Tribune Washington reporter Noam Levey reported that “the five largest health insurance companies racked up combined profits of $12.2 billion” in 2009 (http://seattletimes.nwsource.com/html/nationworld/2011050573_healthprofits12.html).
I’m sure there are many ways to spin this, but I’m not at all impressed that this is the cause of the high cost of health care. When the nation spends hundreds of billions, $12 billion in profit isn’t that striking. The article reported that profit margins for these large health insurers ran from roughly 3 percent to 7 percent, the higher numbers in part due to sale of part of the company. Growth in the stock market could have contributed as well.
We need to fix our health care system, no doubt about it. Demonizing one sector — like health insurers — is not the answer. Someone has to take responsibility for controlling costs. Right now, our third party payment system has taken much of that responsibility off of patients. That leaves high costs or rationing as the other options, neither of which is particularly palatable.