PHILADELPHIA–(BUSINESS WIRE)–Holding product mix constant, Medicare Advantage plans’ per member costs grew by 3.6% in 2024 compared with 6.2% in 2023. A shift in health plan product portfolios to favor Medicare Advantage led to as reported growth of 6.4%, compared with 5.2% in 2023. Median PMPM costs for their Medicare Advantage product was $140.02.
The key Account and Membership Administration cluster of functions sharply accelerated on an as reported basis to 12.5% in 2024, from 6.4% in 2023. Holding constant the mix of products offered by MA focused plans, the increase was far more muted, 6.8% compared with 5.1% in the prior year. All other clusters grew slower or declined. Staffing ratios for MA declined, as compensation and non-labor was higher.
Medicare Advantage administrative expense trend results are in the context of the increasing attractiveness of the product, revenue pressures and health benefit cost pressures.
The results are summarized in Plan Management Navigator, posted at sherlockco.com/navigator. The Navigator draws from the 2025 Medicare Plan edition of the Sherlock Benchmarks. It analyzes and details results from in-depth surveys of 11 Medicare-Focused Plans serving a high share of MA members in health plans excluding the largest five.
We will discuss the results via a free web conference on Thursday, October 2nd, from 3:00 PM to 4:00 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.
The Sherlock Benchmarks are the health plan industry’s “gold standard” metrics of administrative activities, costs and operational drivers. They reflect 28 consecutive years and more than 1,000 health plan years of experience. Health plans use the Sherlock Benchmarks to determine whether their administrative costs are optimal and to prioritize improvements among numerous specific activities. Other applications include informing strategic corporate planning and cost-benefit analyses.
This year, collectively, Benchmark participants serve 58 million Americans in Blue and other universes. Other universes include Blue Cross Blue Shield plans, Medicare plans and Medicaid plans. Health plan users of the Sherlock Benchmarks serve over 180 million members since June 2022.
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.
Contacts
Douglas B. Sherlock, CFA
215-628-2289
[email protected]
