BCBS Costs Accelerated In 2022

The total cost increase is the highest since at least 2015…………….

Administrative Costs Accelerated for Blue Cross Blue Shield Plans in 2022

MyHealthGuide Source: Sherlock, 6/16/2023

PHILADELPHIA — In 2022, Blue Cross Blue Shield Plans’ costs increased by 7.2% per member compared with a decline of 0.4% in 2021. These comparisons are between continuously reporting Plans after eliminate the effect of product mix differences between the comparison years. Median PMPM costs were $45.36.

The results are published in Plan Management Navigator. Navigator excerpts from the 2023 Blue Cross Blue Shield Plan edition of the Sherlock Benchmarks. This edition of the Sherlock Benchmarks analyzes and reports on the in-depth surveys of 17 Blue Plans serving 52.2 million members. Surveyed Plans serve 76% of the members of Blue Cross Blue Shield Plans excluding publicly-traded companies.

Account and Membership expenses surged 8.3% from 1.7% in 2021. The total cost increase is the highest since at least 2015, as is the sharpness of the change in trends for Account and Membership Administration. The fastest growing function was Customer Services, followed by Actuarial. Plan Staffing Ratios increased as did compensation.

Plans’ cost growth reflected changes in their product mix. The growth was the same for as-reported and constant-mix per member costs because commercial diminished as high-cost Medicare Advantage and low-cost Medicaid increased.

Excerpts from Report


Collectively, within the comprehensive products, 78.9% was commercial. Of the commercial members approximately 62.5% were served through self-insurance arrangements.

Percent of premium ratios are calculated on a premium-equivalent basis. That is, in the case of ASO/ASC arrangements, we synthesize a premium by adding to fees the health benefits incurred by the self-insured group. In this way, premium equivalents sum to all of the expenses of health insurance, including profits earned by the health plan, analogous to actual premiums on insured products.

About The Sherlock Benchmarks

The Sherlock Benchmarks are the health plan industry’s metrics informing the management of administrative activities. They are based on surveys of health plans serving 63 million Americans and provide costs and their drivers on key administrative activities. Health plans use them to determine whether their administrative costs are optimal and to prioritize improvements among numerous specific activities.

The Sherlock Benchmarks for 2023 will reflect 1,000 health plan years of experience spanning 26 consecutive years. They are the “gold standard” of benchmarks used to measure and manage health plan administrative activities in health plans serving over 208 million members. Planning, budgeting and cost benefit analyses are informed by the Sherlock Benchmarks.

About Sherlock

Sherlock Company, 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.

Sherlock Company has performed over 140 financial advisory assignments for health plans, we offer the health plan industry’s definitive cost and performance benchmarks, we offer services to telescope your use of the Sherlock Benchmarks and we publish two influential and highly regarded research newsletters. Our performance benchmarks complement our corporate finance activities, and both corporate finance and performance benchmarks inform our published research. Visit sherlockco.com