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

==== 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.