Data from Brown University Provide New Insights into Managed Care (Substantial Variation In Administrative Spending and Profit Across State Insurance Markets, 2023): Managed Care

2026 MAY 05 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Current study results on Managed Care have been published. According to news reporting originating in Providence, Rhode Island, by NewsRx journalists, research stated, “The US spends hundreds of billions of dollars annually on health insurance administration, but variation in administrative costs and profits remains inadequately understood. We used regulatory filings to estimate state-level, all-plan administrative spending and profit in 2023 for each of three market segments: fully insured commercial coverage, Medicaid, and self-funded commercial coverage.”

Financial support for this research came from Arnold Ventures.

The news reporters obtained a quote from the research from Brown University, “Across state markets for fully insured coverage, median all-plan administrative spending was $599 per person per year, with median profits of $63 per person per year. Administrative costs for self-funded coverage were substantially lower (median, $285 per person per year), as were profits ($22 per person per year). Administrative spending was highest in Medicaid. In states with Medicaid managed care, administration and plan profit accounted for $772 per person per year. Total spending was about $250 per person per year lower in states without Medicaid managed care. Per person per year spending was highly variable across states for all segments.”

According to the news reporters, the research concluded: “Conservatively, reducing administrative spending and profits in states with above-median levels to the cross-state median could save approximately $6 billion, $9 billion, and $4 billion in the fully insured, Medicaid, and self-funded segments, respectively.”

This research has been peer-reviewed.

For more information on this research see: Substantial Variation In Administrative Spending and Profit Across State Insurance Markets, 2023. Health Affairs, 2026;45(3):331-340. Health Affairs can be contacted at: Project Hope, 7500 Old Georgetown Rd, Ste 600, Bethesda, MD 20814-6133, USA.

Our news correspondents report that additional information may be obtained by contacting Jason D. Buxbaum, Brown University, Providence, RI 02912, United States. Additional authors for this research include Daniel R. Arnold, Erin C. Fuse Brown, Christopher M. Whaley and Andrew M. Ryan.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1377/hlthaff.2025.00779. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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