OBJECTIVES: The prevalence of diabetes in the US and its economic burden continue to increase. Improving A1c levels is associated with patient-level cost savings. We combined a claims analysis with estimated cost data from published literature to predict cost savings at a health plan level when patients achieve specific A1c reductions. METHODS: Adult patients with diabetes and continuous health plan enrollment in 2011 were selected from the HealthCore Integrated Research DatabaseSM, representing a large national health insurer. The distribution of A1c levels in this sample was extrapolated to the health plan level. Estimated 1-year all-cause patient-level cost savings (medical plus pharmacy) associated with reducing A1c from ≥7% to <7% (ADA-recommended), as well as from a mean A1c reduction of ≥1%, were taken from published literature. Costs were adjusted to 2011 levels. RESULTS: Among all identified patients mean age was 60.1 years, 47.5% were female, 96.9% had type 2 diabetes, 58.6% had ≥1 OAD fill and 22.9% had ≥1 insulin fill. A1c results were available for 17.0% of patients. Extrapolating the A1c distribution to the health plan level (with 700,000 qualifying patients), 323,895 patients (46.3%) had an A1c ≥7% and 96,556 (13.8%) had an A1c>9%. Mean cost reductions were estimated to be $536 (≥7% to <7%) and $1,169 (1% A1c reduction) per patient. If 25% of patients currently at A1c ≥7% would achieve <7%, the estimated cost savings at the health plan level are $43.4m (±10%: $39.1m to $47.8m). Alternatively, evaluating patients with poor diabetes control (A1c>9%) only, assuming that 50% of these patients experience a mean A1c reduction of ≥1%, the estimated cost savings are $56.4m (±10%: $50.8m to $62.1m). CONCLUSIONS: Modest improvements in A1c levels, whether evaluated across the population or only in patients with poor control, would be associated with substantial cost savings at the health plan level.