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

==== 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.