Medicare to spend $13.4Bn on MA quality bonuses in 2026: KFF
CALIFORNIA, UNITED STATES — Medicare will pay out $13.4 billion in quality bonuses to Medicare Advantage (MA) plans in 2026 — four times the program’s 2015 cost — even as fewer plans now qualify.
A KFF analysis raises pointed questions about whether the program’s ballooning price tag tracks actual improvements in care.
Fewer plans qualify for bonus payments
Medicare’s quality bonus program (QBP) rewards MA plans that achieve four or more stars in CMS ratings with supplemental benefit funding. In 2026, just 209 contracts reached that threshold, down from 261 in 2025.
As a result, 24 million people — 68% of MA enrollees — are enrolled in qualifying plans, the lowest share since 2018 and a drop from 75% last year.
According to KFF, the QBP “represents 2.3% of total projected Medicare Advantage payments of $574 billion in 2026,” with the Medicare Payment Advisory Commission (MedPAC) estimating actual spending could reach approximately $16 billion once risk score adjustments are factored in.
The $13.4 billion total is up from $12.7 billion in 2025 and has quadrupled from $3 billion in 2015. CMS finalized star rating changes effective 2029 that remove several administrative measures — a reform projected to add $18.6 billion in MA spending over the next decade, because more plans are expected to qualify for bonuses under looser criteria.
Bonus spending concentrates among top insurers
The program’s dollars skew toward the largest carriers. UnitedHealth Group, covering 26% of MA enrollees, claims 29% of all quality bonus payments — $3.9 billion in 2026.
Humana receives $1.5 billion. Kaiser Foundation Health Plans earn the highest per-enrollee bonus at $577, while Centene receives just $23 per enrollee.
KFF notes that MedPAC and other analysts have persistently questioned whether the star rating system incorporates too many measures, fails to adequately account for social risk factors, and is reported at the contract level rather than the individual plan level.
A 2018 Congressional Budget Office (CBO) estimate found that eliminating the quality bonus program would lower federal spending by nearly $100 billion over a decade — a figure that has only grown more relevant as outlays have continued to climb.
For healthcare outsourcing providers, the MA quality bonus program creates a high-stakes operational environment around star rating performance.
Revenue cycle management (RCM) firms, offshore coding specialists, and care coordination teams all work within the measures that determine plan qualification — from chronic condition management documentation to patient satisfaction data collection.
Outsourcing partners that support HEDIS measure abstraction, quality reporting workflows, and risk adjustment coding are directly tied to the financial outcomes the QBP produces. As bonus payments grow and plan competition tightens, star rating operations become a core function — not a back-office one.
