The feds are set to pay out at least $13.4 billion in Medicare quality bonus payments this year, up slightly year over year and reflecting a rapid escalation in spending over the past decade, a new report shows.
Spending on quality payments was $12.7 billion in 2025, according to a new analysis from KFF. The 2026 estimate, however, is more than four times the $3 billion paid out in 2015, the researchers said.
About two-thirds (68%) of MA enrollees are in a plan that qualifies for a bonus payment, according to the report. That's down from 75% in 2025, and makes for the lowest number since 2018.
The quality bonus payments are tied to the Centers for Medicare & Medicaid Services' annual star ratings program, with contracts earning four or more stars securing the additional payments. Critics have called for either ending or augmenting the program, and the Congressional Budget Office estimated in 2018 that eliminating the quality bonus payments would save the feds almost $100 billion over a decade.
The KFF researchers note that the Medicare Advantage program has only grown since that CBO analysis. There are currently 35 million people enrolled in MA, 5 million higher than CBO estimated in the 2018 report, per KFF.
"Given the sharp increase in both actual and projected Medicare Advantage enrollment since CBO’s analysis, the savings from eliminating the quality bonus program could be substantially higher," the researchers wrote.
Earlier this year, CMS finalized changes to the star ratings that will take effect in 2027, but the KFF researchers said it's not likely to lead to a spending decrease. Based on those changes, MA spending will likely rise by $18.6 billion over the subsequent decade.
The report also examines quality bonus payments between different Medicare Advantage organizations. UnitedHealth Group, for instance, is set to receive $3.9 billion, or 29% of payouts under the quality bonus program. However, the insurer accounts for 26% of Medicare Advantage enrollees.
Humana, which covers about 20% of enrollees, is projected to receive a smaller share of payments in 2026, totaling $1.5 billion, or about 11% of total spending. Humana saw a significant drop off in its average star rating score in 2025, and that has had a major impact on its bonus payments.
The largest increase in payments per enrollee was at Kaiser Permanente, which has a consistent streak of high star ratings each year. Kaiser Permanente Health Plans is projected to see a $577 increase in per-enrollee payments for 2026, as virtually all of its members are in plans with at least four stars.