I have to admit, Dr Satch is being extremely lazy these days. I just didn’t feel like writing my own blog and why should I? Someone else did the fact checking about the IMMORAL PROFITS of the health insurers and here is a pretty good comparison to other industries.
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.