KFF Examines Medicare Advantage Quality Bonus Payments in 2024
A new KFF analysis finds that federal spending on Medicare Advantage bonus payments will total at least $11.8 billion in 2024, a decrease of $1 billion from last year. The decrease is tied to a decline in Medicare Advantage plan star ratings that followed the expiration of COVID-19 pandemic-era policies. Spending on bonus payments increased by more than 400% between 2015 and 2023 and remains higher in 2024 than every year except 2023.
Bonus payments are highest for employer-sponsored Medicare Advantage plans, which tend to provide health benefits to higher income beneficiaries, and lowest for special needs plans, which enroll higher need and more vulnerable beneficiaries, as well as a larger share of Black and Hispanic beneficiaries, raising questions about the implications for equity.
The new analysis examines trends in bonus payments, enrollment in plans in bonus status, and how these measures vary across plan types and firms.
