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Medicare Advantage benefit costs rise 9.6% in 2025, margins narrow
Sherlock data showed administrative expenses were nearly flat in 2025, with per member admin costs of $56.76 per month.
Medicare Advantage health benefit costs rose a median 9.6% in 2025, while administrative expenses held nearly flat, according to Sherlock Company benchmark data.
The shift contributed to narrowing plan margins at the same time Medicare Advantage expanded to cover more than half of eligible Medicare beneficiaries in the US.
Sherlock said its 2026 Medicare benchmark edition drew on surveys of 11 Medicare-focused health plans serving 2.1 million Medicare Advantage and Special Needs Plan members, for 15.4 million members in total.
Sherlock also reported per member administrative costs declined 0.3% on a constant-mix basis in 2025, to $56.76 per member per month, or 8.5% of premium equivalents, down from 9.3% the prior year.