Bonus payments to Medicare Advantage plans will decline by around 8% in 2024 compared to 2023, according to a report from KFF.
The analysis, published Sept. 11, found bonus payments to MA plans will decline by around $1 billion to $11.8 billion in 2024.
Although this was the first decline since 2015, the $11.8 billion in payments will still exceed amounts for every year from 2015 to 2022.
The number of bonus payments will decline because of temporary policies in place during the COVID-19 pandemic increased star ratings for some plans, according to KFF. When the policies ended, some plans took a hit in bonus payments.
CMS pays Medicare Advantage plans bonus payments for achieving a star rating of four or higher.
In 2024, 72% of Medicare Advantage enrollees were in plans receiving bonuses. The number was lower than in 2023, but similar to 2022, when 75% of Medicare Advantage enrollees were in plans receiving bonuses.
Spending on bonus payments has grown faster than enrollment in Medicare Advantage. Enrollment in the program has doubled between 2015 and 2024, while bonus payments have nearly quadrupled.