Seen in a post at InsureBlog responding to the premise of Michael Moore’s Sicko:
And this just in . . .
For those of you playing along at home, here are the profit margins of 3 top carriers in the health insurance industry.Wellpoint 5.4%
http://finance.yahoo.com/q/ks?s=WLPAetna 6.77%
http://finance.yahoo.com/q/ks?s=AETUHC 5.75%
http://finance.yahoo.com/q/ks?s=UNHIf each of these carriers were to operate on ZERO profit margin you could expect premiums to drop approximately 6%.
That’s just SICK!
The math is a bit more complicated than that, but the general idea is right. Health insurance isn’t expensive because of profit-motivated insurers. It’s expensive because health care is expensive to provide in this country.
That’s a point that is mostly missed in the popular debate on trying to provide universal health care, or the rumblings about moving to a single-payer federal system — while bits and pieces of the expense could perhaps, in theory, be shaved off by moving to a different funding vehicle, at its core the American health care system is a horrifically expensive beast.
Part of that is because of choices that we, as a society, have made. We don’t like to wait. We want the latest and greatest treatments. We generally want to be sure that all our bases are covered. And woe unto the professional who makes a mistake, because a nasty, drawn-out, expensive lawsuit is waiting in the wings.
We have a choice of changing our attitudes towards what health care should be, of accepting that some folks can’t afford the type of health care that is currently expected by society, or of accepting that the health care system some folks want is worth the drag it will be on the economy and society in general.
Meanwhile we have activists who apparently missed the lesson in economics that profit isn’t a bad thing, and that “record profits” is a pretty meaningless statistic if you’re just looking at nominal dollars, without considering the size of the base upon which that profit was built.
2 responses so far ↓
1 Noah Bennet // 7 Jul 2007 at 8:58 pm
Of course, focusing on profits leaves out the overhead of private insurers. Quick test: compare the ratio of payout to premium income of those top 3 American health insurance companies vs. the payout ratio of health care plans in, oh, Canada, Germany, Switzerland, Norway…
2 InsureBlog // 7 Jul 2007 at 9:40 pm
Sicko Profits…
Profit margins for health insurance are around 4% and sometimes less. Take out the profit margin & what do you have?…