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Your Health Care Dollar: Vast Majority of Premium Pays for Prescription Drugs and Medical Care

Press Release

Costs underscore the need for new solutions to improve health care competition to improve affordability and access for everyone

Published Sep 6, 2022 • by AHIP

WASHINGTON, D.C. – (September 6, 2022) – American deserve to know how their premium dollars are used. To provide that insight, AHIP has updated its Health Care Dollar, analyzing 3 years of data – from 2018-2020 – of where premium dollars are spent in the commercial market (employer-provided coverage and individual market). The analysis shows that 82.4 cents of every premium dollar go to prescription drugs and medical services – up from 81.6 cents from its last analysis released in 2020.

“This 3-year trend data includes the first year of the COVID-19 pandemic, when health care utilization was down dramatically as patients deferred care and isolated due to the risk of infection,” said Matt Eyles, AHIP President and CEO. “If Americans are to experience lower premiums, we must improve competition among Big Pharma, hospitals and health care systems, and specialists. That is how we make coverage and care more affordable and accessible for everyone.”

Key findings from this analysis shows:

  • Prescription drug expenses were 22.2 cents, including calculations for rebates negotiated by health insurance providers and their pharmacy benefit manager partners.
  • Costs for care provided by hospitals included in-patient hospital costs at 19 cents, out-patient hospital costs at 19.9 cents, and emergency costs at 3.3 cents.
  • Doctor visits accounted for 11.8 cents.
  • Taxes and fees represented 3.8 cents.

Check out the AHIP Health Care Dollar.

Read more about AHIP’s Healthier People through Healthier Markets solutions.

About AHIP

AHIP is the national association whose members provide health care coverage, services, and solutions to hundreds of millions of Americans every day. We are committed to market-based solutions and public-private partnerships that make health care better and coverage more affordable and accessible for everyone. Visit to learn how working together, we are Guiding Greater Health.