Medicare will send $13.4 billion in quality bonus payments to Medicare Advantage insurers in 2026, according to an analysis published by KFF, the nonpartisan health policy research organization. That is up from $12.7 billion in 2025 and more than four times the $3.0 billion the program cost a decade earlier, in 2015. The bonuses arrive on top of the roughly $574 billion Medicare already pays private insurers to run Medicare Advantage plans for about 35 million older adults and people with disabilities.
The payments are not evenly split. A handful of large insurers are capturing an outsized share of the growing bonus pool, while companies with lower star ratings collect far less per member. That gap shows up most clearly in how much extra money different insurers receive for each person enrolled in their plans, and in how much of the program’s growth traces back to a small number of companies rather than the industry as a whole.
A Bonus Program That Has Quadrupled Since 2015
The Medicare Advantage quality bonus program pays extra federal dollars to private insurers whose plans earn a high enough star rating from the Centers for Medicare & Medicaid Services. According to the KFF analysis, total spending on the program climbed from $3.0 billion in 2015 to $12.7 billion in 2025 and now $13.4 billion in 2026, a more than fourfold increase over roughly a decade.
The growth has outpaced enrollment in Medicare Advantage itself. Bonus payments are calculated as a percentage of each plan’s benchmark rate, so part of the increase simply reflects rising underlying Medicare costs across the whole Medicare system, not just spending tied to quality. Another part reflects how many insurers are now competing for four- and five-star ratings, since a strong rating pays off directly in federal dollars rather than in any change to what a member pays. Unlike other Medicare payment programs designed to be budget-neutral, the quality bonus program adds new federal money on top of what insurers already receive; it does not shift dollars away from lower-rated plans to fund the bonuses for higher-rated ones.
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How a Four-Star Rating Turns Into Extra Federal Money
The mechanism behind the bonus is CMS’s Star Ratings system, which scores Medicare Advantage contracts on up to 40 quality and performance measures each year, covering everything from preventive screenings to member complaints. A CMS fact sheet confirms that a plan earning at least four out of five stars receives a five percent increase to its benchmark payment rate, the ceiling CMS uses to set how much it pays per enrollee; brand-new plans without an established rating instead get a smaller, 3.5 percent increase.
CMS releases updated star ratings each October, and those ratings determine bonus eligibility for the following payment year. A plan’s rating can shift from one year to the next based on member surveys, clinical outcome data and administrative reviews, which means an insurer’s bonus income can rise or fall sharply even without any change in how many people are enrolled.
UnitedHealth’s $3.9 Billion Share of the Pool
UnitedHealth Group enrolls about 26 percent of everyone in a Medicare Advantage plan nationwide, the largest share held by any single company. Under the quality bonus program, though, the KFF analysis found UnitedHealth is positioned to collect 29 percent of the entire 2026 bonus pool, or $3.9 billion, a larger slice than its enrollment share alone would predict.
The mismatch between enrollment share and bonus share comes down to star ratings, not member count. A company whose plans clear the four-star threshold at a higher rate than its rivals collects proportionally more bonus money per enrollee, regardless of how many members it has nationwide. UnitedHealth’s bonus share running ahead of its enrollment share reflects that its plans, on average, are rated more favorably by CMS than the industry as a whole.
The Gap Between Centene’s $23 and Kaiser’s $577
The clearest illustration of that gap is per-enrollee spending. The KFF analysis found the average bonus-driven increase in payments per enrollee ranges from $23 for people in Centene Corporation plans to $577 for those in Kaiser Foundation Health Plans, a roughly 25-fold difference between the two companies.
Virtually all Kaiser Medicare Advantage enrollees are in a plan that qualifies for a bonus this year. Only about 6 percent of Centene’s Medicare Advantage members are, after a slide in Centene’s star ratings following the coronavirus pandemic. The difference means two people with similar health needs, enrolled in different companies’ plans, can generate very different amounts of federal bonus spending on their behalf, without either one seeing it reflected anywhere on a bill or an enrollment notice.
A Small Slice of a $574 Billion System
As large as $13.4 billion sounds, it is a small fraction of what Medicare spends on the broader Medicare Advantage program. Quality bonus payments account for roughly 2 percent of the approximately $574 billion Medicare expects to pay Medicare Advantage plans in 2026 to cover about 35 million people, more than half of everyone on Medicare. That baseline number is what makes the bonus pool worth watching: it sits on top of a much larger, already-growing budget line, so a small percentage shift in bonus spending can still translate into billions of additional dollars from one year to the next.
The share of those enrollees in a bonus-eligible plan has actually shrunk even as total bonus dollars kept rising. Reporting on the KFF findings shows the portion of Medicare Advantage enrollees in bonus-eligible plans fell from 75 percent in 2025 to 68 percent in 2026, the lowest share since 2018, even as the dollar total climbed higher, a sign that rising Medicare costs elsewhere, not just star ratings, are pushing the bonus pool up.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
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