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Sherlock Company Press Releases

7/11/17: Optimizing Costs in an Uncertain Environment, Independent/Provider-Sponsored Administrative Costs Increased by 2.4% in 2016

Independent/Provider-Sponsored health plans’ per member administrative expenses increased by 2.4% in 2016, up from a decline of 0.1% in 2015. A shift in mix to more expensive Medicare Advantage meant that reported expenses appeared to increase by 3.0%, compared to the 1.5% decrease in the prior year. These changes exclude confounding effects of differences in the universe and the effects of ACA and other taxes.

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6/20/17: Optimizing Costs in an Uncertain Environment, Blue Cross Blue Shield Plan Administrative Costs Increased by 0.6% in 2016

Blue Cross Blue Shield Plans had per member administrative expenses increase by 0.6% in 2016, up from a decline of 0.3% in 2015. A shift in mix to more expensive Medicare Advantage meant that reported expenses appeared to increase by 0.8%, similar to the 0.7% increase in the prior year. These changes eliminate confounding effects of differences in the universe and the effects of ACA and other taxes.

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10/6/16: Medicaid Plans Experience First Decline since 2009 in Administrative Costs.

In 2015, core administrative expenses (Core expenses exclude Sales and Marketing) under the control of management of Medicaid plans decreased at a median rate 5.5% per member, the first time since 2009. Account and Membership Administration costs increased by 4.9%, the fastest rate since 2011. These comparisons eliminate the effects of product mix and universe changes.

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9/26/16: Medicare Plans Continue Cost Decline but Information Systems Costs Accelerate.

The administrative expenses of Medicare focused plans decreased at a median rate 3.2% per member, less dramatically than last year's decrease of 6.7%. However, Account and Membership Administration costs accelerated to a 6.6% increase, up from a 5.3% decrease last year, chiefly due to a surge in Information Systems expense growth. These trends exclude the effect of changes in product mix, and the same plans are included in both years of comparisons.

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7/11/16: For Second Year, Independent/Provider-Sponsored Plans Post Declines in Administrative Costs

In 2015, administrative expenses of Independent/Provider-Sponsored plans decreased at a median rate 0.1% per member, following last year's decrease of 0.4%. Medical and Provider Management decreased by 6.1%.

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6/27/16: In Second Year of Modest Growth, Blue Cross Blue Shield Plan Administrative Costs Increased by 1.2% in 2015

In 2015, administrative expenses excluding taxes of Blue Cross Blue Shield (Blue) Plans increased at a median rate 1.2% per member, approximately the same as last year's increase of 1.1%. Account and Membership Administration costs increased by 0.8%, similar to low growth in 2008 and 2011.

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11/4/15: Medicare-Focused Health Plan Administrative Costs decreased by 6.7% in 2014

In 2014, administrative expenses of Medicare-focused plans decreased at a median rate 6.7% per member, the lowest in at least the past six years. Account and Membership Administration costs also decreased, by 5.3%, the first decrease over the past six years. These comparisons eliminate the effects of product mix and universe changes. The median costs for all products offered by these plans, before Miscellaneous Business Taxes, was $45.71 per member per month.

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10/7/15: Medicaid Plan Operational Administrative Costs Increased by 6.3% in 2014; Grew by 15.1% after the Effect of ACA Taxes

In 2014, core operational administrative expenses (Core expenses exclude Sales and Marketing) under the control of management of Medicaid plans increased at a median rate 6.3% per member, the second highest in the past five years. Account and Membership Administration costs increased by 3.8%, greater than three of the prior five years. These comparisons eliminate the effects of product mix and universe changes. The median core costs before Miscellaneous Business Taxes was $27.99 per member per month.

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7/21/15: Independent/Provider-Sponsored Plan Operational Administrative Costs Decreased by 0.4% in 2014; Grew by 11.1% after the Effect of ACA Taxes

In 2014, operational administrative expenses under the control of management of Independent/Provider-Sponsored (IPS) plans decreased at a median rate 0.4% per member, the lowest in at least seven years. Account and Membership Administration costs increased by 1.1%, the lowest since 2008. These comparisons eliminate the effects of product mix and universe changes. The median total costs before Miscellaneous Business Taxes was $42.14 per member per month.

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7/06/15: Blue Cross Blue Shield Plan Operational Administrative Costs Increased by 1.1% in 2014, 18.4% after the Effect of ACA Taxes

In 2014, operational administrative expenses under the control of management of Blue Cross Blue Shield (Blue) Plans increased at a median rate 1.1% per member, the lowest in at least seven years. Account and Membership Administration costs increased by 3.0%, the lowest since 2011. These comparisons eliminate the effects of product mix and universe changes. The median total costs before Miscellaneous Business Taxes was $33.37 per member per month.

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10/21/14: MEDICARE ADVANTAGE ADMINISTRATIVE COSTS INCREASED BY 3.8% IN 2013

In 2013, total administrative expenses of plans focused on Medicare increased by 3.8% PMPM, while Account and Membership Administration costs increased by 8.1%. While the surge in Account and Membership Administration was unusually high, the increase in total administrative expenses was the lowest since 2010. Relative to premiums, administrative expenses were 10.3%. For Medicare Advantage alone, they were 8.5% compared with 8.7% in 2012.

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10/7/14: MEDICAID PLAN ADMINISTRATIVE COST GROWTH WAS MODEST IN 2013

In 2013, total administrative expenses of selected Medicaid plans grew by effectively 0%, as Core expenses increased in low single digits. Total expenses PMPM increased by 0.2% as-reported and declined by 1.4% when holding constant the product mix of the plans. Core costs, which exclude Sales and Marketing, increased by 3.2%, a modest but slightly higher growth than in 2012. On a constant mix basis, total administrative costs declined by 1.4%, a precipitous fall from the 8.3% increase last year. Core costs increased by 1.6%, a decline from 4.4% last year.

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7/22/14: INDEPENDENT/PROVIDER-SPONSORED PLAN ADMINISTRATIVE COSTS SURGED BY 6.5% IN 2013

In 2013, total administrative expenses of Independent/Provider-Sponsored (IPS) Plans increased by 6.5% PMPM, while Account and Membership Administration costs increased by 10.6%. The latter increase, adjusted to eliminate the effects of product mix changes, was the sharpest in years. Relative to premiums, administrative expenses were 9.7%. They were 8.7% in 2012.

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7/8/14: BLUE CROSS BLUE SHIELD PLAN ADMINISTRATIVE COSTS SURGED BY 6.2% IN 2013

In 2013, total administrative expenses of Blue Cross Blue Shield (Blue) Plans increased by 6.2% PMPM, while Account and Membership Administration costs increased by 8.5%. Both increases, adjusted to eliminate the effects of product mix changes, were the sharpest in years. Relative to premiums, administrative expenses were 8.7%. They were 8.9% in 2012.

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10/23/13: MEDICAID PLAN ADMINISTRATIVE COSTS SLOW ON ACCOUNT AND MEMBERSHIP ADMINISTRATION DECREASES IN 2012

Core administrative expenses of selected Medicaid plans grew by 2.7% per member per month (PMPM). This increase was sharply lower than last year and resumes a multi-year trend of modest growth. While Provider and Medical Management expenses grew less than last year, Account and Membership Administration expenses actually decreased.

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9/23/13: MEDICARE PLAN ADMINISTRATIVE COSTS ACCELERATE ON SALES, MEDICAL MANAGEMENT GROWTH IN 2012

Administrative expenses of selected Medicare plans grew by 7.3% per member per month (PMPM). Double-digit increases in the Sales and Marketing cluster of functions and the Medical Management function were the central factors in cost growth.

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7/22/13: INDEPENDENT/PROVIDER-SPONSORED PLAN ADMINISTRATIVE COSTS WERE 8.7% OF PREMIUMS IN 2012

Administrative expenses of Independent/Provider-Sponsored (IPS) plans were 8.7% of premiums in 2012. Administrative expenses grew by 7.1% per member but 8.6% after excluding the effects of a product mix change in favor of Administrative Services Only. IPS plans reported median total administrative expenses of $38.42 PMPM.

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7/9/13: BLUE CROSS BLUE SHIELD PLAN ADMINISTRATIVE COSTS WERE 8.9% OF PREMIUM IN 2012

Administrative expenses of Blue Cross Blue Shield (Blue) Plans were 8.9% of premium in 2012. Administrative expenses grew by 5.1% per member but 3.8% after excluding the effects of a product mix change in favor of Medicare Advantage. Blue Plans reported median total administrative expenses of $29.25 PMPM.

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10/9/12: MEDICARE PLAN ADMINISTRATIVE COSTS SOAR ON INFORMATION SYSTEMS AND MEDICAL MANAGEMENT INCREASES IN 2011

Administrative expenses of selected Medicare plans grew by 7.0% per member per month (PMPM). Double-digit increases in Information Systems and Medical Management were the central factors in cost growth, while Sales and Marketing expenses grew moderately.

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09/25/12: MEDICAID PLAN ADMINISTRATIVE COSTS SURGE ON INFORMATION SYSTEMS AND MEDICAL MANAGEMENT INCREASES IN 2011

Administrative expenses of selected Medicaid plans grew by 11.3% per member per month. Double-digit increases in Information Systems and Medical Management were central.

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09/4/12: TPA ADMINISTRATIVE EXPENSE PRE MEDICAL EMPLOYEE PER MONTH WAS $20.94, AND PER MEDICAL MEMBER MONTH WAS $10.26 IN 2011

Administrative expenses for core services of selected TPAs were 88% of fees in 2011. This was $11.87 per employee per month (PEPM) or $5.79 per member per month (PMPM). Core Medical product costs were $20.94 PEPM and $10.26 PMPM.

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07/20/12: INDEPENDENT/PROVIDER-SPONSORED PLAN ADMINISTRATIVE COSTS WERE 8.7% OF PREMIUM IN 2011

Administrative expenses of Independent/Provider-Sponsored (IPS) plans were 8.7% of premium in 2011. Administrative expenses grew by 4.1% per member and 3.1% after excluding the effects of a product mix change in favor of Medicare Advantage. IPS plans reported median total administrative expenses of $35.06 PMPM.

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06/05/12: BLUE CROSS BLUE SHIELD ADMINISTRATIVE COSTS WERE 9.1% OF PREMIUM IN 2011

Administrative expenses of Blue Cross Blue Shield plans fell to 9.1% of premium in 2011, compared with 9.2% in 2010 and 9.7% in 2009. While total administrative costs grew at an increasing rate, the central Account and Membership Administration cluster increased by 0.5%, per member per month, holding product mix constant. This cluster includes Enrollment, Claims, Customer Services and Information Systems. Costs to adapt to the new health insurance environment impacted other operating activities.

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10/13/09: MEDICAID PLAN CORE ADMINISTRATIVE COST GROWTH DECLINES IN 2008

Core per member administrative costs in Medicaid plans decreased by 1.4% in 2008, compared with 8.2% in 2007. Adjusting for changes in product mix, administrative expenses grew by 1.4% in 2008 compared with 4.2% in 2007. Administrative expenses of such plans were 8.8% of premium equivalents in 2008 compared with 9.3% in 2007.  Median core administrative expenses of Medicaid products sold by these plans were 7.0%, and total administration for Medicaid products was $20.13. All cited values exclude net capital costs and net non-operating income, income taxes and miscellaneous business taxes.

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9/28/09: MEDICARE PLANS' ADMINISTRATIVE COSTS INCREASE ON MARKETING GROWTH IN 2008

Per member administrative costs grew by 8.3% in 2008, compared with 3.3% in 2007. Adjusting for changes in product mix, administrative expense growth increased to 10.2% in 2008 from 1.9% in 2007. Administrative expenses were 10.2% of premium equivalents in 2008 compared with 9.4% in 2007.  Plans reported total administrative expenses of $46.46 per member per month.  All cited values exclude net capital costs and net non-operating income, income taxes and miscellaneous business taxes.

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7/21/09: BLUE CROSS BLUE SHIELD ADMINISTRATIVE COST TRENDS DECREASE IN 2008, PRODUCT MIX SHIFTS

Per member administrative costs grew by 2.7% in 2008, compared with 4.3% in 2007. Adjusting for the shift in product mix towards ASO and FEP, administrative expense growth increased to 4.0% in 2008 from 2.5% in 2007. Administrative expenses were 9.9% of premium equivalents in 2008 compared with 10.4% in 2007.  Plans reported total administrative expenses of $25.95 per member per month.  All cited values exclude investment and non-operating income and expense, income taxes and miscellaneous business taxes.

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7/07/09: INDEPENDENT / PROVIDER-SPONSORED ADMINISTRATIVE COST TRENDS INCREASE IN 2008 AS RATIOS DECREASE ON PRODUCT MIX CHANGE

Per member administrative costs grew by 11.5% in 2008, compared with 4.9% in 2007. Adjusting for the shift in product mix towards Medicare Advantage, administrative expense growth increased by 6.2% in 2008 from 3.1% in 2007. By contrast, administrative expenses were 8.3% of premium equivalents in 2008 compared with 9.4% in 2007.  Plans reported total administrative expenses of $30.37 per member per month.  All cited values exclude investment and non-operating income and expense, income taxes and miscellaneous business taxes.

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7/16/08: BLUE CROSS BLUE SHIELD ADMINISTRATIVE COST TRENDS DECLINE IN 2007

Per member administrative cost growth declined from 6.1% in 2006 to 4.3% in 2007. Adjusted to eliminate the effect of a shift in product mix, administrative expense growth declined from 6.5% in 2006 to 2.5% in 2007. Administrative expenses were 10.4% of premium equivalents in 2007.  Plans reported total administrative expenses of $25.36.  All cited values exclude investment and non-operating income and expense, income taxes and miscellaneous business taxes.

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3/28/08:SIXTH ANNUAL ADMINISTRATIVE BENCHMARKING FOR PROVIDER-SPONSORED HEALTH PLANS BEGINS

Recently, Sherlock Company launched its sixth annual benchmarking study for Provider-Sponsored Health Plans. Fourteen plans serving more than four million members are participating in this year's performance benchmarking study in this peer group. Surveys are due back to Sherlock Company by the end of May and publication of the results is expected to begin in early July.

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3/28/08: ELEVENTH ANNUAL ADMINISTRATIVE BENCHMARKING FOR BLUE CROSS BLUE SHIELD PLANS BEGINS

Recently, Sherlock Company launched its eleventh annual benchmarking study for Blue Cross Blue Shield Plans. Twenty-three Plans are participating in this year's performance benchmarking study, representing most of the 39 primary Blue Cross Blue Shield licensees. Surveys are due back to Sherlock Company by the end of May and publication of the results is expected to begin in early July.

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10/9/07: HEALTH PLANS EXPECT PREMIUM INCREASE OF 7.4% IN 2008

Health plans are expecting premium rate increases in 2008 of 7.4%, 0.8 percentage points lower than last year’s expectation of 8.2%. This is the fourth consecutive decline in the rate of premium growth.

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8/1/07: LARGER HEALTH PLAN BENCHMARKS PUBLISHED

The median administrative costs of larger health plans were $25.14 Per Member Per Month (PMPM) in 2006. This equated to 8.8% of premium equivalents, as detailed in Sherlock Company's SEER benchmarks.

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8/1/07: PROVIDER-SPONSORED HEALTH PLAN BENCHMARKS PUBLISHED

The median administrative costs of independent, Provider-Sponsored health plans were $27.73 Per Member Per Month (PMPM) in 2006. This equated to 9.3% of premium equivalents, as reported in Sherlock Company's benchmarks.

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7/16/07: NEW BLUE CROSS BLUE SHIELD ADMINISTRATION BENCHMARKS PUBLISHED

Median administrative costs for selected Blue Cross Blue Shield Plans were $25.90 per member per month (PMPM) in 2006, according to Sherlock Company’s recently published performance benchmarks. This equated to 11.9% of premiums or equivalents.

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10/17/06: MEDICARE ADVANTAGE HEALTH PLANS' ADMINISTRATIVE EXPENSE BENCHMARKS

Sherlock Company’s 2005 Medicare Advantage performance benchmarks had a median administrative cost of $29.96 per member per month (PMPM) for total products.  Medical and provider management had the lowest cost with $5.67.  Marketing had the second lowest median cost with $7.13.  Account and Membership Administration and Corporate Services had costs of $8.78 and $8.04, respectively.

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10/17/06: MEDICAID-ORIENTED HEALTH PLANS' ADMINISTRATIVE EXPENSE BENCHMARKS

Sherlock Company’s performance benchmarks for Medicaid-Oriented health plans showed median administrative costs of $18.35 per member per month (PMPM) for all products in 2005.  Marketing had the lowest costs with $2.35, followed by Medical and Provider Management with $4.47.  Account and Membership Administration and Corporate Services had costs of $5.61 and $5.94, respectively. Total administrative cost excluding marketing and miscellaneous business tax was $15.19.

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10/11/06: HEALTH PLANS EXPECT 8.2% INCREASE IN PREMIUMS FOR FOR 2007

Health plans nationwide report that premium rate increases in 2007 will be 8.2%, 0.2 percentage points lower than last year.  Before buy-downs, premium rate increases are expected to be 10.4% down from 11.1% last year. We estimate that the difference between before and after buy-down rate increases implies an 18.6% increase in employee contribution for 2007.

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10/7/05: HEALTH PLANS EXPECT 8.4% INCREASE IN PREMIUMS FOR FOR 2006

Health plans nationwide report that premium rate increases in 2006 will be 8.4%, 0.9 percentage points lower than last year. Before buy-downs, premium rate increases are expected to be 11.1% down from 11.3% last year. We estimate that the difference between before and after buy-down rate increases implies a 21.2% increase in employee contribution for 2006.

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7/18/05: HEALTH PLAN ADMINISTRATIVE EXPENSE GROWTH PLUMMETS

The growth of health plan administration declined to 2 percent in 2004 per member, down significantly from increases in 2003, according to Sherlock Company’s performance benchmarks..

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10/18/04: HEALTH PLANS EXPECT 11.3% INCREASE IN PREMIUMS FOR 2005, 9.3% AFTER BUY-DOWNS

Health plans report that premium rate increases, before the effects of buy-downs, are expected to be 11.3% in 2005, well below last year’s increase of 12.8%.  Plans reported an expected increase in their health benefits ratios of 0.6 percentage points, the second consecutive year of projected increases.  The average expected buy-down spread of 2.1% was the same as last year.

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9/16/04: SMALLER PROVIDER-SPONSORED HEALTH PLANS HAVE LOWER ADMINISTRATIVE COSTS THAN BLUES AND PUBLIC, ACCORDING TO SHERLOCK COMPANY

A comparison between the administrative expenses of Provider-Sponsored plans and larger Blue Cross Blue Shield and Public plans indicates that Provider-Sponsored plans run leaner.  On average, Provider-Sponsored plans have administrative expenses of $18.64, 76% of their larger peers costs of $24.37. The lower costs are apparent when analyzed by product or by major functional area.

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7/13/04: BLUE CROSS BLUE SHIELD PLAN ADMINISTRATIVE EXPENSES APPROXIMATE 11% OF PREMIUMS, ACCORDING TO SHERLOCK COMPANY

The Sherlock Expense Evaluation Report (SEER), Blue Cross Blue Shield Edition, shows that median PMPM costs for comprehensive products were $24.30 in 2003. The 18 Plans included in this study serve 27.9 million members or 31% of the membership served by Blue Cross Blue Shield Plans.

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7/12/04: SHERLOCK COMPANY PUBLISHES ADMINISTRATIVE EXPENSE BENCHMARKS

Sherlock Company's recently published benchmarks for health plans report median costs of $24.30 for all comprehensive products in 2003. The reporting firms, eighteen Blue Cross Blue Shield Plans, reported expenses which ranged from $18.80 for POS (ASO) to a high of $42.26 for Medicare Advantage. Full Release

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4/7/04: LARGER PLAN ADMINISTRATIVE EXPENSES APPROXIMATE 11% OF PREMIUMS, ACCORDING TO SHERLOCK COMPANY

The Sherlock Expense Evaluation Report (SEER), Larger Plans Edition, shows that administrative expenses for Larger Plans' insured commercial products were 11.29% of premiums, or $23.28 per member per month (PMPM) in 2002.

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7/9/2003: ADMINISTRATIVE EXPENSE BENCHMARKS FOR HEALTH PLANS PUBLISHED BY SHERLOCK COMPANY

Sherlock Company's recently published benchmarks for health plans report median costs of $22.46 for all comprehensive products. The reporting firms, seventeen Blue Cross Blue Shield Plans, reported expenses which ranged from $15.17 for indemnity and PPO (ASO) to a high of $48.70 for Medicare + Choice. Full Release

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1/8/2003: Does Health Insurance Administration Increase Health Care Cost Trends?

How have administrative cost trends been relative to medical cost inflation? What administrative costs have shown the most growth? The least growth? Sherlock Company has performed a longitudinal study based on the aadministrative expenses of participants in the SEER reports over recent years that answers these and other questions. Full Release

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10/7/2002: Health Plans Expect 15.2% Increase in Premiums for 2003

Health plans report that premium rate increases are expected to be 15.2% in 2003, narrowly below last year's record setting pace of 15.6%. Results from publicly traded multi-state health plans corroborate these results, expecting premium rate increases of 16.5% on average. Full Release

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8/2002: ADMINISTRATIVE EXPENSE BENCHMARKS FOR HEALTH PLANS PUBLISHED BY SHERLOCK COMPANY

Detailed financial benchmarks for health plan administrative expenses will be shortly published by Sherlock Company. The Sherlock Expense Evaluation Reports (SEER) are unique in their timeliness, detail and breadth of their universes. This is the fourth year that Sherlock Company has compiled these studies. Full Release

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