Obscene Health Insurance Company Profits for 2010

March 6, 2011
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With Obamacare passed, the liberal media is mum this year regarding health insurance company profits.  In the years leading up to the passage of Obamacare, the top health insurance companies profits were front page news.  We have highlighted before that the health insurance company profit headlines about health insurance profits are often misguided.

For 2010, the top five insurance companies reported an average profit margin of 4.8%.  Insurance company profits ranged from 2.67% for Express Scripts to 6.33% for Cigna.  These hardly qualify as obscene profits, but the liberal media often uses profit of any amount as a dirty word.

The profit margins for the top 5 health insurance companies are (ordered by market cap):

  • United Health Group: 4.92%
  • Express Scripts: 2.67%
  • Wellpoint: 4.92%
  • Aetna: 5.16%
  • Cigna: 6.33%

Part of the silence from the liberal media could be that the average profit margins for insurance companies down for 2010.  In 2010, the average health insurance company profit margin was 4.8% versus 5.15% for 2009 for the 5 largest insurance companies.  Hardly fodder for the anti-capitalism media.

Despite the lower health insurance company profits for this year, the five largest insurance companies paid over $6 billion in income taxes on just under $12 billion in net profits.

The annual reports of the insurance companies are just now being published, so it is inevitable that you will start seeing headlines over the next few weeks about the evil health insurance company profits.  However, the truth found in the financial statements of the health insurance companies is often much less sensational than the outrages that the media tries to portray.

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Obscene Health Insurance Company Profits for 2011

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5 Responses to Obscene Health Insurance Company Profits for 2010

  1. [...] Obscene Health Insurance Company Profits for 2010 [...]

  2. Bill Doyle on January 12, 2012 at 12:42 pm

    You guys are full of crap. The profits the health insurance companies make are obscene. You obviously skewed the numbers in
    your favor. Even using your numbers in terms of percents , the profits are huge. Health care costs are crippling this country and this economy. Like the assholes on Wall Street, when is enough profit enough?

  3. Steve Mustanski on January 12, 2012 at 1:28 pm

    The numbers are not skewed, but are from the actual income statements of the companies listed. You can go calculate them yourself or go to yahoo finance. Don’t fall for the media hype.

    You think a 6% profit is huge and obscene? Last year, Apple Inc. earned a 23.95%, Google 26.78%. There are many other companies that earn more than that.

    Health Insurance companies sell insurance to reduce the risk of people incurring medical costs. They don’t sell healthcare. Politicians who crave more and more power demonize health insurance companies in the hope that one day, the government can run healthcare. Would you rather the companies be losing money? How would you get health insurance if companies couldn’t earn a profit providing it?

    When is enough profit enough? Never. The more profit a company earns, the more money it uses to invest, grow, hire people, and reward shareholders. If you own stocks or a 401k, you want companies to be profitable.

  4. [...] Obscene Health Insurance Company Profits for 2010 [...]

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