health insurance profits

[MattNC]

http://news.yahoo.com/s/ap/20091025/ap_on_go_co/us_fact_check_health_insurance

No idea what's true and what isn't. I increasingly doubt the AP - interested to hear others' insights.

[jtrockville]

1. Executive compensation isn't counted as profit.

[ThomCat]

2. Exactly. If you can choose what is considered profit,

and you can extract obscene pay and perks before you calculate profits, and you can extract all the costs of the slush funds for lobbying and bribing our Members of Congress, our Senators and our President then it is very easy to show a modest profit margin.

If they had to report everything other than the cost of basic administration and health care as profit I am sure we would see MUCH different numbers.

[MattNC]

3. I know

and they're too high, but exec. compensation isn't a huge chunk of health care costs.

[jtrockville]

4. Right, but it IS a huge chunk of health insurance costs.

[ThomCat]

5. The corporate media is covering for corporate insurance,

proving free public relations. This is not the first time that the "news media" provided free public relations. It won't be the last.

They could have framed this story very differently. They could have talked about Insurance companies wastes Hundreds of Millions of dollars on:
executive salary,
and perks,
and lobbing against health care,
and lobbying for laws that harm consumers,
and bribing politicians with campaign contributions and trips and luxuries and perks,
and public relations efforts to lie to the public

And because of all of these totally ridiculous expenses the industries profit margins are only around 6% right now.

To make it even worse, they could say, the insurance industry is becoming famous for routinely denying coverage, even though providing coverage is supposed to be their business, just to keep scraping up the money to pay for these other ridiculous expenses that are eating up so much of their budget!

If the industry was running a trim and legitimate shop, focusing on their core business of providing health care to people who pay for it in advance, they would be running a healthy profit.

You won't see that kind of framing and focus from the media though, because they are determined to always frame the facts in a way that benefits the corporations they are covering. Their secondary goal seems to be to always hide as much important information from people as possible, replacing it with gloss and PR spin provided by the companies they are covering.

[MattNC]

6. thanks for the explanation

very helpful

[laughingliberal]

7. First, I noticed this in the article:

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.

Big difference here is that no one will die from lack of Tupperware, Clorox, or beer. Aside from that, as has already been said, executive salaries, lobbyists, etc... have all come off the top before profits are calculated. What I would rather see is their medical-loss ratios: what percentage of the premium dollars they take in go to pay claims for health care? Then compare it to government run programs like Medicare.