One favorite theme of the HL is that the profits of health care insurers are "obscene." Nancy Pelosi called the profits "immoral" and "obscene," while Democratic congressman Chris Van Hollen said that insurance industry profits have "skyrocketed." The worst (as usual) is moveon.org, which said in an ad that "Health insurance companies are willing to let the bodies pile up as long as their profits are safe."
They're all wrong.
Check out the facts here. According to a study by Fortune magazine:
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.
Gosh, 2.2 percent. Can't have that, can we?
But, you say, that was last year only -- what about the Bush years, when greed ran rampant?
Sorry, wrong again:
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.
I wish I could tell you how many times friends of mine, apparently rational, have railed about insurance company profits. To those friends I say this: You know who you are. Please use the comments section of this blog to leave your sincere, heartfelt apologies. In return, I won't gloat.
Much.
