Sixty-eight percent of Medicare Advantage (MA) enrollees sit in a plan eligible for a quality bonus payment in 2026, down from 75 percent in 2025 and the lowest share since 2018, according to a KFF analysis updated August 12.
The number of MA contracts rated four stars or higher fell from 261 to 209. Federal spending on the quality bonus program (QBP) went the other direction, rising to at least $13.4 billion in 2026 from $12.7 billion in 2025. MedPAC puts the risk-adjusted increase to benchmarks nearer $16 billion. Roughly 24 million of the 35 million people enrolled in MA are in a bonus-eligible plan this year, down from about 26 million.
Read those two lines together and the story gets clearer. A smaller group of contracts is dividing a larger pool of money.
Where the dollars concentrate
Firm share does not track enrollment share. UnitedHealth Group collects $3.9 billion, or 29 percent of all bonus spending, on 26 percent of MA enrollment. Humana holds the second largest enrollment share at 20 percent and collects $1.5 billion, or 11 percent of bonus dollars. The gap between those two positions is the clearest illustration of what star performance is worth at scale.
Per-enrollee payments span a factor of 25. Kaiser Foundation Health Plans receives $577 per enrollee. Centene receives $23. Every other national and regional plan falls somewhere between, and the distance between those two figures is a better benchmark for internal conversations than any average.
Plan type moves the number too. Employer and union-sponsored plans see a per-enrollee increase of $466, individual plans $381, and special needs plans $318.
The recalculation added about $600 million
After the Clover Health court decision and the CMS recalculation of 2026 star ratings, KFF estimates QBP payments will run about $600 million higher in 2027. The largest beneficiaries are UnitedHealth Group, Clover Health, Blue Cross Blue Shield of Alabama, Humana, and CVS Health.
Note the order. A ruling won by one plan reset payment for the whole market, and the largest single beneficiary is the market leader, not the litigant. Contract-level star ratings litigation produces industry-wide payment effects, which is worth remembering when the next case reaches a decision.
Removing measures raises spending
The CY2027 final rule drops several administrative measures beginning with the 2029 star ratings. KFF scores the change as increasing Medicare spending by $18.6 billion over 10 years.
The mechanism is straightforward once you sit with it. A leaner measure set gives more contracts a path across the four-star line, more contracts clearing the line means more bonus-eligible enrollment, and more bonus-eligible enrollment means a bigger pool. Simplification widens the program rather than trimming it. Anyone treating measure removal as a cost-control move has the direction backward.
What this means for health plans
The 68 percent figure is the number to carry into budget conversations. Bonus dollars fund supplemental benefits, and supplemental benefits drive enrollment, so a contract falling below four stars feels the effect in its bid and in its AEP positioning at the same time.
For plans currently outside the bonus, the arithmetic is more encouraging than the headline suggests. The measure removals arriving with the 2029 star ratings widen the entry point, and measurement year 2027 has not started. Plans have a full planning cycle to identify where marginal quality investment still moves a rating and to reallocate toward it. The contracts regaining ground are the ones treating the measure set as a portfolio with weights rather than a list of targets.
For plans already above four stars, the pressure runs the opposite way. A wider entry point means more competitors sharing the same pool and less separation at the top. Holding a rating is about to require the effort that earning it did.
The September operational sequence
No new rule landed this week. Plans are inside the HPMS star ratings preview window now, and the calendar tightens from here. Contracts execute August 31. The 2027 plan files publish in mid-to-late September. ANOC letters reach members by September 30. Marketing opens October 1. Ratings post to medicare.gov in early October. AEP starts October 15.
Pending star ratings litigation deadlines fall inside that same sequence, which is why a September ruling would be so disruptive. There is no slack in the calendar to absorb a recalculation once ANOC letters are in the mail.
Questions to consider
- Where does your per-enrollee bonus payment sit against the $23 to $577 range, and what explains your position?
- If your contract lost bonus eligibility for 2026, what portion of your supplemental benefit budget was funded by those dollars, and what replaces them in the 2028 bid?
- Have you modeled your rating under the 2029 measure set, where administrative measures come out and the remaining measures carry more weight?
- More contracts will clear four stars once the leaner set takes effect. What separates you from the plans arriving behind you?
- Does your legal and finance team have a plan for a star ratings ruling landing between ANOC delivery and the start of AEP?
RISE will work through cut point projections, the leaner measure set, and the payment effects of star ratings litigation at The RISE Star Ratings Master Class, December 14-16, at the Fairmont Scottsdale Princess in Scottsdale, Arizona.