How a Premium Dollar Is Spent

premium-dollarAmerica’s Health Insurance Plans, a national trade association whose member companies provide insurance coverage and health-related services to consumers and businesses, has released a study revealing the breakdown of today’s healthcare premium dollar, as follows:

  • 23.3 cents of every premium dollar is used for prescription drugs
  • 22.2 cents cover the cost of physician services
  • 20.2 cents are used to pay for office and clinic visits
  • 16.1 cents are used to cover hospital stays
  • 13.5 cents are applied to care management, administrative expenses, business expenses, provider management and other fees
  • 4.7 cents of every dollar go to taxes, and…

AHIP reports that on average, 2.3 cents of every premium dollar make it to the bottom line as net profit.

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