Where do your health insurance dollars go?
I’ve written a lot about the factors that contribute to health insurance rate increases, but sometimes words aren’t enough. Blue Shield of California decided to illustrate its costs with a picture.
The insurance company explains how it spends its money with this image of a dollar-
Notice that 85 cents or 85% of what the insurance company spends goes straight to medical costs. The data for this image comes from Blue Shield of California’s “internal data” but it’s a pretty accurate representation of health insurance spending in Rhode Island. According to data from RI’s health insurance commissioner, health plans in RI spend between 82% and 87% of their money on medical costs.
How do we chip away at that number? It’s going to be a long, hard process, but Rhode Island is working on it. One plan holds health insurance companies responsible for pushing those costs down.
Thanks to Sarah Kiff from the Washington Post for writing about this first.