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Blue Cross and Blue Shield companies were much tougher on administrative costs at the self-insured plans they ran in 2024 than at employers' fully insured plans.
Median administrative costs rose just 5% at the self-insured plans, to $35.31 per member per month, and 10.7% at the fully insured plans, to $64.82 per member per month, according to new carrier survey data collected and analyzed by Sherlock Co.
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Sherlock tracks three kinds of plans: health maintenance organizations, point-of-service plans, and a category that includes preferred provider organization plans and the remaining indemnity plans.
In the self-insured market, Blues' administrative revenue increased 7% at the point-of-service plans, 4.9% at the PPO and indemnity plans and just 3.9% at the HMO plans.
In the fully insured market, administration costs rose 12.9% at the PPO and indemnity plans, 12.5% at the POS plans and 9.1% at the HMOs.
Related: Here's what self-funded health plans pay indie carriers for administration
In 2024, self-insured plans covered about 97 million of the 154 million U.S. residents under 65 who participated in employer plans, according to KFF.
The biggest Blue Cross and Blue Shield company in the self-insured plan administration business is Elevance, which is the parent of Blue Cross of California and many other Blue Cross and Blue Shield carriers.
At the employer plans Sherlock tracks, about 61.5% of the enrollees are in self-insured plans.
Administrative costs at employers' self-insured plans amounted to just 6.4% of median premium equivalents in 2024, compared with an average of 9.6% at Medicaid plans, 12.3% at Medicare Advantage plans and 21.2% at Medicare supplement insurance programs.
Administrative costs tend to be low at employer plans because typical employer plan enrollees are relatively healthy and employers' group purchasing strategy holds down distribution expenses, according to Sherlock analysts.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
