When something only surfaces at stressful moments, the details can get blurry. Who pays for it? Who chooses the plan? And why do premiums keep rising? In a recent episode of the podcast Health Beyond Coverage, Steve Cain, CEO of UnitedHealthcare of California, unpacks the basics of commercial insurance—how it’s funded, how it’s designed, and why cost pressure is building right now.
ommercial health insurance covers millions of working Americans—but for most, it’s something they enroll in, glance at, and rarely think about again—until a bill doesn’t look right.
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How Commercial Insurance Differs from Medicare and Medi-Cal
Commercial insurance often gets lumped into “health insurance” as one big category, but Cain draws a clear line between employer/employee-funded plans and public programs.
Medicare and Medi-Cal (California’s Medicaid program) are funded with government dollars and tied to eligibility rules—age in Medicare’s case, and income rules for Medi-Cal. Commercial insurance, by contrast, is funded by employers and employees and can offer more flexibility in network options and benefit design.
But public programs and commercial coverage don’t operate in isolation. Often when one side tightens, the other needs to absorb the pressure.
Cain notes that California has a large Medi-Cal population, and points to projections that changes in eligibility or affordability could push some people off coverage. If more people become uninsured but still need care, that care doesn’t disappear—it shows up elsewhere in the system.
His shorthand for the downstream effect is vivid: “It’s a balloon squeeze,” he says. When providers face pressure from public program reimbursement or rising uncompensated care, they can look to commercial rates as the place to try to make up the difference. That, in turn, increases premium pressure for employers.
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Inside Commercial Coverage: UnitedHealthcare CEO Steve Cain on Costs, Plan Design, and What’s Next
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What Commercial Insurance is—and Who it’s Really Built for
Cain starts with a simple definition: “Commercial health insurance is usually covered through either the employer or the individual,” he explains. “And that’s who funds that insurance.”
In the most common situation—employer-sponsored coverage—the employer pays the larger share of the premium and employees contribute as well. And there’s something that most people don’t know. Employers have a long list when choosing insurance plans.
“They’re purchasing and deciding on a vast array of choices,” Cain says—benefit designs, networks, and funding arrangements—usually with help from a broker or consultant who works with carriers like UnitedHealthcare to select what best matches a company’s workforce.
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What’s in a Typical Commercial Plan
With the big-picture cost drivers on the table, Cain moves to the types of plans most people are used to: PPOs and HMOs.
In a PPO, he says, your plan includes a premium, a deductible, a copay for services, and an out-of-pocket limit that caps what you’ll pay in a year. Your plan includes a specific network—where staying in the network generally keeps costs lower—and a prescription drug formulary, which is the plan’s list of covered medications.
HMOs, he explains, tend to be more structured. Members choose a primary care physician who helps direct care, and staying within a medical group is critical to how the plan functions. The tradeoff he describes is familiar: PPOs offer broader flexibility, but “you’re going to have a little bit more cost share.”
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What Actually Drives the Cost of Commercial Insurance
This is the heart of the issue—the part Cain hopes listeners understand. “Many people think insurance carriers are why healthcare is expensive,” he says. “But in reality, we’re largely passing through the cost from the delivery system.”
He offers two ways to understand that.
First, there’s the Medical Loss Ratio requirement (often shortened to MLR), which Cain describes as a rule intended to keep plans focused on spending premium dollars on medical care and quality improvement—not overhead.
In large group commercial insurance, he says, “85 cents of every healthcare dollar needs to be spent on quality improvement and medical care.” He adds that if a carrier spends less than that threshold, it may owe money back in the form of rebates to employers.
Second, Cain breaks down a “healthcare dollar” in broad categories. The largest share, he says, goes to the core of the delivery system—hospital and physician services.
“65 cents of every healthcare dollar is…inpatient hospital, outpatient hospital, and physician services,” Cain says, while 15 cents goes to prescription drugs, and another portion goes to ancillary services. The remaining slice covers health-plan administration and a smaller amount tied to margin.
Cain acknowledges that insurance carriers also have a role in helping control the cost of premiums through navigating care, improving access, and making the system easier to use. But he’s explicit that premium increases often track what providers charge and what care costs in the market.
Using Coverage
UnitedHealthcare’s work in commercial coverage is ultimately about making healthcare easier to use—not just easier to carry. As Cain describes it, that means building plan options with employers, curating networks, and investing in tools that help members understand their benefits and costs before care happens. The goal is a simpler, more navigable experience—so coverage feels less like fine print and more like practical support when people need it.
To learn more about plan resources and commercial coverage, visit www.uhc.com.
Episode 2 - Commercial Insurance
Episode 2 - Commercial Insurance
By Josie Brocato on January 16, 2026
What Actually Drives the Cost of Commercial Insurance
This is the heart of the issue—the part Cain hopes listeners understand. “Many people think insurance carriers are why healthcare is expensive,” he says. “But in reality, we’re largely passing through the cost from the delivery system.”
He offers two ways to understand that.
First, there’s the Medical Loss Ratio requirement (often shortened to MLR), which Cain describes as a rule intended to keep plans focused on spending premium dollars on medical care and quality improvement—not overhead.
In large group commercial insurance, he says, “85 cents of every healthcare dollar needs to be spent on quality improvement and medical care.” He adds that if a carrier spends less than that threshold, it may owe money back in the form of rebates to employers.
Second, Cain breaks down a “healthcare dollar” in broad categories. The largest share, he says, goes to the core of the delivery system—hospital and physician services.
“65 cents of every healthcare dollar is…inpatient hospital, outpatient hospital, and physician services,” Cain says, while 15 cents goes to prescription drugs, and another portion goes to ancillary services. The remaining slice covers health-plan administration and a smaller amount tied to margin.
Cain acknowledges that insurance carriers also have a role in helping control the cost of premiums through navigating care, improving access, and making the system easier to use. But he’s explicit that premium increases often track what providers charge and what care costs in the market.
How Employers and Insurers Design Benefits Together
Behind every plan is a collaborative process: carriers working with employers and their brokers to understand needs, surface pain points, and set priorities for the year ahead.
On the insurance carrier side, the work is part administration, part problem-solving—looking at what’s happening in the population, spotting gaps in care and opportunities for better support, and translating those insights into plan changes. Cain describes “health plan reviews” as one way that collaboration happens: sitting down together, using data as a starting point, and shaping benefits around what employees are likely to need and use.
What Comes Next—and What Members Can Do Now
Those plan decisions are increasingly shaped by broader forces in healthcare right now: there’s AI moving deeper into claims, advocacy, and navigation; persistent pricing pressure from hospitals and medical groups; rising utilization; and a broader push toward value-based care—paying providers for outcomes instead of volume.
In response to the push for clearer, more usable coverage, Cain highlights Surest—a UnitedHealthcare option built to make costs easier to see up front. It’s meant to reduce deductible confusion and lean toward a more predictable copay-style experience, so members can check what they’ll pay before they get care.
But even with newer tools and plan designs, the day-to-day experience still comes down to how members use their coverage. Cain emphasizes the basics that can make a plan easier to navigate: know your benefits, use the plan app for support and transparency, and stay in the network when you can. He also points to preventive care and primary care as ways to stay engaged—an approach he says may support better outcomes.
Using Coverage
UnitedHealthcare’s work in commercial coverage is ultimately about making healthcare easier to use—not just easier to carry. As Cain describes it, that means building plan options with employers, curating networks, and investing in tools that help members understand their benefits and costs before care happens. The goal is a simpler, more navigable experience—so coverage feels less like fine print and more like practical support when people need it.
To learn more about plan resources and commercial coverage, visit www.uhc.com.
Know your benefits, use the plan app for support and transparency, and stay in the network when you can.
What’s in a Typical Commercial Plan
With the big-picture cost drivers on the table, Cain moves to the types of plans most people are used to: PPOs and HMOs.
In a PPO, he says, your plan includes a premium, a deductible, a copay for services, and an out-of-pocket limit that caps what you’ll pay in a year. Your plan includes a specific network—where staying in the network generally keeps costs lower—and a prescription drug formulary, which is the plan’s list of covered medications.
HMOs, he explains, tend to be more structured. Members choose a primary care physician who helps direct care, and staying within a medical group is critical to how the plan functions. The tradeoff he describes is familiar: PPOs offer broader flexibility, but “you’re going to have a little bit more cost share.”
How Employers and Insurers Design Benefits Together
Behind every plan is a collaborative process: carriers working with employers and their brokers to understand needs, surface pain points, and set priorities for the year ahead.
On the insurance carrier side, the work is part administration, part problem-solving—looking at what’s happening in the population, spotting gaps in care and opportunities for better support, and translating those insights into plan changes. Cain describes “health plan reviews” as one way that collaboration happens: sitting down together, using data as a starting point, and shaping benefits around what employees are likely to need and use.