Obscene Health Insurance Company Profits for 2009
Once again the media is pushing stories about obscene health insurance company profits. According to a recent report from Health Care For America Now, health insurance company profits for 2009 were over 56% higher than 2008. The report also called out CIGNA for a whopping 346% increase in profits.
The liberal-leaning, union-bankrolled Health Care For America Now study highlighted many of the “outrages” the health insurance companies are committing. Outrages such as earning a profit, considering paying out dividends to shareholders, and raising premium costs.
Most, if not all, of the claims in the Health Care for America Now study are correct regarding the health insurance company profits. However, the truth is often obscured by the shocking headlines and claims.
The top five health insurance companies reported an average profit margin of 5.2% for 2009. Wellpoint had the highest profit margin racking up a 7.6% in profits. Humana’s 3.4% profit was the lowest for the top 5 health insurance companies.
The top five health insurance companies did indeed see profit increases of over 55% for 2009. However, the top 5 saw a 34% decrease in profits in 2008 in a particularly bad year. The total profit increase from 2007 to 2009 was only 2.6%. The insurance companies were able to bounce back from a bad year, which lead to huge profit increases for 2009, but hardly obscene or outrageous when compared to average years. If a company or industry has a particularly bad year with a following good year, the profit increases can seem very high.
What about the claim that CIGNA had a 346% profit increase in 2009? Well, it is entirely true. However, in 2008, CIGNA had a 74% decrease in profits in a really bad year for the company. The total profit increase from 2007 to 2009 was an outrageous 17%.
The media and several special interest groups are working to demonize several groups in order to sway public opinion. Many groups dish out half truths in an attempt to induce outrage and hysterical emotional response from the public. As “profit”, “CEO”, “shareholder” and “Rich” become dirty words, Americans need to educate themselves and seek the truth.