Health plans pay close attention to the expense budget because medical claims account for what percentage of their operating expenses?

Health plans closely monitor their expense budgets because a significant portion of their operating expenses is attributed to medical claims. Medical claims often represent 80% or more of the total operating expenses for many health plans. This high percentage underscores the critical importance of effective claims management, cost containment strategies, and overall operational efficiency within health plans.

Understanding the implications of medical claims on operating expenses is essential for health care financial management. When medical claims constitute such a large share of expenses, health plans must accurately project future claims, manage provider contracts, and implement strategies for reducing unnecessary costs. This helps in maintaining profitability and ensuring sustainable operations.

The other options reflect lesser percentages that do not accurately capture the magnitude of the impact medical claims have on health plans. Given the financial structures of health care organizations, the reality is that adequate planning and budgeting around medical claims is crucial to the overall financial health of the organization.