AHIP either lying or very misleading

Over at the Huffington Post they are reporting (original reporting from AP) that the industry lobbyists, American Health Insurance Plans (AHIP), is defending the rate increases of it members health insurance plans:

Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, said insurance industry workers “do not deserve to be vilified for political purposes. … For every dollar spent on health care in America, less than one penny goes toward health plan profits. The focus needs to be on the other 99 cents.” AHIP plans to spend more than $1 million to run television ads on cable stations nationwide beginning in the next few days to push back on the attacks on insurers.

So less than 1 percent spent on health care goes to profits.  This could be true, as the government spends much of the money spent on health care in the country, and they aren’t a for profit entity (look at the debt for proof).

But I think that isn’t the best measure, I think it would be best to look at what some of the for profit health insurance companies get in profits in comparison to their revenue.  I used 2008 Fortune 500 data and it paints a more profitable picture, out of the Fortune 150, these are the five companies whose names I recognized as being health insurance providers, the rest of the data speaks for itself.

So back to the original point, AHIP could be telling the truth if they count all the money that is spent on health care in the US, including that spent by the government and non profit insurance companies, both of which would bring down the average.  But when we look at five of the largest health insurance companies in the US, the data shows profit margins that are anywhere from 3.3 pennies to 6.6 pennies on the dollar, much higher than AHIP would have you believe, either as an out and out lie, or a masterful deception of gaming the numbers.

-Josh

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