Wednesday, January 12, 2011

How much of health insurance premiums is profit

How much of health insurance premiums is profit?
Our local paper today reports 60% of the cost of the premium is profit to the insurance company. Can this be verified? If it's true, then it puts a new light on the subject of rising premiums and health care reform.
Politics - 7 Answers
Random Answers, Critics, Comments, Opinions :
1 :
Your local paper is full of chit. There is the possibility that the idiot writing the story doesn't know what "profit" is. Premium income at an insurance company in a given year is generally approximately equal to operating costs.
2 :
you just nailed the exact reason healthcare / insurance should not be profit motivated
3 :
If an insurance company could bring in 60% profit then overnight all the money in the world would be invested in them. Their stock would be selling for 10,000,000,000 a share or even more. They make a profit in line with the risk and government take over is one of the risks driving the value of the stock down into the toilet.
4 :
I've heard thirty percent. Either way its repulsive, as that means that money isn't going to pay the light bills of the insurance company or their workers, it is profit on the health of the sick people they are supposed to be paying for.
5 :
60% is the standard profit margin for most goods and services. Think of insurance as a guarantee to help you pay for a common commodity, like beer. For every dollar you pay in beer insurance, you are guaranteed to get a $2.00 beer for $1.60. In other words the beer insurance covers the extra 40 cents. If the price of beer goes up, your premium will also go up at a corresponding rate. You may also see a rise in your beer premium to pay for losses in the whiskey insurance sector. That is how health insurance works. you pay them to pay out some of what you paid them to the actual provider of health care. You also pay the provider a copay amount.
6 :
I would say that is pretty close, considering the pay of the CEOs, Lobbyists, advertising, profit for the share holders, and a huge expense is the monies to the politicians. From 2000 to 2006, republicans received 2/3 of all the monies donated..millions! That is really expensive. All this information is available on the internet. It amazes me that this scam has gone on as long as it has...the American people who are against reform are foolish.
7 :
18,000,000,000 profit 2,000,000,000 overinflated salaries and bonuses for denying coverage!!!!!! The idiot writing the story right. Premium income is not profit. Nice try. You work for the insurance company?

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