how will demo explain their lies about insurance companys profits now that the truth is out?
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.
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demos will not admit that they dont make huge% of profits,they can not demonize them if they do.im happy with my coverage.i dont make a lot of money under 25,000.00a year but my employer has great benefits,demos just dont want to pay for it them self.if your disabled or of a certain age you get medicade or medicare.they want to insure all those who wont work ,druggies ,bums ,perverts etc.
November 21st, 2009 at 5:35 am
THey’ll distract the public with comments about Rush.
Not enough voices are keeping this administration and congress honest.
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November 21st, 2009 at 6:13 am
LOL, only gullible fools would believe those ledgers. People are so dumb they believe anything those insurance companies put forth.
We’ll eventually have healthcare in this country and one day in the future it will include a robust public option.
Then the insurance companies will have to compete in order to get business. They will be out billions in over priced profits. Which is a good thing.
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November 21st, 2009 at 6:28 am
The truth doesn’t matter. It’s what you can sell to the American people TODAY that matters. I’m hoping that by the end of it all we get tort reform and the ability to shop cross state for insurance. That would be huge.
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November 21st, 2009 at 6:54 am
Interesting, I would have thought that Yahoo!Answers was too low volume for a paid advocate to bother with.
To answer your question, the Democrats in congress will not bother, as their lies are many. To the liberal mindset it is okay to lie, cheat, and steal if you are working for a "good" end.
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November 21st, 2009 at 7:23 am
they can’t, but they also know most people don’t know the difference between profit and profit margin….this is why oil companies are such easy targets also !!!!
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November 21st, 2009 at 7:47 am
Irrelevant, highly convenient and suspect.
How is that in Japan an MRI machine can be made for $1200, yet costs more than ten times that for US doctors? Same machine, same quality, just different pricing structure.
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November 21st, 2009 at 7:58 am
how will demo explain their lies about insurance companys profits now that the truth is out?
Easy – that took 3 seconds to read and made sense – they just throw a weeks’ worth of reading a’ la the BILL at you with 12 hours of digestion and hope you had "other plans" that weekend
footnote – explain, lies and dems in the same sentence?
ha!
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history
November 21st, 2009 at 8:19 am
Your question assumes that sick care is a privilege that is accessible only to the rich or those fortunate enough to have good insurance coverage. (And which, by the way, depends upon one remaining healthy so as not to lose their coverage or be priced out of it when it is needed. ) There should be no amount of profit in health care. We need Medicare for all. It is my fervent desire that all health insurance companies have to find another way to make a living.
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November 21st, 2009 at 8:53 am
The Health debate is going on since 60 years. The debate is lead by misinformation, outright lies (death panel) and demagogy
In the meantime, the costs for our Health Industry is 20% of our GDP, a suicidal percentage in the best of times, slowly strangling the country.
Inflammation from the right or the left is not helping anybody.
The Health Insurance Industry is a corrupt entity. GM didn’t make any profits ether and was so badly managed, it killed our car industry, but the CEO made more money then god
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November 21st, 2009 at 9:20 am
demos will not admit that they dont make huge% of profits,they can not demonize them if they do.im happy with my coverage.i dont make a lot of money under 25,000.00a year but my employer has great benefits,demos just dont want to pay for it them self.if your disabled or of a certain age you get medicade or medicare.they want to insure all those who wont work ,druggies ,bums ,perverts etc.
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