Fact checking - health insurer profitability

Like all statistics, numbers can tell different stories, depending on the slant. Back in 1921 Congress enacted a cap on profit margins for insurance companies of 5%. So...of course they aren't going to show a profit margin higher than that. But there's profit...and then there's money.

http://www.nytimes.com/1988/01/13/op...rm-957188.html

....you see that profit from investments is not included in the 'profit margin' that is reported.

"Another result of income investment is that the profits earned through investment are not added back when the insurance industry formulates rates. If we add investment income, the industry's profit margin becomes 19.3 percent - 5 percent over the average Fortune 500 profit margin and well over the Congressionally mandated 5 percent cap." (New York Times)

That probably isn't the whole story either. You can slant numbers this way...and that way...

Just be wary. Consider the sources. Find other sources and see if they agree. And take what BOTH sides say with a grain of salt.

Does Tupperware have a big fancy K street office that forces us to buy crap plastic tubs that are suddenly useless once we need to use them?

I'd feel a lot sorrier for the insurance companies if a) they weren't able somehow to pay their CEOs obscene salaries and give them a batch of 'perks', and b) they actually provided the services we're paying for instead of denying coverage just because they can. :angryfire

They also have probably a trillion or more in assets, such as office buildings, farms, on and on and on........