Editing Openai/692cb885-da9c-8002-9696-e985fae204bd (section)

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In the United States, most health insurance is provided by for-profit companies. The Affordable Care Act (ACA) of 2010 expanded coverage through private insurers and fueled industry growth – along with rising profits. In the decade-plus since ACA’s passage, the five largest insurers (UnitedHealth Group, Cigna, Kaiser Permanente, Elevance/Anthem, and CVS/Aetna) have collectively amassed over $371 billion in profitstruthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=America%E2%80%99s%20largest%20health%20insurers%20have,medical%20claims%20from%20its%20policyholders|publisher=truthout.org|access-date=2025-11-30}}</ref>. UnitedHealth Group alone accounts for about 40% of that sum, with its annual net income soaring nearly 400% since 2010truthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=America%E2%80%99s%20largest%20health%20insurers%20have,medical%20claims%20from%20its%20policyholders|publisher=truthout.org|access-date=2025-11-30}}</ref>. In 2023, UnitedHealth (the nation’s largest insurer) made $23 billion in profit while covering over 50 million peopletruthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=UnitedHealthcare%2C%20the%20largest%20U,to%20UnitedHealth%20Group%E2%80%99s%20financial%20statements|publisher=truthout.org|access-date=2025-11-30}}</ref>. This equates to roughly $460 in profit per member that year – money coming out of premiums paid by individuals, employers, and government programs.

Yet these gains for insurers have coincided with skyrocketing costs for consumers. The average annual premium for an employer-sponsored family plan now approaches $26,000truthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=This%20year%2C%20the%20average%20health,risen%2052%20percent%2C%20outpacing%20inflation|publisher=truthout.org|access-date=2025-11-30}}</ref>, having risen over 50% since 2014 (far outpacing general inflation)truthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=This%20year%2C%20the%20average%20health,risen%2052%20percent%2C%20outpacing%20inflation|publisher=truthout.org|access-date=2025-11-30}}</ref>. Individual employees pay nearly $9,000 on average for their own employer-based coveragetruthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=This%20year%2C%20the%20average%20health,risen%2052%20percent%2C%20outpacing%20inflation|publisher=truthout.org|access-date=2025-11-30}}</ref>. Despite higher premiums, patients often face denied claims and high out-of-pocket expenses. Nearly 17% of in-network claims on ACA marketplace plans were denied in 2021truthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=out%20of%20pocket%20for%20procedures,exchange%20were%20denied%20in%202021|publisher=truthout.org|access-date=2025-11-30}}</ref>, and one analysis found UnitedHealthcare rejected about one in three claims – the highest denial rate among major insurerstruthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=insurance%20exchange%20were%20denied%20in,2021|publisher=truthout.org|access-date=2025-11-30}}</ref>. As a result, millions of Americans incur medical debt or skip needed care. In short, for-profit insurers are thriving financially even as enrollees shoulder increasing costs and coverage gapstruthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=Insurers%20garnered%20these%20profits%20as,which%20acquired%20Aetna%20in%202018|publisher=truthout.org|access-date=2025-11-30}}</ref>truthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=This%20year%2C%20the%20average%20health,risen%2052%20percent%2C%20outpacing%20inflation|publisher=truthout.org|access-date=2025-11-30}}</ref>.

A key reason is that the for-profit model incentivizes insurers to prioritize shareholders and profits. Companies generate profit by collecting more in premiums than they spend on medical claims. This dynamic can encourage restrictive practices – such as narrow networks, coverage denials, and high cost-sharing – to keep payouts low and margins high. It also fuels high administrative overhead: dollars spent on marketing, underwriting, executive salaries, and profit distribution rather than on health care. In 2014, U.S. insurers on average spent about 18 cents of every premium dollar on administration (and nearly 3 cents on profit), leaving ~80 cents for medical carejamanetwork.com<ref>{{cite web|title=jamanetwork.com|url=https://jamanetwork.com/channels/health-forum/fullarticle/2760129#:~:text=|publisher=jamanetwork.com|access-date=2025-11-30}}</ref>jamanetwork.com<ref>{{cite web|title=jamanetwork.com|url=https://jamanetwork.com/channels/health-forum/fullarticle/2760129#:~:text=But%20even%20a%20profit%20margin,health%20care%20workers%20and%20facilities|publisher=jamanetwork.com|access-date=2025-11-30}}</ref>. By contrast, public programs like Medicare have overhead closer to 2–5% (about 2–5 cents per dollar) while private plans’ overhead is around 17%americanprogress.org<ref>{{cite web|title=americanprogress.org|url=https://www.americanprogress.org/article/excess-administrative-costs-burden-u-s-health-care-system/#:~:text=Medicare%20and%20Medicaid%20hover%20around,relatively%20high%20health%20expenditures%2C%20the|publisher=americanprogress.org|access-date=2025-11-30}}</ref>. The multi-payer, profit-driven U.S. system has roughly double the administrative costs of simpler non-profit or public systemsjamanetwork.com<ref>{{cite web|title=jamanetwork.com|url=https://jamanetwork.com/channels/health-forum/fullarticle/2760129#:~:text=But%20even%20a%20profit%20margin,health%20care%20workers%20and%20facilities|publisher=jamanetwork.com|access-date=2025-11-30}}</ref>. These excess costs ultimately get baked into the premiums that individuals and employers pay.

Given this context – soaring insurer profits, high premiums, and wasteful overhead – it’s natural to ask if a different financial model could deliver better value. One bold proposal is to convert health insurance companies into non-profit entities, effectively eliminating the profit motive and redirecting resources toward consumers. Below, we explore how a non-profit insurance model might work, its pros and cons (versus the status quo), and other mechanisms to reduce costs for enrollees.

==== Envisioning all health insurers as non-profit (or even government-run) organizations would be a transformative shift. In a non-profit model, insurers would no longer have shareholders expecting quarterly profits or stock price growth. Any surplus revenue (“profit”) an insurer generates would be reinvested in the organization or returned to the insured members rather than paid out as dividends or share buybacks. Essentially, policyholders would become the primary stakeholders instead of stockholders. This approach parallels how some cooperative or mutual insurance companies operate, where customers are members who may receive dividend rebates in profitable years. It’s also analogous to certain international systems: for example, Switzerland legally requires basic health insurance to be provided by private '''non-profit''' insurers, who must use any excess funds to benefit enrollees (while only supplemental plans can be for-profit)commonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/international-health-policy-center/countries/switzerland#:~:text=age%2C%20and%20disability%20insurance%2C%20made,percent%20of%20spending%20in%202016|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>reddit.com<ref>{{cite web|title=reddit.com|url=https://www.reddit.com/r/Switzerland/comments/1gplui8/does_no_profit_for_basic_health_insurance/#:~:text=,on%20basic%20health%20insurance|publisher=reddit.com|access-date=2025-11-30}}</ref>. Historically, many U.S. Blue Cross/Blue Shield plans were non-profit member-based organizations (though some have since demutualized into for-profits). ====

In a fully non-profit insurance landscape, all profits would effectively be “seized” (i.e. retained in the non-profit trust) and redistributed to the insured population – likely in the form of lower premiums, expanded benefits, or rebates. For instance, consider that the top five insurers accrued $371 billion in profits since 2010truthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=America%E2%80%99s%20largest%20health%20insurers%20have,medical%20claims%20from%20its%20policyholders|publisher=truthout.org|access-date=2025-11-30}}</ref>. If that sum had instead been used to reduce premiums or out-of-pocket costs, it could have substantially eased the financial burden on tens of millions of Americans. Even on a yearly basis, UnitedHealth’s $23 billion profit in 2023 could, if not taken as profit, have been used to lower premiums by an average of several hundred dollars per member (e.g. roughly $460 per person in UnitedHealth’s case). Across the industry, removing a typical profit margin of, say, 5% could similarly translate into single-digit percentage premium reductions for consumers – not a silver bullet for affordability, but a meaningful relief given current family premiums in the tens of thousands. And beyond direct premium impact, a non-profit orientation might encourage insurers to spend more on member health (care management, preventive services, etc.) rather than cost avoidance. The overall mission of insurers would shift from profit maximization to maximizing coverage and health outcomes, treating health insurance more like a public utility or service.

Of course, implementing this model would be complex. For-profit insurers would need to convert their corporate status (potentially through government action or buyouts of shareholders). There is precedent in other sectors for converting to non-profit or mutual status, but doing so at an industry-wide scale would likely require legislation. Alternatively, the government could establish a single-payer or public insurance system that displaces private insurers – which is another route to eliminating profit, though that goes even further by centralizing payer functions. Short of a single-payer overhaul, one could imagine regulating insurers like utilities, with caps on profit margins and requirements to rebate excess earnings to consumers (the ACA’s Medical Loss Ratio rule already takes a step in this direction by requiring insurers to spend at least 80–85% of premiums on medical care, capping profits/overhead at 15–20%jamanetwork.com<ref>{{cite web|title=jamanetwork.com|url=https://jamanetwork.com/channels/health-forum/fullarticle/2760129#:~:text=The%20nearly%2080%20cents%20per,entities%20who%20offer%20health%20care|publisher=jamanetwork.com|access-date=2025-11-30}}</ref>). Strengthening such regulations or converting insurers’ governance would institutionalize a consumer-first financial model.

In evaluating this idea, it’s important to weigh the potential benefits and drawbacks of a non-profit insurance industry compared to the current for-profit system. The following table summarizes some key pros and cons of each model:

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(Table: Comparison of the current for-profit insurance model vs. a hypothetical non-profit model, highlighting key advantages and disadvantages of each.)

As shown above, moving to non-profit insurers offers clear ethical and practical benefits – refocusing on patients, reducing overhead, and easing financial burdens on enrollees. It aligns the insurance industry with a social mission of health protection rather than profit extraction. However, it’s not a panacea; careful implementation and parallel reforms would be needed to realize the full potential (for example, ensuring nonprofits still operate efficiently and tackling the root causes of high medical costs in the US).

==== It’s worth noting that the choice need not be a stark binary between today’s for-profit system and an all-or-nothing nonprofit takeover. Hybrid approaches (“a bit of both”) could combine elements of each model to reduce costs for consumers: ====
* Regulated Utility Model: Treat private insurers more like utilities, with strict rate regulation or profit caps. For instance, regulators could enforce a tighter medical loss ratio (say, 90% of premiums must go to care, leaving only 10% for admin/profit) – effectively limiting profits and forcing efficiency. Some states already review and must approve premium increases. Strengthening these oversight mechanisms can protect enrollees from unfairly high premiums.
* Public Option or Medicare Buy-In: The government could offer a public health insurance option (non-profit by design) to compete with private plans. If a public option operates with lower overhead and no profit motive, it could offer lower premiums, pressuring private insurers to trim costs to stay competitive. Similarly, allowing people to buy into Medicare or Medicaid (which run at low administrative cost) could expand coverage and reduce premiums for those who choose those public plans. This mixed system lets private insurers exist, but pushes them to be more cost-effective or focus on supplemental benefits, while the public/non-profit plans set a benchmark.
* Two-Tier Systems: The U.S. could move toward a two-tier health financing system. In a first tier, a basic package of coverage is provided to everyone (either via a public program or mandated non-profit plans), ensuring universal affordable access. This could be funded or administered publicly (like Medicare-for-all-basic) or through tightly regulated non-profit insurers as in Switzerlandcommonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/international-health-policy-center/countries/switzerland#:~:text=age%2C%20and%20disability%20insurance%2C%20made,percent%20of%20spending%20in%202016|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>. A second tier would allow optional private insurance for those who want to purchase upgraded coverage or extras. In such a model, essential health needs are met without profit-driven cost barriers, and the private market can still function on top for supplementary services. This reduces the reliance on for-profit insurers for fundamental coverage and can significantly lower overall insurance costs for the average person (since the basic tier spreads risk across the whole population and eliminates profit margins on that portion).
* Expanded Government Subsidies with Cost Controls: Another mechanism to lower costs for enrollees is through targeted subsidies and price regulation. The ACA’s subsidies help reduce premiums for millions, but they primarily shift costs to the government without directly reducing the underlying price of insurance. To truly cut costs, policies could address provider prices and drug costs (e.g. through Medicare drug price negotiation, hospital rate setting, or reference pricing for services). Lowering the prices that insurers have to pay for medical services would allow them to charge lower premiums. In tandem, reinsurance programs or risk-pooling arrangements (where the government covers the most expensive claims or high-risk individuals) can reduce premiums in the private market by removing some of the costliest risks from insurers’ balance sheets. Indeed, reinsurance or “high-risk pools” funded by the government have been used in ACA marketplaces to bring down premium levels by covering a portion of expensive claims.
* Administrative Simplification: A significant portion of insurance costs comes from complex billing and bureaucracy. Efforts to standardize billing, simplify claims processing, and improve interoperability can cut down on administrative expenses that drive up premiums. For example, moving toward uniform billing codes, one set of comprehensive provider networks, or even a single claims clearinghouse for all payers could achieve some efficiencies of a single-payer system while retaining multiple insurers. Reducing the need for armies of billing clerks on both the insurer and provider side would translate to cost savings for consumers. Studies have found that administrative costs account for as much as 25–30% of U.S. health spending, much higher than in countries with more streamlined systemsjamanetwork.com<ref>{{cite web|title=jamanetwork.com|url=https://jamanetwork.com/channels/health-forum/fullarticle/2760129#:~:text=But%20even%20a%20profit%20margin,health%20care%20workers%20and%20facilities|publisher=jamanetwork.com|access-date=2025-11-30}}</ref>americanprogress.org<ref>{{cite web|title=americanprogress.org|url=https://www.americanprogress.org/article/excess-administrative-costs-burden-u-s-health-care-system/#:~:text=administrative%20costs%2C%20the%20NAM%20report,14|publisher=americanprogress.org|access-date=2025-11-30}}</ref>. Cutting this waste – through technology, simplification, or consolidation – can yield major premium savings.
* Non-Profit Co-ops and Member-Owned Plans: Short of mandating all insurers be non-profit, the government could encourage the growth of member-owned insurance cooperatives. The ACA initially seeded some co-op health plans (consumer-governed, non-profit insurers) to compete in the exchanges, though many struggled or folded due to limited capital and other challenges. Learning from those lessons, new support could be given to establish robust regional or national non-profit insurers (for example, offering federal reinsurance or start-up grants, and ensuring a level playing field). Mutual insurance companies in other sectors (like some life and auto insurers) have successfully operated for decades, often delivering good customer satisfaction and competitive rates because their incentives are aligned with customers. Fostering a non-profit mutual segment in health insurance could give consumers more low-cost choices and prod for-profits to improve value.
* Wellness and Preventive Care Incentives: Another mechanism to ultimately reduce insurance costs is focusing on preventive care and chronic disease management. While this goes beyond the insurance company structure per se, insurers (especially nonprofits or those in value-based arrangements) can invest in keeping people healthier to avoid expensive treatments. If insurers cover wellness programs, care coordination for chronic patients, or social services that improve health, it can lower hospitalization rates and costs in the long run – leading to slower premium growth. For-profit insurers have sometimes been hesitant to invest in long-term health outcomes (since a healthier population in 10 years doesn’t help this quarter’s profits), whereas a non-profit or public insurer with a broader mission would be more willing to fund such initiativesrochesterbeacon.com<ref>{{cite web|title=rochesterbeacon.com|url=https://rochesterbeacon.com/2024/12/09/the-health-insurance-industry-ought-to-be-nonprofit/#:~:text=%E2%96%A0%C2%A0Finally%2C%20think%20about%20the%20alignment,contribute%20to%20a%20healthier%20society|publisher=rochesterbeacon.com|date=2024-12-09|access-date=2025-11-30}}</ref>. Over time, a healthier risk pool means lower claims expenses and thus lower premiums for all enrollees.

 Figure: '''Combined Annual Profits of Top Five U.S. Health Insurers Since the ACA (2010–2023).''' This chart illustrates how the net income of major insurers skyrocketed after 2010, roughly '''230% growth in annual profits''' since the ACA’s implementationtruthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=America%E2%80%99s%20largest%20health%20insurers%20have,medical%20claims%20from%20its%20policyholders|publisher=truthout.org|access-date=2025-11-30}}</ref>. UnitedHealth Group (orange) leads with the largest share of industry profits. Such profits – totaling '''$371+ billion''' over 2010–2023truthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=America%E2%80%99s%20largest%20health%20insurers%20have,medical%20claims%20from%20its%20policyholders|publisher=truthout.org|access-date=2025-11-30}}</ref> – represent funds that could alternatively be used to '''lower premiums or improve coverage''' if the industry were structured as non-profit.

==== As highlighted above, the magnitude of insurance company profits in the past decade is enormous, and it has direct implications for what could be achieved if those funds were redirected. Since the ACA took effect, private insurers’ revenues and enrollment have expanded (due to the individual mandate, Medicaid expansion, and marketplace subsidies), giving them a much larger premium base to earn profits fromtruthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=Securities%20and%20Exchange%20Commission%20and,other%20disclosure%20forms|publisher=truthout.org|access-date=2025-11-30}}</ref>. The result: record profits year after year. By 2024, the top five insurers’ combined annual profit was around $60–70 billion, up from about $18 billion in 2010 (before ACA) – an increase of roughly 230% in yearly profit generationtruthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=America%E2%80%99s%20largest%20health%20insurers%20have,medical%20claims%20from%20its%20policyholders|publisher=truthout.org|access-date=2025-11-30}}</ref>. Over 2010–2024 they accrued $9 trillion in revenuetruthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=Insurers%20garnered%20these%20profits%20as,which%20acquired%20Aetna%20in%202018|publisher=truthout.org|access-date=2025-11-30}}</ref>, of which $371 billion became net incometruthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=America%E2%80%99s%20largest%20health%20insurers%20have,medical%20claims%20from%20its%20policyholders|publisher=truthout.org|access-date=2025-11-30}}</ref> rather than being spent on health care. ====

What could be done with these funds if they weren’t treated as private profit? In a non-profit or publicly oriented model, that money could be deployed in several ways beneficial to enrollees:
* Premium Reduction: The most straightforward impact would be to charge lower premiums. If insurers only aimed to cover costs (claims + reasonable admin) without taking profit, premium prices could be set lower. Even a 5% reduction (roughly equivalent to eliminating a typical profit marginjamanetwork.com<ref>{{cite web|title=jamanetwork.com|url=https://jamanetwork.com/channels/health-forum/fullarticle/2760129#:~:text=,Advantage%20program%20for%20older%20people|publisher=jamanetwork.com|access-date=2025-11-30}}</ref>) is meaningful when annual family premiums are ~$26,000truthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=This%20year%2C%20the%20average%20health,risen%2052%20percent%2C%20outpacing%20inflation|publisher=truthout.org|access-date=2025-11-30}}</ref> – that’s about $1,300 saved per family per year, which could be used for other household needs. Some nonprofit insurers might go further, using any surplus to issue rebate checks or credit premium holidays to members in profitable years. In fact, the ACA’s MLR rebate provision already forced insurers to return billions to consumers in years they failed to spend enough on medical care; expanding such mechanisms ensures excess earnings go back to the people paying the premiumscommonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/sites/default/files/2019-07/Hall_MLR_rule_protects_consumers_insurers.pdf#:~:text=,capping%20insurers%27%20profits%20and%20overhead|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>.
* Lower Out-of-Pocket Costs and Better Benefits: Redirected “profit” money could also be used to enhance coverage. For example, insurers could lower deductibles and co-pays, or include extra services (like dental, vision, or more robust mental health coverage) without raising premiums. If an insurer normally has a profit margin of a few hundred dollars per member (as seen with UnitedHealth’s ~$460 profit per member in 2023), that amount could instead fund, say, a reduction in the annual deductible by a few hundred dollars, directly saving money for patients when they use care. Over a large population, tens of billions in freed funds could eliminate many minor out-of-pocket expenses entirely (for instance, covering preventative services at no cost, providing free chronic disease supplies like insulin pumps, etc.). Essentially, the value created by the insurance pool would be returned to the pool in the form of richer benefits, improving affordability of care.
* Community Health Investments: Non-profit insurers, especially if overseen to fulfill a social mission, might allocate a portion of former “profits” to community health programs. This could include investing in clinics in underserved areas, public health campaigns (e.g. anti-obesity or smoking cessation programs), or social services that keep people healthier (food security, safe housing initiatives, etc.). While these are not traditional insurance pay-outs, they can reduce claims in the long run and improve population health. For example, funding a diabetes prevention program today could mean fewer expensive complications (and claims) five years down the line. For-profit firms under shareholder pressure often avoid such longer-term investments; nonprofits would have more latitude to pursue them, as noted by public health expertsrochesterbeacon.com<ref>{{cite web|title=rochesterbeacon.com|url=https://rochesterbeacon.com/2024/12/09/the-health-insurance-industry-ought-to-be-nonprofit/#:~:text=%E2%96%A0%C2%A0Finally%2C%20think%20about%20the%20alignment,contribute%20to%20a%20healthier%20society|publisher=rochesterbeacon.com|date=2024-12-09|access-date=2025-11-30}}</ref>. In the big picture, using a slice of the $371 billion that went to profits for public health could yield large societal benefits.
* Reserves and Price Stability: It’s also possible that instead of immediate distribution, some profit-derived funds would bolster reserves of non-profit insurers. Non-profits still need financial stability (especially to pay claims in high-cost years). Strong reserves can prevent large premium spikes in bad years (for instance, if a pandemic or new expensive treatments drive up costs unexpectedly). In a mutual model, building capital during profitable periods is a way to keep premiums smoother over time, benefiting consumers with more price stability. For example, rather than paying windfall profits to shareholders when times are good, a nonprofit insurer could hold that surplus in a rainy-day fund – which might have prevented some of the big premium hikes we’ve seen after insurers underpriced ACA plans early on. Over a decade, a non-profit insurer might accumulate enough cushion to then moderate premium increases or even reduce premiums for a year as a dividend to members.

It’s important to stress that redirecting insurer profits, by itself, would modestly lower costs but not solve the entire affordability problem. Even if that full $371 billion (since 2010) had gone back to consumers, U.S. health spending is so large (around $4+ trillion per year recentlyrochesterbeacon.com<ref>{{cite web|title=rochesterbeacon.com|url=https://rochesterbeacon.com/2024/12/09/the-health-insurance-industry-ought-to-be-nonprofit/#:~:text=and%2C%20more%20generally%2C%20America%20benefits,worthwhile%20projects%2C%20such%20as%20infrastructure|publisher=rochesterbeacon.com|date=2024-12-09|access-date=2025-11-30}}</ref>) that it would be a few percent of total expenditures. The systemic issues of high medical prices and administrative complexity would still need to be addressed to bend the cost curve substantially. However, those profits do represent real money paid by consumers and taxpayers that yielded no health benefit – so reclaiming it for public benefit is certainly worthwhile. It could make insurance more affordable at the margins and, coupled with deeper reforms, contribute to a more sustainable system.

==== Transforming all health insurance companies into non-profit entities is an ambitious idea aimed at realigning the industry with the public interest. In theory, removing the profit motive would lower premiums, improve coverage, and reduce the adversarial behavior (like excessive claim denials) that policyholders currently endurerochesterbeacon.com<ref>{{cite web|title=rochesterbeacon.com|url=https://rochesterbeacon.com/2024/12/09/the-health-insurance-industry-ought-to-be-nonprofit/#:~:text=%E2%96%A0%C2%A0First%2C%20consider%20the%20focus%20on,pocket%20costs%20for%20policyholders|publisher=rochesterbeacon.com|date=2024-12-09|access-date=2025-11-30}}</ref>. Other developed countries show that you can have privately delivered insurance that is tightly regulated or non-profit and achieves universal coverage with lower administrative costsjamanetwork.com<ref>{{cite web|title=jamanetwork.com|url=https://jamanetwork.com/channels/health-forum/fullarticle/2760129#:~:text=But%20even%20a%20profit%20margin,health%20care%20workers%20and%20facilities|publisher=jamanetwork.com|access-date=2025-11-30}}</ref>commonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/international-health-policy-center/countries/switzerland#:~:text=age%2C%20and%20disability%20insurance%2C%20made,percent%20of%20spending%20in%202016|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>. At the very least, the question shines a light on how much of Americans’ premium dollars are siphoned to profits and overhead rather than actual health care. ====

Even if a fully non-profit model isn’t immediately attainable, there are numerous mechanisms to reduce insurance costs for enrollees in the nearer term. Stronger regulations (like stricter medical loss ratio requirements), introduction of a public option, competitive pressure from non-profit plans, and direct cost control strategies can all push premiums down or slow their growth. Moreover, focusing insurers (whether for-profit or not) on value-based care, preventive health, and administrative simplification will help ensure that the maximum share of our national health spending actually goes to keeping people healthy. The ACA began to implement some of these ideas – for example, it capped insurer profit margins and provided subsidies – but the past decade has also shown that insurers can thrive under those rules, sometimes at consumers’ expensetruthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=Securities%20and%20Exchange%20Commission%20and,other%20disclosure%20forms|publisher=truthout.org|access-date=2025-11-30}}</ref>truthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=This%20year%2C%20the%20average%20health,risen%2052%20percent%2C%20outpacing%20inflation|publisher=truthout.org|access-date=2025-11-30}}</ref>.

Reimagining the financial structure of insurance to prioritize patients over profits could yield a more equitable and cost-effective system. By converting profits into consumer benefits, a non-profit insurance model (or a hybrid with strong public options) would essentially return wealth from shareholders to the population of people paying into the health care system. It’s a way of saying that health insurance should be treated less as a high-return corporate enterprise and more as a social good or utility. Combined with robust cost-control policies and coverage expansions, this approach could help bend the cost curve and make quality health care more affordable for everyone.

Ultimately, the goal is a system where the trillions we spend on health care deliver real value in health outcomes and financial protection – rather than generating billions in profit while families struggle with medical bills. Moving toward non-profit insurers and related reforms could be a powerful step in that direction, ensuring that any surplus in the system finds its way back to patients, enrollees, and the improvement of health services instead of into shareholders’ pocketsrochesterbeacon.com<ref>{{cite web|title=rochesterbeacon.com|url=https://rochesterbeacon.com/2024/12/09/the-health-insurance-industry-ought-to-be-nonprofit/#:~:text=%E2%96%A0%C2%A0First%2C%20consider%20the%20focus%20on,pocket%20costs%20for%20policyholders|publisher=rochesterbeacon.com|date=2024-12-09|access-date=2025-11-30}}</ref>rochesterbeacon.com<ref>{{cite web|title=rochesterbeacon.com|url=https://rochesterbeacon.com/2024/12/09/the-health-insurance-industry-ought-to-be-nonprofit/#:~:text=%E2%96%A0%C2%A0Second%2C%20there%20is%20the%20matter,invest%20in%20preventive%20care%20programs|publisher=rochesterbeacon.com|date=2024-12-09|access-date=2025-11-30}}</ref>.

Sources:
* Santoro, H. (2024). Top 5 US Health Insurers’ Annual Profits Jumped 230 Percent Since ACA’s Passage. Truthout/The Levertruthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=America%E2%80%99s%20largest%20health%20insurers%20have,medical%20claims%20from%20its%20policyholders|publisher=truthout.org|access-date=2025-11-30}}</ref>truthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=This%20year%2C%20the%20average%20health,risen%2052%20percent%2C%20outpacing%20inflation|publisher=truthout.org|access-date=2025-11-30}}</ref>.
* Reinhardt, U. (2017). Where Does the Health Insurance Premium Dollar Go? JAMA Health Forumjamanetwork.com<ref>{{cite web|title=jamanetwork.com|url=https://jamanetwork.com/channels/health-forum/fullarticle/2760129#:~:text=|publisher=jamanetwork.com|access-date=2025-11-30}}</ref>jamanetwork.com<ref>{{cite web|title=jamanetwork.com|url=https://jamanetwork.com/channels/health-forum/fullarticle/2760129#:~:text=But%20even%20a%20profit%20margin,health%20care%20workers%20and%20facilities|publisher=jamanetwork.com|access-date=2025-11-30}}</ref>.
* Batabyal, A.A. (2024). The health insurance industry ought to be nonprofit. Rochester Beacon (Op-ed)rochesterbeacon.com<ref>{{cite web|title=rochesterbeacon.com|url=https://rochesterbeacon.com/2024/12/09/the-health-insurance-industry-ought-to-be-nonprofit/#:~:text=%E2%96%A0%C2%A0Second%2C%20there%20is%20the%20matter,invest%20in%20preventive%20care%20programs|publisher=rochesterbeacon.com|date=2024-12-09|access-date=2025-11-30}}</ref>rochesterbeacon.com<ref>{{cite web|title=rochesterbeacon.com|url=https://rochesterbeacon.com/2024/12/09/the-health-insurance-industry-ought-to-be-nonprofit/#:~:text=%E2%96%A0%C2%A0Finally%2C%20think%20about%20the%20alignment,contribute%20to%20a%20healthier%20society|publisher=rochesterbeacon.com|date=2024-12-09|access-date=2025-11-30}}</ref>.
* Commonwealth Fund (2017). Big Five Health Insurers’ Membership and Revenue Trendstruthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=These%20five%20insurers%20control%20over,helped%20Americans%20buy%20private%20insurance|publisher=truthout.org|access-date=2025-11-30}}</ref>.
* Commonwealth Fund (2020). International Health System Profile – Switzerlandcommonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/international-health-policy-center/countries/switzerland#:~:text=age%2C%20and%20disability%20insurance%2C%20made,percent%20of%20spending%20in%202016|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>.
* Center for American Progress (2022). Excess Administrative Costs Burden the U.S. Health Care Systemamericanprogress.org<ref>{{cite web|title=americanprogress.org|url=https://www.americanprogress.org/article/excess-administrative-costs-burden-u-s-health-care-system/#:~:text=Medicare%20and%20Medicaid%20hover%20around,relatively%20high%20health%20expenditures%2C%20the|publisher=americanprogress.org|access-date=2025-11-30}}</ref>.
* Kaiser Family Foundation (2023). 2024 Medical Loss Ratio Rebatescommonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/sites/default/files/2019-07/Hall_MLR_rule_protects_consumers_insurers.pdf#:~:text=,capping%20insurers%27%20profits%20and%20overhead|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>. (ACA mandate capping insurer profits/overhead).
* GAO & KFF data on premium trends and market concentrationtruthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=This%20year%2C%20the%20average%20health,risen%2052%20percent%2C%20outpacing%20inflation|publisher=truthout.org|access-date=2025-11-30}}</ref>truthout.org<ref>{{cite web|title=truthout.org|url=https://truthout.org/articles/top-5-us-health-insurers-annual-profits-jumped-230-percent-since-acas-passage/#:~:text=These%20five%20insurers%20control%20over,helped%20Americans%20buy%20private%20insurance|publisher=truthout.org|access-date=2025-11-30}}</ref>.