Fact Check: Health Insurer's profits not so fat

[sinner/SAVED]

United Health Care profits doubles in one year (during a recession no less).

 

[Veritas]

From a liberal POV, health insurers should not be making any sort of profit. All the employees from the CEO to the admin. assistant in the claims paying dept. should work for free...you know, volunteer. By eliminating compensation overhead, we could lower premiums to say, $25 month per person. Of course, that wouldn't be too satisfactory for some who would continue to demand a gov. option with no charges. Then the march toward communism would be complete!

 

[Veritas]

United Health Care profits doubles in one year (during a recession no less).

Article title is misleading. The profits didn't actually double, the earnings did. There is a difference between earnings and profit. Now unless you have a subscription to the WSJ, which I doubt, you can't read the entire article where it explains this. But if you took the time to read the link in the OP, you'd have read this:

"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."

Let me explain this for you. If UHC posted an 8 % growth in revenue and that was double what it was for the previous year, then they weren't doing great to begin with. A 5% profit margin isn't huge. Do you understand that? Further, the industry as a whole is suffering:

"Profits barely exceeded 2 percent of revenues in the latest annual measure. This partly explains why the credit ratings of some of the largest insurers were downgraded to negative from stable heading into this year, as investors were warned of a stagnant if not shrinking market for private plans."

If liberals are so upset about what are really lackluster profits on the part of the health insurance industry, why are they ignoring the much greater profits of Big Pharma? Is it because they are in bed with them?

 

[jamesrwright3]

Grocery stores are about 2%. Let's demonize them. Food is more immediately necessary than health insurance.

I hate paying for food. I want my free lunch. Where is the Obama food plan?

 

[nvxplorer]

I hate paying for food. I want my free lunch. Where is the Obama food plan?

It's called Food Stamps, and it's not Obama's plan. Feel free to apply.

 

[jamesrwright3]

It's called Food Stamps, and it's not Obama's plan. Feel free to apply.

And people can get health care-it's called Medicaid. Why do we need a government plan?

 

[sinner/SAVED]

Article title is misleading. The profits didn't actually double, the earnings did.

No the title is correct, PROFITS doubled:

UnitedHealth Group Inc.'s second-quarter earnings more than doubled amid prior-year charges and an increase in revenue, though enrollment continued to decline as U.S. unemployment mounts.
The health insurer, whose earnings topped analysts' expectations, raised the lower end of its 2009 forecast by 10 cents and now expects a profit of $3 to $3.15 a share.
Health insurers profits remain under pressure from rising medical costs and falling enrollment, while expecting payments from their government plans to fall. The industry has been trying to discourage Washington from establishing competing public plans as the health-care debate continues.
UnitedHealth reported a profit of $859 million, or 73 cents a share, up from $337 million, or 27 cents a share, a year earlier. Revenue increased 7% to $21.66 billion.

There is a difference between earnings and profit. Now unless you have a subscription to the WSJ, which I doubt, you can't read the entire article where it explains this. But if you took the time to read the link in the OP, you'd have read this:

"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."

I don't know why you would doubt my subscription, I do own my own company with 20+ employees and ? (a very high number) in annual sales.

I have a very firm understanding of earnings and profit. The OP article is the one that is making false claims. UHC's PROFIT more than doubled. See above from the WSJ.

Let me explain this for you. If UHC posted an 8 % growth in revenue and that was double what it was for the previous year, then they weren't doing great to begin with. A 5% profit margin isn't huge. Do you understand that? Further, the industry as a whole is suffering:

"Profits barely exceeded 2 percent of revenues in the latest annual measure. This partly explains why the credit ratings of some of the largest insurers were downgraded to negative from stable heading into this year, as investors were warned of a stagnant if not shrinking market for private plans."

A 5% profit is HUGE for companies of that size. I would LOVE a 5% profit.

 

[nvxplorer]

And people can get health care-it's called Medicaid. Why do we need a government plan?

Medicaid is a government plan.

 

[jamesrwright3]

Medicaid is a government plan.

I know, but Obama needs to do something about those evil food companies. I could use more food, but can't afford it since all of those food companies want to do is make more profit. Obama needs to get food reform passed to give more of the people's money back to them and out of the hands of those food profiteeers.

 

[JoyJuice]

I know, but Obama needs to do something about those evil food companies. I could use more food, but can't afford it since all of those food companies want to do is make more profit. Obama needs to get food reform passed to give more of the people's money back to them and out of the hands of those food profiteeers.

I have never heard of anyone declaring bankrupcy because of the cost of food.

I mean.....is this the argument you really want to put forward or did you mean for this to be taken with a large grain of salt?

 

[lordbt]

I have never heard of anyone declaring bankrupcy because of the cost of food.

They would likely starve to death first.

 

[Veritas]

I hate paying for food. I want my free lunch. Where is the Obama food plan?

Me too.

Medicaid is a government plan.

And it's so efficient. That's why we want an identical food plan but where anyone who wants can sign up.

I have never heard of anyone declaring bankrupcy because of the cost of food.

That's because we have the food bank and food stamps. And by the looks of it, most poor are the most obese. I don't think they're starving either. However, they do represent the highest cost for health dollars. While we're discussing national healthcare, why not put further restrictions on how food stamps (or more accurately food credit cards) can be spent. Losing weight could improve their health and reduce their cost to any healthcare system.

 

[JoyJuice]

They would likely starve to death first.

There may be cases where people starve to death in America, but one would have to dig deep, but there are easily documented cases where people by the thousands die because of lack of healthcare.

Again, my point was that was one weird point of contention.

 

[sinner/SAVED]

Our local public elementary school opened the lunchroom every day over the summer because over 50% of the students get food ONLY at school. Yes, people are starving in the good ole USA.

 

[TheNewWorldMan]

From a liberal POV, health insurers should not be making any sort of profit. All the employees from the CEO to the admin. assistant in the claims paying dept. should work for free...you know, volunteer. By eliminating compensation overhead, we could lower premiums to say, $25 month per person. Of course, that wouldn't be too satisfactory for some who would continue to demand a gov. option with no charges. Then the march toward communism would be complete!

Hogwash.

No one is saying the insurance companies shouldn't enjoy a fair return on investment. It's the cashing in at two to four times the rate of inflation for two decades now that we're sick and tired of. There's a difference between profiting and profiteering.

 

[jamesrwright3]

There may be cases where people starve to death in America, but one would have to dig deep, but there are easily documented cases where people by the thousands die because of lack of healthcare.

Again, my point was that was one weird point of contention.

It's just as difficult to find someone that has died because they couldn't get medical attention.

And I am sure it would not be as hard to find people who go to bed hungry and are malnourished in America.

 

[JoyJuice]

It's just as difficult to find someone that has died because they couldn't get medical attention.

And I am sure it would not be as hard to find people who go to bed hungry and are malnourished in America.

According to the American Journal of Public Health (that's right peer reviewed) it's not that hard to all.

 

[jamesrwright3]

But 1 in 10 Americans went hungry last year-a total of 35 million people.

One in Ten Americans Went Hungry Last Year | | AlterNet

Food reform is much more important than health care reform. Far more people are affected. Please tell Obama we need an expanded government food program.

 

[DaisyDay]

But 1 in 10 Americans went hungry last year-a total of 35 million people.

One in Ten Americans Went Hungry Last Year | | AlterNet

Food reform is much more important than health care reform. Far more people are affected. Please tell Obama we need an expanded government food program.

There has been an effort in food reform. Much of it is educational, but school lunches have also become healthier. Fewer schools give contracts to candy & soda merchants to supply vending machine snacks.

 

[JoyJuice]

But 1 in 10 Americans went hungry last year-a total of 35 million people.

One in Ten Americans Went Hungry Last Year | | AlterNet

Food reform is much more important than health care reform. Far more people are affected. Please tell Obama we need an expanded government food program.

Being hungry, kind of like being hurt, is not the same as being dead.