Health plan profits continue to be a source of debate in the larger conversation about health care reform. While there has been focus on the levels of profits, many independent experts continue to note that health plan profits are not a key driver of increasing health care costs. Below are some key points on health plan profits and fact checks setting the record straight:
Fortune 500 puts the health plan industry profits at 2.2%, 35th on the list. This is below other sectors of the health care industry. Click here for the full list.
For every dollar our nation spends on health care, less than one penny goes towards health plan profits. A sincere cost-containment discussion would focus on the other 99 cents. Check out this document which sets-the-record-straight about health plan profits.
ABC News reports on the attempt of some to vilify health plans by focusing on health plan profits, but as this article points out profits are neither as high as some claim nor are they the main driver of health care costs.
- “…the companies’ profits still represent a miniscule percentage of the $2.5 trillion Americans spend every year on health care.”
- “‘Insurance company profits in the large picture have very little to do with the overall rising cost of health care,’ said health care expert Henry Aaron, a senior fellow at the Brookings Institution.”
The AP does a quick fact check on the claims about health plans’ profits. The article notes that many of the claims being used in the debate are misleading and in some cases wrong. - “Quick quiz: What do these enterprises have in common? Farm and construction machinery, Tupperware, the railroads, Hershey sweets, Yum food brands and Yahoo? Answer: They’re all more profitable than the health insurance industry.”
- “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.”
- “…in pillorying insurers over profits, the critics are on shaky ground.”
According to Ezra Klein, a blogger for the Washington Post:
- “The insurance industry is not a particularly profitable industry.”
- Health plans are “…the 86th most profitable industry as measured by profit margins, with an average margin of 3.3 percent.”
- “…it’s hard to see how [health plan profit margins of 3.3%] are a primary driver of health-care spending, much less the growth in health-care spending.”
