Medical Economics June 5, 2023
Higher administrative costs hurt providers, but technology can help
Payers are increasingly drawn to the benefits of Medicare Advantage (MA), while providers face challenges adapting to its impact. MA offers clear advantages to payers, particularly in terms of profitability. According to an analysis by the Kaiser Family Foundation (KFF), MA insurers reported gross margins averaging $1,730 per enrollee in 2021. This figure is at least double the margins reported by insurers in the individual/non-group market ($745), the fully insured group/employer market ($689), and the Medicaid managed care market ($768).
The greater profitability of MA for health insurers has resulted in increased spending by the federal government on health care costs. A separate KFF analysis revealed...
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