Am I seeing things? AP takes on “skyrocketing health insurance industry profits” smear

Posted by: ST on October 26, 2009 at 8:13 pm

Somebody apparently didn’t get their DNC talking points:

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. 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.

Profits barely exceeded 2 percent of revenues in the latest annual measure. This partly explains why the credit ratings of some of the largest insurers were downgraded to negative from stable heading into this year, as investors were warned of a stagnant if not shrinking market for private plans.

Insurers are an expedient target for leaders who want a government-run plan in the marketplace. Such a public option would force private insurers to trim profits and restrain premiums to compete, the argument goes. This would “keep insurance companies honest,” says President Barack Obama.

The debate is loaded with intimations that insurers are less than straight, when they are not flatly accused of malfeasance.

They may not have helped their case by commissioning a report that looked primarily at the elements of health care legislation that might drive consumer costs up while ignoring elements aimed at bringing costs down. Few in the debate seem interested in a true balance sheet.

But in pillorying insurers over profits, the critics are on shaky ground. A look at some claims, and the numbers:

This isn’t unlike the left’s war against so-called “Big Oil” in which all they talk about is the “massive profits” Big Oil takes in … without mentioning how Big Oil pays double that amount in taxes every year. It’s classic leftist strategy: Come up with an idea to “resolve” a “problem” they’ve inflated to extreme distortion and in the process, demonize the alleged “causes” of that problem to death in order to rally Average Joes around to their way of thinking.

I hate getting into class warfare arguments simply because I get sick of the so-called “rich” – which these days pretty much means anyone who works – being demagogued and maligned while the poor are continuously painted as nothing but “victims” of the “rich,” “victims” who deserve their “fair share.” Like most conservatives, I view America as the land of opportunity and despise the liberal belief that says businesses that make a profit should be punished with higher taxes “for the greater good” of all Americans. On the other hand, I’m also well aware that there are businessmen and women out there who are in it to bilk their employees and their customers every chance they get in order to make a buck, and I understand the need for a degree of regulation and punishment for those who do so.

That said, it disgusts me when an industry is demonized solely for a political party to gain traction with voters by promising “freebies” at the expense of the American taxpayer. Yes, the taxpayer – because no matter how much in taxes the government puts on the “Cadillac” healthcare plans, guess who those taxes are going to be passed on to? You.

For whatever issues people have with the health insurance industry – and I’ll acknowledge there are plenty, alot of us would be dead without it. And for all of the left’s blather about alleged “obscene” profit margins, the truth about those profits is an inconvenient reality that they’d rather stay buried along with Obama’s various empty campaign promises about having an “open and honest” and “ideologically diverse” government, along with his numerous pledges made as a candidate about not raising taxes on anyone who makes “under $250k.”

Yes, let’s work towards resolving the issues present within the health insurance industry – but let’s not do it based on lies, lies that will lead to even more $$ being taken out of Joe the Taxpayer’s pocket to pay for, lies that will help give the government more and more control over your healthcare decisions.

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7 Responses to “Am I seeing things? AP takes on “skyrocketing health insurance industry profits” smear”

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  1. NC Cop says:

    The AP doesn’t care. They know that it won’t affect the health care outcome one bit. Then they can claim their “unbiased” record is for real.

  2. Carlos says:

    Why, this administration is diverse ideologically. They run all the way from Mao to Lenin, Ho Chi Minh to Trotsky, Chevez /Castro to Stalin and every stripe of socialist/communist in between! Implying there’s no diversity there is just wrong.

    I mean, how much more diversity could one ask for in a government hell-bent on becoming a dictatorship?

  3. LC Gregory says:

    Well, of course the profits are large when the volume is large – if it’s not big profits, it’s big losses, layoffs, lower tax revenues (hey! Something the Dems might actually notice!) and consequently lower sales for various industries that would be supported by Insurance employees (i.e. Everything). Just like the oil industry, it’s large profits with large volume on a small margin.

    But hey – please, don’t let facts get in the way of a good demagogic!

  4. Carlos says:

    It’s not a big thing (as a matter of fact, it’s wonderful to a socialist) if insurance tanks and is taken over by Big Brother. That just means more people on the government dole, whether they aren’t working (unemployed) or are (at either a makeshift, useless and overburdening-to-the-taxpayer job or one where the guvmint sets the wages, like for doctors).

    I’m just glad I’ve lived enough life that the guvmint’s death panel won’t bother me too much, but I worry ’bout my children (independent), grandchildren (having grown up in public “re-education”) and their progeny.

    It would have been nice to leave them a country that is truly free.

  5. Kate says:

    If these guys were truly concerned about the out of line profits of anything…then why not cap the salaries of Hollywood, sports teams and the gambling casinos???

    Instead they go after people that are actually providing Americans with a valuable service…not entertainment.

    Oh, excuse me, Rosie O’Donnell might sit one me for that one…