How $1 in health insurance gets spent

at 01:31 PM ET, 01/04/2012

Via Blue Shield of California, a breakdown of how each dollar it gets from health insurance subscribers gets spent:

The point? Most of the dollar goes to medical care, not insurer profits. That’s particularly true for Blue Shield of California, which pledged last year to cap its profits at 2 percent. But it’s broadly true across the health-insurance industry. According to Fortune’s 2009 ranking of industry profits, the health-insurance industry’s takes 2.2 percent of its revenues as profits. The pharmaceutical industry, by contrast, takes 19.4 percent.

It also hews to the health reform law’s new regulations on health insurance plans, which require large-employer plans to spend at least 85 cents of every dollar on medical costs.

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