Where your money goes

May 27, 2013 Denise Pinkney

First, your premium goes into a pool

When you purchase health insurance, you become part of a group that pools money together to cover the health care costs of everyone in the group. Some use a great deal of health care services. Others use very little. Combining resources spreads the costs among many people. It also increases your purchasing power in the medical community. See where your money goes from there.

For every dollar BCBSND members pay:

90.1¢ pays for services members use

  • Doctor visits
  • Exams, tests, screenings, procedures
  • Inpatient/outpatient surgeries
  • Hospital stays
  • Emergency/Urgent Care visits
  • Medical equipment (prosthetics, crutches, etc.)
  • Rx drugs

7.4¢ pays for member wellness programs & BCBSND operating expenses (the national average is 14¢)

  • Programs to help members manage diseases
  • Programs that help members stay well
  • Technology to connect with doctors and members
  • Licensing and regulatory fees paid to government agencies
  • Member claims processing, customer service
  • BCBSND facilities, salaries, operations, property and income taxes

1.2¢ pays the government for a tax on your premium

While BCBSND is a not-for-profit company, it is not tax exempt. BCBSND pays property, federal income and state premium taxes.

1.3¢ goes into a reserve account

A rainy day fund with minimum standards set by the National Association of Insurance Commissioners, and the Blue Cross and Blue Shield Association

2012 Data