Ron Fournier, Washington, DC Associated Press Bureau Chief who has been accused of inappropriate partisanship tweets this Calvin Woodward “Fact Check,” commenting “Think of insurance companies as rapacious profiteers? Think again.” Thank goodness someone finally decided to debunk this most pernicious and perfidious myth:
WASHINGTON – In the health care debate, Democrats and their allies have gone after insurance companies as rapacious profiteers making “immoral” and “obscene” returns while “the bodies pile up.”
But in pillorying insurers over profits, the critics are on shaky ground. Ledgers tell a different reality.
Health insurance profit margins typically run about 6 percent, give or take a point or two. That’s anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones.
It might be true that of health care industries, insurers make the least money, and it might be true that relative to other types of insurance, health insurance isn’t wildly profitable. But the point isn’t the level of profits, the point is that in order to make a profit, private health insurers deny care out of hand, exploit preexisting conditions, and through a particularly unseemly practice called “rescission,” pour over medical histories to find previously unreported — and frequently totally unrelated — conditions to invalidate insurance contracts when patients need them most. Studies have found some 12.3 million Americans were discriminated against for pre-existing conditions in the past 3 years, and roughly 20,000 Americans had policies canceled through rescission over the past 5 years (foisting on individuals a total of $300,000,000 in medical bills they expected insurance to cover).
So, is it true that margins on private health insurance aren’t astronomical? Sure. But reformers’ contention has always been that the margins that do exist owe substantially to denying medical services and care to people who actually need it. As the “Fact Check” itself notes, the words used by Democrats are “obscene” and “immoral,” which believe it or not, don’t actually connote a level at which profiting from denying medical care is just, virtuous, or good. Perhaps someone would like to venture an acceptable profit level for contributing to the bankruptcies of 930,000 Americans per year, or worse, the 45,000 Americans who die each year because they lack health insurance?