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Another Democrat healthcare lie exposed

By the Associated Press, of all people: FACT CHECK: Health insurer profits not so fat

THE CLAIMS

_"I'm very pleased that (Democratic leaders) will be talking, too, about the immoral profits being made by the insurance industry and how those profits have increased in the Bush years." House Speaker Nancy Pelosi, D-Calif., who also welcomed the attention being drawn to insurers'"obscene profits."

_"Keeping the status quo may be what the insurance industry wants their premiums have more than doubled in the last decade and their profits have skyrocketed." Maryland Rep. Chris Van Hollen, member of the Democratic leadership.

_"Health insurance companies are willing to let the bodies pile up as long as their profits are safe." A MoveOn.org ad.

THE NUMBERS:

Health insurers posted a 2.2 percent profit margin last year, placing them 35th on the Fortune 500 list of top industries. As is typical, other health sectors did much better - drugs and medical products and services were both in the top 10.

The railroads brought in a 12.6 percent profit margin. Leading the list: network and other communications equipment, at 20.4 percent.

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.

The star among the health insurance companies did, however, nose out Jack in the Box restaurants, which only achieved a 4 percent margin.

UnitedHealth Group, reporting third quarter results last week, saw fortunes improve. It managed a 5 percent profit margin on an 8 percent growth in revenue. (emphasis added)

Kudos to the AP's Calvin Woodward for finally doing the research that should have been done six months ago. But Calvin, be prepared to be targeted and frozen out by the White House for this.


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Comments (37)

2.2%? Why, heck, ACORN wil... (Below threshold)
Strick:

2.2%? Why, heck, ACORN will steal more than that from Obamacare.

Liars and the lies they tel... (Below threshold)
Victory is Ours:

Liars and the lies they tell - amazing.

UnitedHealth's netearnings in 2007?

$4.5 BILLION

UnitedHealth's return on shareholder's equity in 2007?

22.4%

UnitedHealth's gross revenues in 2007?

$75 Billion.

Yes, when you have annual revenues of $75 Billion the margin is smaller - that's true of many of the giant corporations.

But $4.5 Billion is a huge profit nonetheless.

And using the profit margin percentage and not reporting the profit in dollars is how the insurance company shills are playing you for suckers.

Looks like at least one gullible chump took the bait.

I'll look up the obscene profits made by HealthSpring later. It''ll be BILLIONS.

And BILLIONS for this health insurer and BILLIONS for that health insurer equals BILLIONS AND BILLIONS and BILLIONS of dollars in profits.

Vic

Vic, of course, cites a com... (Below threshold)
cirby:

Vic, of course, cites a company that does insurance. And a lot of other things that relate to health care.

And that "greedy" (and massive) company managed a 16.6% profit margin in the one year Vic cherrypicks.

Which is not that high, honestly.

One more thing: ye, they reported their profit margin like EVERY OTHER COMPANY SHOULD. Higher investment equals higher dollars with equivalent percentages. 4.5 versus 75 is, once again, not that high...

"Vic, of course, cites a... (Below threshold)
Victory is Ours:

"Vic, of course, cites a company that does insurance. "

I cited the company cited by the author of the post.

$4.5 BILLION IN PROFITS. It's not huge, it's obscene.

Vic

And I didn't cherry pick a ... (Below threshold)
Victory is Ours:

And I didn't cherry pick a year - the AP did. The AP quotes profits of these companies for 2008 -- profits made during the largest recession since the great depression.

THAT is misleading. Look at the profits these companies were making before the recession for a true picture of the situation.

Like 2007.

UnitedHealth made $4.5 Billion on revenues of $75 Billion.

A profit of 6% - quite a bit different that the 2% underlined by the shills who wrote this "story" -- shills who quote the profits during a recession and want you to believe that's representative.

Man, who hits these people with a stupid stick? Can't you see the way these insurance companies are duping you guys? Amazing.

Vic

So VIC, what should their P... (Below threshold)
Nancy's Nazi:

So VIC, what should their PM be? Maybe you should invest in this sector.

Maybe a better question. Who the FUCK are YOU to tell ANYONE what their PM, ROI, or ROE should be????

The same creeps that spout this fairness outrage don't see a thing wrong with aborting an "inconvenience".

Who the FUCK are YOU to ... (Below threshold)
JLawson:

Who the FUCK are YOU to tell ANYONE what their PM, ROI, or ROE should be????

Someone who likely has never done a damn thing in the business world. Who has never had to run a business or worried about having enough money to pay his employees. Who never bothered to look at how much markup is needed in the retail world to pay the rent and keep the lights on, much less pay the employees

He sees 'profit' as an obscene word - it MUST be obscene because a profit means the cost is higher than it should be.

But it's necessary.

GM's sales goal: Keep on trucking More SUVs than cars to boost profits - Detroit Free Press 21 Jun 00

That's General Motors Corp.'s production plan over the next several years in North America as the world's largest automaker attempts to regain eroding market share and hit its 5-percent net profit margin goals.

GM acknowledged its North American operations will fall short of that 5-percent goal in 2000. The automaker hopes to reach it next year after cutting back on production of small cars, such as the Chevrolet Cavalier and Pontiac Sunfire, while launching sport-utility vehicles and truck hybrids such as the Chevy Avalanche and the Pontiac Aztek.
We've seen what happens when there ISN'T a profit.

GM's revenue, BTW, was $184.6 billion in 2000. So their goal was roughly $9 billion in profit. Are they evil also, Vic, or is your brain simply addled by your upbringing?

Picking the profit margin <... (Below threshold)
Victory is Ours:

Picking the profit margin during a recession and then declaring the Democrats are lying about profits...

Do they think you're stupid? Don't they realize that anyone can figure out that the profits in 2008 are not representative?

Isn't it obvious the game they are playing when they quote profit margins during a recession and don't report the dollar amounts - and also don't point out that the 2008 profits are a lot less than 2007, 2006, etc.?

Suckers. They're taking you as suckers.

Vic

You'll have to pardon VIC. ... (Below threshold)
GarandFan:

You'll have to pardon VIC. In VIC's world, PROFIT is a dirty word. In VIC's world, companies don't need to make a PROFIT. Their equipment never wears out. Their employees come to them fully trained. Competition for resources never causes prices to rise. New technologies and drugs magically appear on their own. People who invest (risk) discretionary funds never expect that they might lose that money, only gain money. Just ask the the Chrysler bond holders.

Yeah VIC, lets get rid of that evil word PROFIT.

And BILLIONS for this he... (Below threshold)
iwogisdead:

And BILLIONS for this health insurer and BILLIONS for that health insurer equals BILLIONS AND BILLIONS and BILLIONS of dollars in profits.

So what? Return on revenue is a standard measure to gauge business profit. Return on assets is another: for health insurers it's typically between 4-6%. For Walmart, it's 9% and for Dell it's 12%.

http://online.wsj.com/article/SB124947013703607453.html

But, no one has to justify their profit margin. Vic tosses out another red herring.

Unless he's trying to say that we will save "BILLIONS AND BILLIONS and BILLIONS of dollars" by crushing private insurance.

The problem with crushing private insurance is that then all we'll have is the government option, and government health coverage is rife with waste and fraud. Obama told Congress that Medicare and Medicaid loses "Hundreds of billions" (read BILLIONS and BILLIONS) in waste and fraud.

Waste and fraud in Medicare and Medicaid is hard to measure, but estimates are that it is between 10% and 35%.

For private health insurance, waste and fraud is about 1.5%.

http://www.insideronline.org/feature.cfm?id=264

And, don't bring up that phony "administrative costs" canard. It's crap.

Administrative costs are hu... (Below threshold)
Victory is Ours:

Administrative costs are huge. ADVERTISING costs are huge.

But this post is about health care insurance profits and the LIES being told about the profits...

Like pretending that the 2008 profits are representative even though 2008 is a recession year and then labeling democrats as liars.

Lies were exposed in this post all right.

Vic

"You'll have to pardon V... (Below threshold)
Victory is Ours:

"You'll have to pardon VIC. In VIC's world, PROFIT is a dirty word. In VIC's world, companies don't need to make a PROFIT.

Another lie.

It's one lie after another -- why are they lying to you about the health care issue?

Is it because the facts are too inconvenient.

Pretending that 2008 - a recession year - is representative of the profits health care insurers make - and then calling Democrats liars.

It's one lie after another being told by Republicans that is at work here.

Vic

Unless he's trying to sa... (Below threshold)
JLawson:

Unless he's trying to say that we will save "BILLIONS AND BILLIONS and BILLIONS of dollars" by crushing private insurance.

Of course we'll save that money.

Naturally, it'll be replaced by GOVERNMENT spending. So - you won't have to pay $300-400 a month for health insurance, but your taxes will go up a commensurate amount. After ALL, OBAMA (pbuh) has promised that he won't sign a bill that'll add to the deficit. So, in order for there to be no deficit the taxes extracted from us peons who won't have a friggin' CHOICE will have to go up.

And for a wonderful example of the CURRENT abilities of government to provide something as simple as a flu vaccine, see this.

As has been asked by others - if they can't do THIS efficiently, and they can't run AmTrak at anything less than a loss, and they can't run something as simple as a "Cash for Clunkers" program without slapping in shitloads of paperwork AND being inefficient - why should they be trusted with handling medical care?

BTW, Vic - you're spectacularly unconvincing in your arguments. I really hope you're getting paid by the word and not by the convert.

Obama has demonized just ab... (Below threshold)
recovering liberal democrat:

Obama has demonized just about every business sector in America. Through the 2008 campaign to the present, he has gone after credit card companies, the coal industry, mortgage companies, real estate companies, steelmakers, utilities, drug companies, doctors, oil companies, Wall Street, defense contractors, and health insurance companies, just to name a few. In each case he has dinged them for greed, taking excessive profits, and failing to put people first. His criticisms have not been over minor matters but over their basic core functions, and their values or lack of them.

Obama demonstrates almost complete ignorance about the private sector and it's no wonder: he has so little experience in it.
This quote from the article linked below. Lays out the case "O" doesn't even try to hide how ignorant he is.

Obama vs. The American Businessman
by Peter Schweizer

http://biggovernment.com/2009/10/24/obama-vs-the-american-businessman/

"BTW, Vic - you're spect... (Below threshold)
Victory is Ours:

"BTW, Vic - you're spectacularly unconvincing in your arguments. I really hope you're getting paid by the word and not by the convert."

Unconvincing? I showed the lie of pretending 2008 profits -- during a recession year -- are representative. It took al of a minute to look up the past profits and see the lie being told. I'm amazed that you didn't see that the AP reporter was just shilling for the insurance company.

You're apparently an easy mark for these kinds of shills - a willing believer, and an eager drinker of the kool aid. "Ah look - a line of bullshit that'll let me call Democrats liars, I'll swallow that."

Didn't you even look up the past profits?

Didn't you realize that 2008 was a recession year?

Wow - talk about "spectacularly unconvincing."

Vic

Victory is Ours wrote:... (Below threshold)
iwogisdead:

Victory is Ours wrote:

Like pretending that the 2008 profits are representative even though 2008 is a recession year and then labeling democrats as liars.

Except the article doesn't do that, does it Vic? In fact, the article says:

Health insurance profit margins typically run about 6 percent, give or take a point or two.

Let's see--in No. 2 above you say that Unitedhealth made $ 4.5 billion in profit on $ 75 billion in revenue for 2007. That equals 6%, doesn't it? Just like the article says, and still less than half the margin of railroads.

"$4.5 BILLION IN PROFITS. I... (Below threshold)
cirby:

"$4.5 BILLION IN PROFITS. It's not huge, it's obscene."

Not for a company that big. It's a bit higher than average for a company of that size, but not even vaguely obscene. UnitedHealth's Market Cap is about $30 billion. A $4.5 billion profit on that isn't spectacular at all, especially with the risks that come with any large financially-based industry. It's the kind of mnoney that could let them pay off some long-term debt (and they have a good amount) while returning a good solid profit (no, not obscene) for the people who invested in the company.

For example, look at the multi-year price of UNH stock - if you had invested a million dollars in UNH stock in early 2006, you'd have less than HALF that in stock value today.

Not to mention, of course, that most of their operational profit comes from medical SUPPORT sales, not insurance profits. So using them as a poster boy for "greedy insurers" is a big miss.

It is clear Vic knows very ... (Below threshold)
Patrick:

It is clear Vic knows very little about this subject or much about business in general. I have read that health insurance profit margins have not exceeded 3.5% annually in any year since 1990. The 2008 figure being cited is not an unusual year nor should it be seen as such because I doubt that industry would be as deeply impacted by the recession as other sectors of the economy. Health care spending decisions theoretically should not be as discretionary as other spending choices such as whether to by a new car or a new television.

Profit margin is a legitimate measure and is far more indicative of how well a certain business sector is performing. Energy companies are similarly demonized by liberals because of the large profits they regularly post. But like the health insurance industry, the profit margins posted by the large oil companies is not really that large compared to other sectors of the economy such as software companies or telecommunications firms. I think ExxonMobil posted an 8% profit margin in 2008. And since when has profit become a dirty word? If there was no profit, the government would not be getting as much money in return in the form of taxes. ExxonMobil was taxed at a 49% tax rate and the United States has one of the highest corporate tax rates in the world - in fact the second highest rate in the industrialized world after Japan. Maybe Vic better start getting a clue and stop demonizing corporations like his hero Obama because doing so will guarantee that this nation's unemployment problem will only get worse because these companies will move more and more of their operations overseas where they are treated more fairly by foreign governments. That is a promise. Democrats don't grasp reality. They took charge of Congress in 2007 which is precisely when things began going to hell in a hand basket. I don't believe that was a coincidence.

You seem pretty hung up on ... (Below threshold)
Nancy's Nazi:

You seem pretty hung up on the "recession year" outrage, VIC.

How about a president and left-wing congress that more than triples the previous year's deficit (459B vs. 1.42T) during a recession?

Go back to the DNC and get some different talking points.

"You'll have to pardon VIC.... (Below threshold)
GarandFan:

"You'll have to pardon VIC. In VIC's world, PROFIT is a dirty word. In VIC's world, companies don't need to make a PROFIT.

Another lie.

Would you care to expound on that statement?

"You seem pretty hung up... (Below threshold)
Victory is Ours:

"You seem pretty hung up on the "recession year" outrage, VIC."

That's the whole point of the article. And the author chose the year, not me - they just didn't bother to point out that the profits they were focusing on were reduced because it's a recession year.

This post pretends to be a "fact check" on Democratic claims of excessive health care insurance company profits.

It then uses the profit figures from a recession year to "fact check" with.

It ignores the dollar amount of the profit - which amounts to BILLIONS and instead focuses on percentages.

It also ignores that the profits in 2007 and years preceding 1007 were 2-3 TIMES the 2008 profits.

It's BS. And it is BS posing as a "fact check" that "exposes a lie".

I can't believe how gullible some folks are.

Vic

vic:You're basical... (Below threshold)
pvd:

vic:

You're basically innumerate, aren't you? How sad.

BTW, since the dollars are important, figure out your basic living expenses (food, clothing, shelter - exclude any luxury items such as transportation since walking is healthy for you or cable tv which isn't) and deduct from your income.

Please send the difference (ie. the "obscene profit") to your masters.

And why do you want to put ... (Below threshold)
pvd:

And why do you want to put hard working creative people out of work? Enough people are already unemployed.

vic: "ADVERTISING costs are huge"
Vic -YOU have to c... (Below threshold)
JLawson:

Vic -

YOU have to convince US, in case you hadn't noticed.

And face it, kid - you're not doing the job.

vic - "It ignores the d... (Below threshold)
Marc:

vic - "It ignores the dollar amount of the profit - which amounts to BILLIONS and instead focuses on percentages."

Screw your "dollar amount," name me one, just one, company that doesn't figure profit margin as a percentage of gross revenue.

Jesus H. Christ nitwit, how the friggin' hell do you think they figure what they pay to the IRS every year - a Ouija broad?

Pssst... vic, when are you going to berate Farm and construction machinery, Tupperware, the railroads, Hershey sweets, Yum food brands and Yahoo? Answer who all make higher profits?

Lets talk recession year, beverage companies had 25.9 percent profit margin last year. Right behind that were healthcare real-estate trusts (firms that are basically the landlords for hospitals and healthcare facilities)

When will you slam them nitwit

Vic.... BTW, the AP article... (Below threshold)
Marc:

Vic.... BTW, the AP article that you've made a passing reference to as being "written by a republican," gives data from a recession year but... it also uses that year as compared to other industries.

So regardless of your denial of facts, it is in fact a valid comparison.

2006 - profit margin was 3.8% a decline from 4.9% in 2005. OMG, they're getting filthy rich aren't they? (/sarc)

The profit margin on U.S. health insurers' Medicare business hit 5.7% in 2006. Gee, higher than the commercial industry, can you guess why? Doubtful but I thought I'd ask anyway.

"BTW, the AP article tha... (Below threshold)
Victory is Ours:

"BTW, the AP article that you've made a passing reference to as being "written by a republican," gives data from a recession year but... it also uses that year as compared to other industries."

That would be the AP article quoted and linked to in the post above (which I never said was written by a Republican), but which is clearly shilling for the health insurance company.

Notice that it doesn't report profits in 2007, before the recession kicked in -- profits that were 3 times higher than 2008.

$4.5 BILLION in profits in 2007. Gross revenues of $75 BILLION.

Sure, the percentage margin is small. But $4.5 BILLION in profits is a huge amount of money to take out of Americans pockets.

And they earn those profits by turning down people for 'pre-existing conditions' and by denying needed tests, etc.

They profit from death - to the tune of $4.5 BILLION a year.

Vic

Keep blathering, Victory is... (Below threshold)
iwogisdead:

Keep blathering, Victory is Ours. That's all you have left. Your argument has been thoroughly discredited and you have no credibility at all.

vic - "That would be th... (Below threshold)
Marc:

vic - "That would be the AP article quoted and linked to in the post above (which I never said was written by a Republican), but which is clearly shilling for the health insurance company."

You called the AP writer a "shill," they damn sure aren't a shill for anyone but repubs in your eyes. That's close enough for Gov. work as they say.

vic - "Pretending that 2008 - a recession year - is representative of the profits health care insurers make - and then calling Democrats liars."

How is the articles full of "lies?" Does it omit other years, yes, but that doesn't qualify as a lie. Except to you.

I posted the profit margins for 2006 ans 2005, long before the recession hit and both years are under 5%.

Just admit it "profit" is a 4 letter word to you and move on with yourself.

"They profit from death - to the tune of $4.5 BILLION a year."

Gimme a number, how many died? Without that you're just full of shit.

"And they earn those profit... (Below threshold)
GarandFan:

"And they earn those profits by turning down people for 'pre-existing conditions' and by denying needed tests, etc."

1. Cancel your homeowners and car insurance VIC. Wait until you have a house fire or car accident and then get a policy. AND then try to get them to cover the damage.
2. Medicare denies a higher percentage of requests for further testing/specialist care than private insurers.

They profit from death - to the tune of $4.5 BILLION a year.

Yep, only in VIC's world do you kill off your customer base in order to make even more money.

VIC, by chance do you think you're immortal?
Just wondering. Because, you know, sometimes no matter what medical help you get, YOU STILL DIE. Odd, isn't it? Ya'd think with all those premiums paid, you'd at least be granted immortality.

Victory is Ours wrote:... (Below threshold)
iwogisdead:

Victory is Ours wrote:

"They profit from death - to the tune of $4.5 BILLION a year."

Of course, not even Obama would agree with this hysterical claim. Obama says that there is a "hidden cost" in our insurance premiums to pay for uninsured people. Uninsured people are already getting care, says our President. Obama wants universal healthcare in order to save a whole bunch of money by preventing unneeded foot amputations and tonsillectomies.

Vic's raving demonstrates how upsetting the AP article is to the left--because it shows that health insurance companies aren't exactly the demons they want to make them look like. Nothing much for the left to do but rant.

psst "profit hater" vic... ... (Below threshold)
Marc:

psst "profit hater" vic...

Your Net Margin Is A Key Indicator Of Health

Net operating margin, also known as net profit margin, is the best barometer of a company's performance. The ratio tells how well a company converts revenue from core operations into actual profit - how many cents of profit it gets from every dollar of sales. The operating margin shows how well the company controls costs. In the long term it drives cash flow and the company's ability to borrow. A rising net margin could signal falling costs, increasing efficiencies or booming prices for the company's products. Conversely, falling margins may signal rising costs, ballooning inefficiencies or a big tax bill.
Ok "Mr. Profit Hater" what say you?

"Yep, only in VIC's worl... (Below threshold)
Victory is Ours:

"Yep, only in VIC's world do you kill off your customer base in order to make even more money."

What an idiot. These companies don't make money off of cancer victims, or people with other serious health care issues.

Are you in third grade? Letting someone with a serious health problem die isn't "killing off their customer base" you moron.

Vic

iwogisdead - "Uninsured... (Below threshold)
Marc:

iwogisdead - "Uninsured people are already getting care, says our President. Obama wants universal healthcare in order to save a whole bunch of money by preventing unneeded foot amputations and tonsillectomies."

Speaking of lies, there's one fer ya vic.

The claim is we pay for the uninsured already, so where's the problem the asshats say. (I'm lookin' at you vic)

BUT what the asshats don't say is when the uninsured are insured they will not be limited to emergency room visits.

THEN they all get routine dental and eye care. THEN they all get routine and yearly med checkups where previously they didn't.
That WILL skyrocket costs.

Not that they don't deserve all that care, but the liars are lying about it.

Oh and the biggest lie of all as it turns out...

vic... why aren't you crying about the latest incarnation of the plan where somewhere between 20 and 25 million will STILL be uninsured?

vic - "Are you in third... (Below threshold)
Marc:

vic - "Are you in third grade? Letting someone with a serious health problem die isn't "killing off their customer base" you moron."

It's not?

Lets do some simple math to see if that's true.

"Beelzebub Heath Insurance Company" insures 100 people at a cost of 1 million dollars per year.

Of that 100 during the course of the 2008 32 of them "died" because they were denied insurance.

If that's not killing off their customer base I fail to see what would be.

Simple question they had 100 customers before, but now only have 68, that less right?

In addition, the "Beelzebub Heath Insurance Company" just rid themselves of the highest cost policies they had in 2008.

Lie # 786Obama car... (Below threshold)
914:

Lie # 786

Obama cares about Your personal health.

Lie #787Obamacare ... (Below threshold)
JLawson:

Lie #787

Obamacare will cost you less, AND you'll get a pony! (Whether you want one or not, I might add. And since it's a government issue pony, you'd better take damn good care of it.)




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