Medicare

Federal Medicare Advantage bonus payments will total at least $12.7 billion in 2025, or $372 per enrollee on average. That is similar to 2023 and more than four times higher than in 2015. Since 2015, Medicare has spent at least $87 billion on quality bonus program payments.

The average bonus payment per enrollee is highest for employer- and union-sponsored Medicare Advantage plans ($438) and lowest for special needs plans ($332), raising questions about the implications of the quality bonus program for high-need beneficiaries.

Part of a recent executive order from President Trump directs the Secretary of HHS to work with Congress to implement a change in the Medicare Drug Price Negotiation Program to delay negotiation of so-called “small molecule” drugs beyond 7 years after FDA approval under current law.

If that timeframe had already been in place, more than half of the Part D drugs that were selected for price negotiation in the first or second rounds – 13 out of 25 – would not have been eligible at the time drugs were selected.

Medicare Advantage, the private plan alternative to traditional Medicare, covers nearly 33 million beneficiaries, or 54%, of the eligible Medicare population. A new analysis finds that the average Medicare beneficiary can choose among 34 Medicare Advantage plans with prescription drug coverage (MA-PDs), two fewer than last year, and among plans offered by eight firms. About 5% of current Medicare Advantage enrollees in individual MA-PDs are in a plan that has been terminated for 2025.

A companion analysis, Medicare Advantage 2025 Spotlight: A First Look at Plan Premiums and Benefits, provides an overview of premiums and benefits in Medicare Advantage plans for 2025, and key trends over time.