What happened to those greedy insurance companies?

maxiep · Oct 25, 2009

http://news.yahoo.com/s/ap/20091025...jA3luX3RvcF9zdG9yaWVzBHNsawNmYWN0Y2hlY2toZWE-

FACT CHECK: Health insurer profits not so fat

By CALVIN WOODWARD, Associated Press Writer Calvin Woodward, Associated Press Writer – 47 mins ago

WASHINGTON – Quick quiz: What do these enterprises have in common? Farm and construction machinery, Tupperware, the railroads, Hershey sweets, Yum food brands and Yahoo? Answer: They're all more profitable than the health insurance industry.

In the health care debate, Democrats and their allies have gone after insurance companies as rapacious profiteers making "immoral" and "obscene" returns while "the bodies pile up."

Ledgers tell a different reality. Health insurance profit margins typically run about 6 percent, give or take a point or two. That's anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones.

Profits barely exceeded 2 percent of revenues in the latest annual measure. This partly explains why the credit ratings of some of the largest insurers were downgraded to negative from stable heading into this year, as investors were warned of a stagnant if not shrinking market for private plans.

Insurers are an expedient target for leaders who want a government-run plan in the marketplace. Such a public option would force private insurers to trim profits and restrain premiums to compete, the argument goes. This would "keep insurance companies honest," says President Barack Obama.

The debate is loaded with intimations that insurers are less than straight, when they are not flatly accused of malfeasance.

They may not have helped their case by commissioning a report that looked primarily at the elements of health care legislation that might drive consumer costs up while ignoring elements aimed at bringing costs down. Few in the debate seem interested in a true balance sheet.

But in pillorying insurers over profits, the critics are on shaky ground. A look at some claims, and the numbers:

THE CLAIMS

_"I'm very pleased that (Democratic leaders) will be talking, too, about the immoral profits being made by the insurance industry and how those profits have increased in the Bush years." House Speaker Nancy Pelosi, D-Calif., who also welcomed the attention being drawn to insurers' "obscene profits."

_"Keeping the status quo may be what the insurance industry wants their premiums have more than doubled in the last decade and their profits have skyrocketed." Maryland Rep. Chris Van Hollen, member of the Democratic leadership.

_"Health insurance companies are willing to let the bodies pile up as long as their profits are safe." A MoveOn.org ad.

THE NUMBERS:

Health insurers posted a 2.2 percent profit margin last year, placing them 35th on the Fortune 500 list of top industries. As is typical, other health sectors did much better — drugs and medical products and services were both in the top 10.

The railroads brought in a 12.6 percent profit margin. Leading the list: network and other communications equipment, at 20.4 percent.

HealthSpring, the best performer in the health insurance industry, posted 5.4 percent. That's a less profitable margin than was achieved by the makers of Tupperware, Clorox bleach and Molson and Coors beers.

The star among the health insurance companies did, however, nose out Jack in the Box restaurants, which only achieved a 4 percent margin.

UnitedHealth Group, reporting third quarter results last week, saw fortunes improve. It managed a 5 percent profit margin on an 8 percent growth in revenue.

Van Hollen is right that premiums have more than doubled in a decade, according to a Kaiser Family Foundation study that found a 131 percent increase.

But were the Bush years golden ones for health insurers?

Not judging by profit margins, profit growth or returns to shareholders. The industry's overall profits grew only 8.8 percent from 2003 to 2008, and its margins year to year, from 2005 forward, never cracked 8 percent.

The latest annual profit margins of a selection of products, services and industries: Tupperware Brands, 7.5 percent; Yahoo, 5.9 percent; Hershey, 6.1 percent; Clorox, 8.7 percent; Molson Coors Brewing, 8.1 percent; construction and farm machinery, 5 percent; Yum Brands (think KFC, Pizza Hut, Taco Bell), 8.5 percent.

___

Associated Press writer Tom Murphy in Indianapolis contributed to this report.
Click to expand...

I guess it's time to create public option for airtight food storage products, search engines, chocolate, bleach, beer, 2X4's and threshers and fried chicken, pizza and bad mexican food. You know, since they're so rapacious.

bodyman5001 · Oct 25, 2009

maxiep said: ↑

http://news.yahoo.com/s/ap/20091025...jA3luX3RvcF9zdG9yaWVzBHNsawNmYWN0Y2hlY2toZWE-

I guess it's time to create public option for airtight food storage products, search engines, chocolate, bleach, beer, 2X4's and threshers and fried chicken, pizza and bad mexican food. You know, since they're so rapacious.
Click to expand...

Yum brands sounds like a good name until you get to the end of the three you listed.

KFC yum
Pizza Hut yum
Taco Bell....GROSS

Methinks this article is more likely to help prove my feeling that insurance companies waste too much of my money. OR maybe they hire all their buddies to bleed off profits as salaries. How would an average American know what to think?

Denny Crane · Oct 25, 2009

Anyone really think that the govt. taking all the health care insurance profits from these companies is going to cut the massive deficits?

MARIS61 · Oct 25, 2009

bodyman5001 said: ↑

Yum brands sounds like a good name until you get to the end of the three you listed.

KFC yum
Pizza Hut yum
Taco Bell....GROSS

Methinks this article is more likely to help prove my feeling that insurance companies waste too much of my money. OR maybe they hire all their buddies to bleed off profits as salaries. How would an average American know what to think?
Click to expand...

In the future, all restaurants are Taco Bell.

barfo · Oct 25, 2009

maxiep said: ↑

I guess it's time to create public option for airtight food storage products, search engines, chocolate, bleach, beer, 2X4's and threshers and fried chicken, pizza and bad mexican food. You know, since they're so rapacious.
Click to expand...

beer, yes. None of that other shit is a neccesity.

barfo

maxiep · Oct 25, 2009

Samuelson's take: http://www.realclearpolitics.com/articles/2009/10/26/the_public_plan_delusion_98860.html

BLAZER PROPHET · Oct 26, 2009

MARIS61 said: ↑

In the future, all restaurants are Taco Bell.
Click to expand...

I saw that movie!

MrJayremmie · Oct 29, 2009

On a similar topic...

Support broad in U.S. for public healthcare option

http://news.yahoo.com/s/nm/20091028/pl_nm/us_usa_healthcare_option

maxiep · Oct 29, 2009

MrJayremmie said: ↑

On a similar topic...

Support broad in U.S. for public healthcare option

http://news.yahoo.com/s/nm/20091028/pl_nm/us_usa_healthcare_option
Click to expand...

The level of support depends how the question is asked. Words are important.

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What happened to those greedy insurance companies?

maxiep RIP Dr. Jack

bodyman5001 Genius

Denny Crane It's not even loaded! Staff Member Administrator

MARIS61 Real American

barfo triggered obsessive commie pinko boomer maniac Staff Member Global Moderator

maxiep RIP Dr. Jack

BLAZER PROPHET Well-Known Member

MrJayremmie Well-Known Member

maxiep RIP Dr. Jack

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What happened to those greedy insurance companies?

Moderators

maxiep RIP Dr. Jack

bodyman5001 Genius

Denny Crane It's not even loaded! Staff Member Administrator

MARIS61 Real American

barfo triggered obsessive commie pinko boomer maniac Staff Member Global Moderator

maxiep RIP Dr. Jack

BLAZER PROPHET Well-Known Member

MrJayremmie Well-Known Member

maxiep RIP Dr. Jack

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