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Survey: Administration Eats 12% Of Commercial Health Premiums

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NU Online News Service, Aug. 22, 2003, 1:13 p.m. EDT – Publicly traded U.S. health insurers spend about 12% of their premium revenue for insured commercial health plans on administration, according to the Sherlock Company, Gwynedd, Pa.

Administration charges average $21.92 per insured commercial member per month, the company estimates.

Administrative expenses amount to 7.16% of premium revenue for Medicare managed care plans and 12.21% for insured indemnity and preferred provider plans, Sherlock adds.

The results come from a report the company has prepared on health insurance company administrative expenses.