Growth in Medicaid “Core” Costs Accelerated in 2020

PHILADELPHIA--(BUSINESS WIRE)--In 2020, “Core” administrative expenses per member for Medicaid plans increased by 5.8%, faster than 4.4% in 2019. Core expenses exclude the Sales and Marketing expense cluster because of the nature of the Medicaid product.

The Corporate Services cluster posted the fastest acceleration of costs, though its growth was less than Account and Membership Administration. These comparisons are of continuously reporting plans and eliminate the effects of product mix changes between comparison years.

Core Medicaid staffing ratios, compensation and outsourcing increased in 2020.

These results are excerpted from the Medicaid Plans edition of the 2021 Sherlock Benchmarks. Eleven plans were surveyed for this analysis. On average, 61% of members and 51% of revenues were in Medicaid HMO and CHIP. The Benchmarks reflect the results of 6.6 million Medicaid HMO members, including plans from other universes. We estimate that this equates to 11% of all Medicaid HMO beneficiaries. The results are published in Plan Management Navigator and are posted at sherlockco.com/navigator. This Navigator excerpts from the 2021 Medicaid edition of the Sherlock Benchmarks.

We will discuss the results via free web conference on Wednesday, October 13, 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.

The 2021 Sherlock Benchmarks analyses collectively includes the results of 36 health plans serving 54 million members. Besides the Medicaid plans universe, others include Blue Cross Blue Shield, Independent / Provider – Sponsored and Medicare plans. The Benchmarks for each of the universes are being released to participants and licensees.

The Sherlock Benchmarks for 2021 reflects 929 health plan years of experience spanning 24 consecutive years. They are the “gold standard” of benchmarks to measure and manage health plan administrative activities in health plans serving approximately 173 million members. Planning, budgeting and cost benefit analyses are credibly informed by the Sherlock Benchmarks.

Sherlock Company (www.sherlockco.com), based in North Wales, 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.