PHILADELPHIA, PA — Administrative costs for Medicare Advantage (MA) plans grew at a slower pace in 2024, increasing 3.6% per member compared with 6.2% the previous year, according to new data from Sherlock Company’s Plan Management Navigator.
When accounting for shifts in product portfolios that favored Medicare Advantage, overall administrative cost growth reached 6.4%, up from 5.2% in 2023. The median per-member-per-month (PMPM) cost for MA plans was $140.02.
The report noted that while most administrative functions experienced slower growth or declines, the Account and Membership Administration cluster accelerated sharply — up 12.5% in 2024 on an as-reported basis, compared with 6.4% in 2023. Holding product mix constant, this category rose 6.8%, versus 5.1% the year prior. Staffing ratios fell even as compensation and non-labor expenses increased.
Sherlock Company attributed the trend to growing demand for Medicare Advantage, paired with ongoing revenue and benefit cost pressures across the sector. The analysis draws from the firm’s 2025 Medicare Plan Edition of the Sherlock Benchmarks, based on surveys of 11 Medicare-focused health plans serving a high share of MA members, excluding the five largest national carriers.
The benchmarks, regarded as a long-standing industry standard, provide detailed metrics on administrative costs and operational performance. “Health plans use the Sherlock Benchmarks to determine whether their administrative costs are optimal and to prioritize improvements among numerous specific activities,” the company stated.
Now in its 28th year, the Sherlock Benchmarks encompass more than 1,000 health plan years of experience. Benchmark participants collectively serve 58 million Americans across Blue Cross Blue Shield, Medicare, and Medicaid plans, with users of the benchmarks representing over 180 million members since June 2022.
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