CounterPunch Exclusives

CounterPunch Exclusives

Medicare Advantage Companies Bank Billions in Bonuses

After stealing hundreds of billions of dollars from taxpayers, insurance companies in the Medicare Advantage program are going to face significant government action. And significant government action, in this case, means that the federal government is going to award an estimated $13 billion to the insurers in bonus payments.

These bonuses are not officially a direct reward for insurance companies exploiting taxpayers, but they are emblematic of a completely broken system.

Quality bonuses in the Medicare Advantage program are meant to reward insurers for providing high-quality plans to seniors and others who qualify for Medicare. The Centers for Medicare & Medicaid Services (CMS) maintains a five-star quality rating system, and the agency awards bonuses for plans that earn at least four out of five stars. As currently structured, this system was created by the Affordable Care Act in 2012.

For 2026, the stars themselves are meant to reflect 43 or 33 measures of clinical quality, patient experience, and administrative performance (there are more measures if the Medicare Advantage plan includes a prescription drug benefit).

However, the Medicare Payment Advisory Commission (MedPAC) has repeatedlyover the years lambasted the quality star program—even calling for its abolishment—due to it being inaccurate, unreliable, and significantly increasing government spending. For example, in March 2026, MedPAC summarized in their report:

An excessive number of measures are assessed, and many administrative and process measures are not reflective of the quality of care and/or experience that plan enrollees can expect to receive.

MedPAC is not alone as several published analyses found that the measures underlying the star ratings do not adequately and meaningfully separate the quality of different plans, and the creation of the quality star system did not improve key quality measures of plans.

To highlight some examples of glaring issues with the quality bonus program: CMS awards bonus payments at the contract level, and insurers can........

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