The Claims vs. the Facts, Health Insurers Not So Profitable

Posted on October 26, 2009

The AP released a story on Sunday which is likely to get passed over by the main stream media.  It seems those “evil” health insurance companies aren’t making such “obscene profits” as Nancy Pelosi claims.

In their fact checking, the Associated Press found that over the past year, health insurers only had a profit of 2.2%  And their profits from 2003 to 2008 grew only 8.8%.  When compared to other industries their results are small:

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.

Here are some highlights from the AP’s fact checking:

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.

Even better, Ed Morrissey over at Hot Air makes the point that the trial lawyers had a profit margin of 14%, six times larger than the health insurers.  But do we hear about how evil trial lawyers are?  No, because trial lawyers donated over $43 million to Barack Obama’s campaign efforts (his largest industry donor)  and have donated huge amounts to Democrat coffers in general.

So the next time you hear Nancy Pelosi, Harry Reid or President Obama complain about how much money the private health insurers are making, don’t believe them.  Maybe we should ask them why they don’t go after those “evil” lawyers making such “obscene profits” instead.

Posted in: Economy, Health Care