Health Insurance Profits Not Up To Par
On Sunday, HotAir.com linked to an Associated Press article that explains how low the insurance industry’s profit margins are. According to AP, the industry averages just over two percent of revenues; meanwhile, according to Ed Morrisey on HotAir on October 10, the trial lawyer industry averages 14%. Not to defend the insurance industry- they are pro-business but certainly not pro-free market, and manipulate government regulations and programs in their favor far too often- but HotAir points out very well that claims about profit-gouging by the insurance industry is certainly not the case and a lie by Democrats who claim they are doing so.
A caveat: an acquaintance recently pointed out that “profit” is relative- for example, if an insurance company can be based in Alexandria, VA and pay eight thousand dollars per month for rent and be perfectly functional and profitable, but moves to downtown DC for $26,000 per month in order to decrease “profit” by $216,000 per year with not an equivalent increase in business,?year-end “profit” may not tell the?whole story of how well the company performs.
Unfortunately for Democrats, this does not change the fact that the insurance industry has less profit than a whole host of selected businesses- AP highlights the following: “The latest annual profit margins of a selection of products, services and industries: Tupperware Brands, 7.5 percent; Yahoo, 5.9 percent; Hershey, 6.1 percent; Clorox, 8.7 percent; Molson Coors Brewing, 8.1 percent; construction and farm machinery, 5 percent; Yum Brands (think KFC, Pizza Hut, Taco Bell), 8.5 percent.”?This reminds me of 2006- back when “Big Oil” was the bogeyman the government was targeting-?when I saw numbers showing Coca-Cola averaged 22% profit compared to Exxon Mobil’s nine percent (the numbers for Exxon Mobil were for the last quarter in 2005, when the company made what was to that date the greatest profit ever for a company, nine billion dollars). Do I hear a Democrat for windfall taxes on Coke?
