Medicare Will Spend More Than $13 Billion on the Medicare Advantage Quality Bonus Program in 2026

(Authors: Jeannie Fuglesten Biniek, Nancy Ochieng, and Meredith Freed for The Kaiser Family Foundation Published: Jul 1, 2026)

The Medicare Advantage quality bonus program, established by the Affordable Care Act, increases Medicare payments to Medicare Advantage plans that qualify by having a star rating of 4 or above (on a five-star rating system). (See the KFF brief on Medicare Advantage payments for more detail.) Plans may, but are not required to, use the increase in payments to cover the cost of supplemental benefits, including reduced cost sharing, extra benefits not covered by traditional Medicare (e.g., vision, hearing and dental), lowering Part B premiums, and/or subsidizing Part D prescription drug coverage. The star ratings are intended to help consumers make informed decisions when choosing among Medicare Advantage plans and the potential for additional funding is intended to encourage plans to improve quality. However, the Medicare Payment Advisory Commission (MedPAC) and others have suggested that the star ratings incorporate too many measures, do not adequately account for social risk factors, and may not be a useful indicator of quality because star ratings are reported at the contract rather than the plan level. Medicare Advantage contracts typically include multiple plans, which may have different benefits, costs, networks, service areas, and enroll different populations (i.e., plans that are open for general enrollment and special needs plans that limit enrollment to dual-eligible individuals). Continue reading here…

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