 2021.
Bonuses were highest in group employer or union-sponsored MA plans, averaging $460 per enrollee. Payouts were $417 on average for individual plans and $374 in special needs plans.
The analysts said tracking bonus payment trends will be a continued focus as MA enrollment swells.
"Understanding the effects of the quality rating system and associated bonus payments, including the implications for Medicare spending and beneficiary premiums, will be increasingly important as Medicare Advantage enrollment continues to climb," they wrote.