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Insurance 101: A breakdown of your premium dollars

August 15, 2017 Rhonda Ubben

You may know that North Dakota has some of the highest quality health care in the country. But did you know we also have some of the lowest premium costs?

That means your insurance premiums go a long way to provide coverage for you and your family.

But what is a premium? And where does the money go?

A premium is the amount of money paid by an individual or business for an insurance policy.

When you buy insurance, your premium is pooled with a group. The combined power of the group gives you more purchasing power with health care providers.  

Let's break down $1 for a look at how your insurance premium works for you.

84.9 cents pays direct medical costs.
This includes fees for doctor visits, exams, surgeries, hospital stays, equipment, medications and more.

7.7cents covers BCBSND administrative costs and programs.
This money allows us to create wellness and chronic disease initiatives. It also pays for claims processing, customer service, government fees, facilities, salaries and taxes.

3.6 cents are kept in reserves.
To ensure we can pay claims in the event of a catastrophe, BCBSND is required to keep money on hand. Reserve minimums are set by the National Association of Insurance Commissioners and the national Blue Cross Blue Shield Association.

2.2 cents goes to Affordable Care Act (ACA) fees and taxes.

1.6 cents is state premium tax.

Your insurance exists to benefit you. To truly make the most of your health dollars, check out these tips.