Where the Commercial Health Insurance Dollar Goes

America’s Health Insurance Plans is the trade group for the nation’s health insurers.  While what comes out of these trade groups has to be understood in light of their role as a shill for their members, but they still can put out good data.  This little article describes where the premium dollar goes for the typical employer health plan.  Since employees pick up a lot of this cost, it affects them as well.  (AHIP Article)  Now this is based on 2016-2018 data, I have no idea why there is such a lag, but trend is probably accurate.  Around 21%, the single biggest bucket, goes to prescription drugs.  About 19% goes to hospital inpatient care.  20% goes for hospital outpatient care.  So hospitals really eat up 40% of the premium dollar.  12% goes to physician visits in an outpatient setting, and 6% for other outpatient care.  3.2% goes to ERs, which is ridiculous, but hospitals love it because they charge excessively high prices for ER care.  10.7% goes for administrative expense.  4.6% is your government at work, collecting taxes everywhere it can.  And 3% is profit.   So there you have a simplified view of what happens to those health care premium dollars you pay if you are employed.