NPR’s health policy correspondent Joanne Silberner asks, “Are Insurers’ Profits As Low As They Claim?“ The Wall Street Journal asks, “Will a Public Option Hurt Insurance Company Profits?“
It seems like everyone is talking about health plan profits, which is ironic given that health plan profits are pretty small in the scheme of things (which is pretty much the point of the above-referenced WSJ article).
Trade group America’s Health Insurance Plans touts the fact that industry profits account for just three cents of every healthcare premium dollar – a margin of about 3%. As a percentage of total U.S. healthcare expenditures, it’s even less. The nation’s publicly traded managed care plans have margins in the 4% to 5% range.
Said another way, total health plan profits — if simply donated to cover the cost of healthcare reform — would foot about one tenth of the bill.
Granted, it’s not nothing, but it does seem to me that there are bigger fish to fry on the provider and pharma side. As for managed care, my biggest complaints are the high administrative costs and the coverage and care denials that leave patients’ holding the bag (profit motives playing a role in the latter). Healthcare reform and the right regulation — even without a public plan — would help.
Source: America’s Health Insurance Plans
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