By NextBestFitInsurer & plan overhead eliminated
The 'net cost of health insurance': premiums minus benefits. It is what private insurers, Medicare Advantage and Part D plans, and Medicaid managed-care plans keep for administration and profit.
Result
−$279.6B
$306.0B → $26.4B
Per resident, per year
−$820
÷ 341.1M people
Per household
−$2,115
÷ 132.2M households
How it's calculated
| # | Step | Arithmetic | Value |
|---|---|---|---|
| 1 | Private health insurers' non-medical spending (CMS) Sources: CMS Office of the Actuary (2025) | $176.5B | |
| 2 | of which: profit (estimate) | $42.0B | |
| 3 | of which: broker commissions & marketing (estimate) | $32.0B | |
| 4 | of which: state premium taxes (estimate) | $18.0B | |
| 5 | of which: claims processing, utilization management, networks, IT, salaries | $176.5B − $42.0B − $32.0B − $18.0B | $84.5B |
| 6 | Medicare Advantage & Part D plan overhead (CMS) Sources: CMS Office of the Actuary (2025) | $57.6B | |
| 7 | Medicaid managed-care plan overhead (CMS) Sources: CMS Office of the Actuary (2025) | $45.5B | |
| 8 | Workers' comp & other programs' overhead (continues) | $26.4B | |
| 9 | Net cost of insurance, 2024 | $306.0B | |
| 10 | Net cost of insurance under the plan | $26.4B | |
| 11 | Eliminated | $26.4B − $306.0B | −$279.6B |
Inputs used
| Input | Kind | Value |
|---|---|---|
| Private health insurer profit (underwriting + fees) | estimate, low confidence | $42.0B |
| Broker & agent commissions and marketing | estimate, low confidence | $32.0B |
| State premium taxes paid by health insurers | estimate, low confidence | $18.0B |
Trade-off: The largest administrative saving, paid for by insurer shutdowns, about 365,000 insurer jobs, and lost services some people value (care management, plan choice).
Sources: CMS Office of the Actuary (2025); NAIC (2024)