Another government bureaucracy

Our dear comrade leader is proposing yet another bureaucracy – the Health Insurance Rate Authority. (more here)

The White House (along with the dems in congress and the pundits on the left) is upset with the “massive profits” collected by insurance companies. While they bleat about “billions” in profits at the expense of the sick, they conveniently leave out several key points of information. The two most important of which are expenses and profit margin. I don’t have any numbers on expenses, but the average profit margin in the health insurance industry (across all segments) is about 4%. For those educated in government schools, that means that the insurance industry takes in an average of 4% more than they spend. Not all that much, is it? Generally, profits are reinvested into enhancing profitability (jobs, new technology, etc.) and/or returned to shareholders.

The demonization of business to advance a political agenda is nothing new. They also went after the oil companies for “obscene” profits, citing huge numbers which come from selling lots of product. You don’t hear much about that any more after it was revealed that oil company profit margins were not out of line and, more importantly, that record taxes ($billions) had been paid to the government.

More info on industry profit margins here.

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