AHIP (formerly, America’s Health Insurance Plans) recently released their analysis on where America’s health care premium dollars go. The survey found that nearly two-thirds of every dollar Americans pay for health care premiums goes towards hospital and prescription drug costs. More specifically, 40 cents of every premium dollar paid goes to hospital costs – such as inpatient and outpatient hospital costs and emergency room costs – and nearly a quarter goes towards prescription drug costs.

In total, over 80 cents of every health care premium dollar goes towards the funding the medical expenses of health plan members. Notably, health plan profits account for less than 3 cents of every premium dollar. Other costs include taxes and fees, quality improvement and other administrative expenses. Due to federal “medical loss ratio” laws, health plans are the only healthcare entity that have their profits capped. Health plans nationally and in Wisconsin continue to use all the tools available to them to fight against increasing hospital and drugs costs and keep high-quality care affordable for their plan members.