Your Premium Dollar Does What?

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AHIP Just released info about how your health insurance premium dollars are spent.  The latest data is from 2014, but seems in line ultimately, with the net margin information we remember from before the Affordable Care Act was signed into law.

So What Does A Health Insurance Premium Dollar Really Pay For?

22.1¢ for prescriptions.
22.0¢ for physician services.
19.8¢ for out-patient services.
15.8¢ for In-patient services.
17.8¢ for carrier operating costs.
2.7¢ Net Margin.

“Medical expenses as identified in this research differs from Medical Loss Ratio as defined by the Affordable Care Act.  Operating costs include consumer-centric activities such as communicating with members, running customer service operations, quality reviews, and data analysis, among other activities.  Values exceed 100% due to rounding.  The objective of this analysis is to characterize how a dollar of commercial health insurance premium is spent. Specifically, the analysis shows the amounts paid by commercial health insurance plans in 2014 for the medical care of plan members; the amounts paid for general operating expenses of the health plan; and the reported profit (or loss).”

Source: AHIP. Kristi Wick. 3/2/2017.

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