FACT CHECK: Health insurer profits not so fat

Discussion in 'Politics' started by carpro, Oct 25, 2009.

  1. carpro

    carpro
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    http://apnews.myway.com/article/20091025/D9BI4D6O1.html

    FACT CHECK: Health insurer profits not so fat

    Oct 25, 8:37 AM (ET)
    By CALVIN WOODWARD

    WASHINGTON (AP) - 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.
     
  2. carpro

    carpro
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    The Liar-in-Chief leads the demonization onslaught:

     
  3. abcgrad94

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    My guess would be the big DRUG companies are making the profits right now, not the insurance companies.
     
  4. OldRegular

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    Why not post a few numbers for the unbelievers?

    http://apnews.myway.com/article/20091025/D9BI4D6O1.html

    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.
     
  5. Salty

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  6. Nonsequitur

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    Hey, now! That's my line!:thumbs::tongue3::applause:
     
  7. Winman

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    Yep, the Obama administration keeps talking about evil Insurance companies, I have heard him with my own ears. I take that a little personal, as I was an insurance agent for many years. Insurance companies make great whipping boys, nobody likes paying for insurance, but the truth is insurance companies have always operated at about 3-4% profit max. That is very reasonable, and I would not consider that gouging the public whatsoever. They do take in billions, so 3-4% of billions is a lot of money, but they pay nearly all they take in out in operating costs and claims.

    Trial lawyers on the other hand make about 40% (average)on law suits. So, in a million dollar lawsuit they could make $400K or more. Not bad for maybe 100 hours works tops. Heck, if they spent 40 hours per week for a whole year on a case that would still be a great paycheck.

    But who has resisted tort reform? The Democrats. The single biggest contributors to the Democrats for years has been the trial lawyers, that is a fact. They give to Democrats over Republicans about 10 to 1 ratio. That ought to tell folks something right there. And this is why in the original health care bill written by the Democrats not one single word was mentioned about tort reform.

    And the pharmaceutical companies make around 15% profit, much more than insurance companies. The FDA prevents many drugs manufactured overseas with competing with American drug companies, even though these drugs have been used and proven safe for years in modern countries.

    Insurance companies are not the problem, but they make a great scapegoat.
     
    #7 Winman, Oct 28, 2009
    Last edited by a moderator: Oct 28, 2009
  8. Johnv

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    Which begs to ask the question, what is wrong about making a reasonable profit?
     
  9. Salty

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    beacuse those big bad drug insurance companies are beating their profits off the back of the poor people.

    Salty


    ps - should we include lawyers...
     
  10. Winman

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    Yeah, I am not too crazy about the drug companies. You can't watch TV without seeing an ad for some new drug to treat some horrendous ailment. It's a wonder mankind survived through thousands of years. And the side effects are worse than the ailment.

    I am not saying that all drugs are evil and that drugs do not help mankind, they do. But the drug companies push many harmful drugs. I am especially against Gardasil for instance, the drug that is supposed to prevent cervical cancer in young women. I believe over 40 young women have died from this medication in the last several years, and hundreds have suffered permanent disabilities.

    What really bothers me about this drug is that they have pushed to make it mandatory by law for young women to get this shot. I have 6 daughters, so this is a big deal for me.

    There were 28 deaths from Gardasil in 2008 alone.

    http://www.cogforlife.org/gardasildeaths2008.htm

    Merck gave up on this, but they were pushing it aggressively for some time.

    http://www.reuters.com/article/healthNews/idUSN2022501520070221

    Now, I find this inexcusable, they know of many deaths and serious complications from this drug, but yet they lobbied states to make it mandatory. If a toy company makes a product that kills one single child they often pull it off the market immediately. But the drug companies value profits over life.
     
    #10 Winman, Oct 28, 2009
    Last edited by a moderator: Oct 28, 2009
  11. billwald

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    The biggest health service providers are theoretically non-profit so the maybe a more logical approach would be a comparison of the for profit and the non-profit approaches to the problem. Which produces a better product at a lower cost?
     
  12. rbell

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    Are you referring to government as the "theoretically non-profit" entity?

    If not, I have no idea what you're talking about.

    If so, I think there's no question...would you rather have a widget produced by government, or the private sector? That's an easy one.
     
  13. carpro

    carpro
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    Blue Cross is non-profit.
     
  14. rbell

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    OK, so how does that work? (genuinely curious, not argumentative) Are they really non-profit, or is that some kind of accounting gimmick? Are they non-profit in every state?

    Here's the scary stuff: I don't understand the system as it is...and I have no doubt I've got a better grasp than the average idiot congressman. And yet they want to overhaul stuff they don't understand....sheesh.
     
  15. carpro

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    Don't know how it works, but Blue Cross gets tax breaks because of their unique status, giving them a built in advantage over other health insurance companies.

    You'll have to look it up.
     
  16. rbell

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    They sure do get a lot of my money every month to be "non-profit." :D

    But I'd rather them get it than the looters.
     
  17. carpro

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    Here's the strange part.

    Theoritically, both the government and Blue Cross are non-profit with all the built in advantages that gives them and Blue Cross rates continue to climb. How will the government do any better?

    Well, they'll have cost cutting measures that Blue Cross can't get, one might say.

    OK. If such is the case, why doesn't the government take the cost cutting measures and leave the insurance companies alone to take advantage of those measures.

    Answer. It doesn't give the government the control liberals are looking for.

    Is there a moron out there anywhere that actually believes the government can do a better and/or cheaper job of insuring the public than private companies can do, even with all their advantages?

    The bad news for you, rbell, and all other responsibly insured people, is that the governent will take even more of your money than Blue Cross does and will give you less coverage and inferior care in return.
     
    #17 carpro, Oct 29, 2009
    Last edited by a moderator: Oct 29, 2009

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