The share of Medicare Advantage enrollees in plans that qualified for federal quality bonus payments dropped to 68% in 2026, its lowest point since 2018, according to a KFF analysis published July 1.
Five things to know:
1. The drop in bonus-eligible enrollment stems from CMS raising the performance thresholds plans must clear to earn higher star ratings. The number of MA contracts achieving at least a four-star rating fell to 209 in 2026 from 261 the prior year. As a result, 26 million enrollees were in bonus-eligible plans in 2025 compared to roughly 24 million in 2026.
2. Federal spending on the quality bonus program totaled $13.4 billion in 2026, up from $12.7 billion in 2025 and more than four times the $3 billion spent in 2015. Total bonus spending equals 2.3% of the $574 billion in projected MA payments for the year.
3. Group employer- and union-sponsored MA plans account for 16% of total MA enrollment but 20% of quality bonus program spending. Their average bonus per enrollee is $466, compared to $381 for individual plans and $318 for special needs plans. Limited data on the benefits and costs of employer and union plans makes it difficult to determine whether the higher qualifying rates reflect stronger coverage or other factors, according to KFF.
4. Special needs plans have consistently posted lower star ratings than other plan types, translating to the lowest average bonus per enrollee at $318. KFF flagged the gap as a concern given that these plans serve the highest-need enrollees.
5. CMS finalized changes to the star rating methodology in April (effective for 2029 ratings based on 2027 plan year performance) that remove several administrative and low-differentiation measures from the calculation. The agency projects the change will increase MA spending by $18.6 billion over 10 years because more plans are expected to qualify for bonus payments under the new criteria. Separately, following a successful lawsuit from Clover Health, CMS recalculated 2026 star ratings for all plans, with rating increases taking effect for the 2027 payment year.
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