Thursday, August 20, 2009

Health Insurance "Profits"--the Propaganda

You've heard that health insurers are making obsceeeeeeeene profits, of course.

Well, they are, if you don't apply any common sense to the numbers the Democrats use.

Bert Ely, a financial analyst and monetary policy consultant at Ely & Company, Inc., told CNSNews.com: “The HCAN numbers are not a relevant measure of the profitability of the health insurers. The relevant profit measure is their profits per premium dollar collected. Those profits are just a few pennies per premium dollar.

The ACORN/MoveOn-related (!!) HCAN prefers to just add up profit numbers without relating them to anything at all. That's no different than noting that the sales of Kohl's Department Stores have risen by 500% in the last 10 years--without saying that they have opened a bunch of new stores in the same timeframe.

IOW, they're lying with numbers.

13 comments:

Anonymous said...

You are a fool. Of course the profits are pennies on the dollar, all profits are. Profits of 10 pennies on the dollar is, guess what, a 10% profit......

The fact is that from 2000-2008 the profits of all insurance companies went up by a large amount, around 400%, WHILE they covered LESS people, so you claim of opening more stores doesn't apply.

http://vancouver.injuryboard.com/miscellaneous/private-health-insurance-profits-soar.aspx?googleid=230780

Dad29 said...

And you are an ecomonics dumbfuck.

ONe can only measure profits against the standard of 'gross revenues.'

Makes no difference how many people were covered. "400%" is also "from one cent to five cents."

Go away.

ehutchins said...

Well... I wouldn't say that he is an "ecomonics dumbfuck" for simply pointing out what the article states about the report. Not all of us are economists, but some of us are accountants with an MBA.


"...the big three carriers in Washington, Regence BlueShield, Premera Blue Cross and Group Health Cooperative saw profits increase from $11 million in 2002 to $243 million in 2003 and $431 million in 2006. Their cash surplus went from $833 million in 2002 to $2.2 billion (with a "B") in 2006. Interestingly enough they did it while covering less people. Over 2.37 million people were covered by the three in 2002 compared to 1.9 million in 2006. So the cost of health care is still going up, but the profits by private health insurance companies are rising even faster. The article shows medical costs rose 16 percent in the same period that health insurance profits went up 23 percent."


Growth from 1 to 5 cents on the dollar would be large in this context. And actually real profits are measured against effective income (after expenses and revenue) and retained earnings.

Dad29 said...

Now we're getting somewhere.

Looks to me as though the biggest part of 'profits' is going to cash reserves--which most would call "retained earnings."

IOW, the carriers are reserving against anticipated future costs.

You aren't suggesting that the insurers should NOT retain earnings, are you?

Azzix said...

Call them "cash reserves" if you like. They are still "profits" by another name. The money didn't show up because they spent MORE than they collected, did it?

Dad29 said...

Umnnnhhhh...."Cash Reserves" are necessary and required by law. It's a good idea to have excess cash reserves.

Remember AIG? Citibank?

See, "cash reserves" pay unanticipated large (and small) claims NEXT year, or the year AFTER.

Duh.

Warren said...

Duh? I will call your bluff. How much is required by law? Let's see if you really know what you are talking about.

Dad29 said...

It's irrelevant how much is required by law--it varies from state to state anyway.

What IS relevant is prudent management--that is, maintaining those reserves which could be required to pay future claims--AND, e.g., to offset credit writeoffs, extraordinary expenses, etc.

patrick o'heffernan said...

What I don't understand is how the CEO of Oxford Insurance can pay himself a salary of $29 million and take home another $82 million in stock options while reducing the number of people his company insures. His salary alone would pay for health care for 200,000 kids. I can only conclude that Dad 29 is either the most uncaring person in the country, or the dumbest...or is really an insurance PR guy posing as a blogger and being paid an obscene amount of money to do it.

Dad29 said...

From the evidence presented in the post and comments, your conclusion is CERTAINLY accurate.

I'm surprised that you aren't working as a professional seer!

Anonymous said...

Youre a stupid fuckin hillbilly racist. Youre a sad piece of ignorant shit passing on ignorance to your kids how pathetic. Just another stupid ass redneck prick.

Anonymous said...

So what are you saying? aside from the Anonymous comment (which is just ignorent) does anyone think the government is the answer? the average pay for a gov. employee is 74k+ almost 20k more than the private sector(think DMV). EVERY gov run business in the U.S. LOSES money. You think that will help? You want lower profits, increase competition, allow companies to cross state borders, let them compete nationally. Hell, the legislature wont even sign up for their own bill, why should I or my tax dollars??

Jhon smith said...

It's irrelevant how much is required by law--it varies from state to state anyway.

What IS relevant is prudent management--that is, maintaining those reserves which could be required to pay future claims--AND, e.g., to offset credit writeoffs, extraordinary expenses, etc.