² An analysis of data for 1997–2000 for many, though not all, BC plans found the following administrative expense ratios (AERs): (1) independent not-for-profit plans (n =19)=13.0%; (2) consolidated not-for-profit plans (n =7)=13.4%; and (3) for-profit plans (n = 4) = 23.4%. As a comparison, the AER for ten commercial plans also studied was 15.3% (Schramm 2001b). However, caution is in order in comparing expense ratios, since without adjustment, plans with a high level of administrative-services-only business (ASO) will appear to have high expense ratios if the administrative costs for ASO activities are included without any counterbalancing premiums or revenues. As an illustration, Anthem’s AER for 2000 was 21.2% without adjustment but fell to 15.3% when compared with operating revenue and “premium equivalent” revenue for ASO accounts (see table 5–11 in PriceWaterhouseCoopers 2002). A recent compilation by the Blackstone Group (2002) showed an adjusted AER for Wellpoint of 10.8%; for Anthem, 14.1%; and for Cobalt, 9.4%. The sharp contrast between these figures and those reported by Schramm strongly suggest that his are unadjusted and therefore may be misleading as an indicator of plan performance. [Return to Text]