Goodsurance

Medicare Advantage

Court-Ordered Star Rating Recalculation Will Add About 600 Million Dollars to 2027 Medicare Advantage Bonus Payments, KFF Finds

An August 12 KFF update to its quality bonus analysis finds that CMS's voluntary decision to extend a court-mandated star rating fix to all Medicare Advantage plans will push 2027 insurer bonus payments roughly 600 million dollars higher than they would otherwise have been.

By the Goodsurance editorial teamAugust 17, 2026

KFF updated its annual analysis of Medicare Advantage quality bonus payments on August 12, 2026, adding new estimates of the financial effect of a court-driven star rating recalculation on what the federal government will pay insurers in 2027.

Earlier in 2026, a federal court found that CMS used impermissible measures when calculating star ratings for Clover Health, a smaller insurer. CMS initially recalculated only Clover Health's ratings. It then voluntarily extended the same recalculation to all Medicare Advantage plans, assigning each plan the higher of its original or recalculated score. That expansion raised 47 contracts above the four-star threshold that qualifies plans for bonus payments under the quality bonus program.

KFF estimates that the recalculation will add approximately 600 million dollars to 2027 Medicare Advantage quality bonus payments compared with what those payments would have been without the revision. UnitedHealth Group receives the largest share of the additional payments, followed by Clover Health, Blue Cross and Blue Shield of Alabama, Humana, and CVS Health Corporation.

The finding adds to a longer-term pattern the report tracks: total bonus spending keeps rising while the share of plans earning high scores has declined. In 2026, just 209 Medicare Advantage contracts qualified at four stars or above, the lowest count since 2018, down from 261 in 2025. Despite fewer plans qualifying, total bonus spending in 2026 is projected to exceed 13 billion dollars.

CMS finalized changes to the star ratings system earlier in 2026 that removed certain measures and are projected to increase Medicare Advantage payments by approximately 18.6 billion dollars over ten years, a change that drew criticism from researchers who argued the adjustment rewards market scale rather than measurable care quality.

In plain words

Medicare pays Medicare Advantage insurance companies extra money when their plans earn high quality scores. These scores are called star ratings. A court said CMS calculated these scores incorrectly for one company. CMS then re-scored every plan and gave each one the higher of the old score or the new one. A research group called KFF found that this re-scoring will add about 600 million dollars in bonus payments in 2027. UnitedHealth Group gets the biggest share of that extra money. At the same time, fewer plans are earning the high scores needed to get a bonus at all.

Understand the basics first

Source: KFF
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