Medicaid Plans Growth Slows in Core Expenses in 2021

Core per member administrative expenses in Medicaid-focused plans grew by 2.6% in 2021, decelerating from 2020s increase of 5.8%.

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Business Wire, Inc.Business Wire, Inc.
Retrieved on: 
Tuesday, October 11, 2022
Information
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Finance, Consulting, Banking, Professional Services, Public Policy, Government, Healthcare Reform, Health Insurance, Other Health, General Health, Health, Sherlock, Benchmark, Growth, Independent, CHIP, Medicare, Financial management, Acceleration, Solution, Health insurance, Medicaid
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UNITED STATES, NORTH AMERICA, PENNSYLVANIA
Summary
Key Points: 
  • Core per member administrative expenses in Medicaid-focused plans grew by 2.6% in 2021, decelerating from 2020s increase of 5.8%.
  • All clusters of expenses posted slower growth compared to last year with the largest deceleration in Account and Membership Administration.
  • Core compensation and outsourcing increased in 2021, while Medicaid staffing ratios and non-labor expenses were lower.
  • Besides the Medicaid-focused universe, other universes include Blue Cross Blue Shield Plans, Independent / Provider Sponsored plans, Medicare plans, and Larger Plans.


“Core” per member administrative expenses in Medicaid-focused plans grew by 2.6% in 2021, decelerating from 2020’s increase of 5.8%. Core expenses exclude the plans’ Sales and Marketing expense clusters.

All clusters of expenses posted slower growth compared to last year with the largest deceleration in Account and Membership Administration. These comparisons are of continuously reporting plans and eliminate the effects of product mix changes between comparison years.

Core compensation and outsourcing increased in 2021, while Medicaid staffing ratios and non-labor expenses were lower.

These results are excerpted from the Medicaid Plans edition of the 2022 Sherlock Benchmarks.

Fourteen plans were surveyed for this analysis. On average, 59% of members and 46% of revenues were in Medicaid HMO and CHIP. The Benchmarks reflect the results of 8.1 million Medicaid HMO members. Including plans from other Sherlock universes but mentioned in the study, this participation equates to an estimated 15% of Medicaid HMO beneficiaries. The results are published in Plan Management Navigator and are posted here. This Navigator excerpts from the 2022 Medicaid edition of the Sherlock Benchmarks.

We will discuss the results via free web conference on Thursday, October 13, from 2:00 PM to 2:45 PM Eastern Daylight Time. Douglas Sherlock will offer a 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 Medicaid-focused universe, other universes include Blue Cross Blue Shield Plans, Independent / Provider – Sponsored plans, Medicare 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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Copyright Business Wire 2022