How Big Are Health Insurance Company Profits?

This is from the Associated Press:

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.

Comments (7)

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  1. Ken says:

    Another good fact check on the Obama White House on the part of AP.

  2. Devon Herrick says:

    People like to accuse insurers of being stingy. But no business model would long survive if customers could demand infinite benefits for a fixed monthly fee. All-you-can-eat buffets have rationing mechanisms — generally in the form of lower food quality. That is why consumers need to control more of their own health care dollars. That way consumers decide which care holds value and which does not.

  3. Neil H. says:

    The White House approach to a health care discussion is to make their opponetnts out to be villains and the demonize them.

  4. Maguire says:

    Our current health care system cannot survive as long as insurance companies have this much of a strong arm. I can understand the business perspective that many people have when debating health care and insurance, but our for-profit system is literally killing us by being as selective about our health as those opposed to a public option believe the public option would be. As our market based system currently stands, only those who are making sizable incomes will receive proper care if our system remains in an unending upward curve.
    “The costs keep rising because the health care system is profit driven. The competition at this time is driven by bottom lines, not the quality of service or even consideration of consumer needs.” (Eve Mor),com_sectionex/Itemid,200076/id,8/view,category/#catid107

  5. John R. Graham says:

    Actually, one could more appropriately say that the costs keep rising because the health-care system is non-profit driven. About 85% of hospitals are non-profit, and about half of privately insured lives are covered by non-profit insurers. In other sectors, which are ruthlessly profit driven (semi-conductors, fast food, pencils) cost have gone down. Non-profit incentives simply cannnot drive down costs. Come to think of it: 50 years ago, 100% of privately insured lives were covered by non-profit insurers. How did for-profit insurers, which have a disadvantage in that they pay corporate income tax, gain ground? Because health costs went up so much, insurers needed access to capital markets to remain solvent. Because these investors cannot submit medical claims to the insurer (as the policyholders do), they claim profit instead. All things equal, it’s win-win.

  6. Robert P. Berkowitz says:

    There is no reason for a health insurance company to exist. They do not produce anything of value so how can they compete? Competition should be between medical care providers. The reported profits do not include bonuses, enormous salaries and stock options when cashed in.

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