Medicare Plan Admin. Cost Growth Accelerate to Modest Rates in 2022

PHILADELPHIA–(BUSINESS WIRE)–In 2022, Medicare plans’ costs increased by 1.9% per member compared an increase of 0.6% in 2021. These comparisons are of continuously reporting plans after eliminating the effect of product mix differences between comparison years. Median PMPM costs for Medicare Advantage were $115.84.

The results are published in Plan Management Navigator and are posted at Navigator excerpts from the 2023 Medicare edition of Sherlock Benchmarks. This edition analyzes and reports on the in-depth surveys of 11 Medicare plans that collectively served 1.7 million members. Medicare and SNP composed an average of 30% of revenues for these plans. Excluding the five largest Medicare Advantage providers, Sherlock Benchmarks for Medicare include the results health plans serving of 16.4% of Medicare Advantage members.

While the total administrative cost increase was greater than 2021, the growth was second lowest since 2016. It also compares with Blue and IPS growth in 2022 of 7.2% and 7.4% respectively.

Growth in every cluster of expenses accelerated, with Sales and Marketing PMPM costs increasing by 10.5%, the fastest in at least the last five years. Every function in that cluster, except Marketing, grew faster than any of the prior three years. Advertising growth was especially sharp.

We will discuss the results via free web conference on Wednesday, September 13th 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 Once registered, dial-in information and a link to connect will be provided in a confirmation email.

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 reflect 1,000 health plan years of experience spanning 26 consecutive years. They are the “gold standard” of benchmarks and 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.

Besides the Medicare universe, others include Blue Cross Blue Shield plans, Independent/Provider-Sponsored plans and Medicaid plans.

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.


Douglas B. Sherlock, CFA