Sherlock finds Medicare plan sales and marketing squeeze

The typical health insurer with a big Medicare Advantage operation may have spent about $12 per member per month on sales and marketing in 2014, or about 7.9 percent less than it spent in 2013.

Analysts at Sherlock Company, a health insurance company data firm, have presented that finding in a look at the performance of 10 Medicare Advantage plan issuers that participate in its benchmarking surveys. The participating companies covered about 680,000 of the 16 million people who had Medicare Advantage plan coverage in 2014.

The median Medicare Advantage plan spent a total of about $42 per member per month on all administrative costs in 2014, down 13 percent from the previous year.

Even though the issuers spent less on administrative costs, the share of their administrative budgets that went to sales and marketing actually increased, to 28 percent, from 26 percent.