How Your Premium Dollars are Spent

As a non-profit company, Blue Cross and Blue Shield of Vermont has no shareholders. As a result, every dollar we collect is used to pay for the medical services our members receive, process their claims, and maintain a reserve fund to protect them in the event of unexpectedly high levels of medical expenses.

At Blue Cross Blue Shield of Vermont, an average of 90 cents from each premium dollar is paid directly to doctors and hospitals in exchange for the care they provide to our members. Nine percent of each dollar is spent on administrative costs, covering everything from employee salaries to computer systems and building maintenance. The remaining one percent is deposited into our reserves, a proverbial "rainy day fund" that health insurers are required to maintain in order to assure that there is sufficient money to pay claims even if medical utilization exceeds expectations due to things like disasters or epidemics.