Jason Shafrin at Healthcare Economist has an intriguing analysis of administrative expense in Medicare v private insurance. My net is that Medicare is less costly from an admin expense perspective than private insurance, but not as “less” as I thought.
This is where blogs really excel – making us rethink “common knowledge” and question our assumptions…
Aug
10
Joe – I was wondering if you could provide some insight into how much large employers who self-insure and have total annual medical spend of $100 million or more (including employee contributions toward the premium, deductibles and copays) pay insurers for Administrative Services Only (ASO) contracts as a percentage of total annual spend. Also, are there any other costs that should be considered administrative that we should take into account?
BC – admin expense runs about $12-$18 pepm, not counting managed care fees ($4-$6), actuarial consulting, network access ($2-$5) and disease management (??). Also not included is cost for specific and/or aggregate stop loss insurance, and any fees owed the states in lieu of premium taxes, banking fees, etc.