The hubris of supporters, media included, of the Affordable Health Care Act, aka Obamacare, never ceases to amaze me. It begins to look foolish when deception is combined with ignorance. Case in point is writers like these who demagogue the private health insurance industry, portraying them as greedy corporatist one-percenters. Their buzz words. Making money hand over fist.
The health insurance industry isn’t the one to demonize for having excessive profits. On its face, that anyone has the right to decide whether a profit is excessive is preposterous. That’s what fascist economic models are all about. In a free-market economy, consumers, not politicians, decide who survives and who fails in the marketplace. And the profits, if any, are for the owners and investors, the ones who took the risk to offer a product, or service, to sell. Their profits do not belong to the government. Works that way in every industry not government-controlled. Former lefty talk show host Sen. Al Franken and current lefty talk show host Mike Papantonio can tell you about the ups and downs (mostly downs) of Air America Radio.
Lefty Huffington Post declares “Insurer Profits Are Up In The Wake Of Health Care Law They Oppose.” That, referring to a Bloomberg article entitled “Insurers Profit From Health Law They Fought Against.” Which morphs into this on far left Ring of Fire Radio1, “Health Insurance Make Threats to Spike Rate, Despite Record Profits.”
Faced with the reality that Obamacare is going to force insurance carriers to raise their premiums or go out of business, the meme is all about those mean rich insurance companies, already raking it in, and wanting to gouge consumers even more. One problem, and here’s where the ignorance and demagoguery comes in. The articles wrap their argument around net income and operating profit margins. Neither of which are net profit.
They don’t know what they’re talking about, and they’re spreading a false narrative to demonize insurers and idolize Obamacare.
What is a profit margin? It is the percentage of the income that is left over after all expenses. The numbers in the HuffPost/Bloomberg source are of operating margins and do not include expenses like interest payments, tax, depreciation, and amortization. After paying those expenses, you are left with the net, as in last, profit margin.
The profit margin for the Health Care Insurance industry is 3.5%. Ask yourself how they are to stay in business when the federal government under Obamacare expects them to hold or lower premiums, accept all pre-existing conditions, and add 20 or 30 million more policyholders on a 3.5% margin? It can’t happen. And that is Obama’s intent. It will cause the health insurance providers to drop that part of their business and insure something else or just fold. At that point, Obama reaches nirvana. A total single-payer government-run health care system that will be less efficient and more expensive than ever.
To add a little perspective that the Left doesn’t want you to know, here are the profit margins of other industries.
- Beverages 25.9%. Included in that percentage are Breweries 37.3%, Soft Drinks 13%
- Biotechnologies 16.1%
- Banks 13.7%
- Oil & Gas Drilling and Exploration 10.3%
- Gas Utilities 7.7%
- Food 7.2%
- Electric Utilities4.9%
- Oil & Gas Pipeline 4.1%
- Health Care Plan Providers 3.5%
Law firms go from 5% to 60%, and average out at 30%. Wouldn’t it be interesting to know how greedy, by their own standards, the Levin-Papantonio Law Firm is? Makes one wonder what their profit margin is?
1Ring of Fire is hosted by Mike Papantonio, senior partner in the Levin-Papantonio Law Firm in Pensacola, FL. Specializing in mass torts, suing drug companies, car manufacturers, tobacco companies, personal injury, product liability, medical malpractice, slip and falls, and more.