Administrative Costs for Medicare Plans Increase Slightly in 2021

In 2021, administrative expenses for Medicare plans increased by 0.6% per member compared to a 5.6% increase in 2020. This trend is based on continuously reporting plans and eliminates the effect of product mix differences between comparison years. Median PMPM costs were $46.69, and $111.15 for MA.

The results are published in Plan Management Navigator and are posted at sherlockco.com/navigator. Navigator excerpts from the 2022 Medicare edition of the Sherlock Benchmarks. That edition of the Sherlock Benchmarks analyzes the results of in-depth surveys of 10 Medicare-focused plans serving 1.6 million members in Medicare Advantage and Medicare SNP plans who together served 12.3 million members in Comprehensive Products. A median of 34% of revenues were in Medicare Advantage and SNP combined. Comparisons with other universes’ Medicare products are also included, so that 8% of all MA members are reflected here, or 18% of the MA members excluding those in the five largest providers.

In March 2022, members in Medicare Advantage plans accounted for 46% of Medicare-eligible beneficiaries, up from 43% in 2021 and 13% in 2005.

We will discuss the results via free web conference on Thursday, September 15^th, from 2:00 PM to 3:00 PM Eastern Daylight Time. Douglas Sherlock will offer a brief presentation, followed by questions and answers. To participate in the web conference, please register at sherlockco.com/webinar. Once registered, dial-in information and a link to connect will be provided in a confirmation email.

This operating environment has been challenging for health plans. The Sherlock Benchmarks can assist in adapting to it by helping to optimize expenses. Planning, budgeting and cost benefit analyses are credibly informed by the Sherlock Benchmarks.

Sherlock Benchmarks reflect 963 health plan years spanning 25 years. They are the “gold standard” of health plan cost benchmarks and are used to measure and manage administrative activities in health plans serving over 210 million members.

Besides the Medicare-focused universe, other universes include Blue Cross Blue Shield Plans, Independent / Provider – Sponsored plans, Medicaid plans, and Larger Plans. Collectively, the 34 participating plans serve 63 million people.

Sherlock Company (www.sherlockco.com), based in Gwynedd Valley, Pennsylvania, provides informed solutions for health plan financial management. Since its founding in 1987, Sherlock Company has been known for its impartiality and technical competence in service to its clients.

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