By Tom Blumer
NewsBusters.org
October 26, 2009
It would appear that the Associated Press has nominated Calvin Woodward to be their go-to guy for “Fact Check” pieces that blow up political arguments and assertions by the White House and partisan Democrats…
…In today’s Fact Check (“Health insurer profits not so fat”), the AP writer ripped into what has seemingly been a mandatory talking point any time a Democrat brings up health care: the supposedly excessive profits of health insurance providers.
Woodward found that the Democrats’ claim doesn’t survive even cursory scrutiny:
…In the health care debate, Democrats and their allies have gone after insurance companies as rapacious profiteers making “immoral” and “obscene” returns while “the bodies pile up.”
Ledgers tell a different reality. 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.
Profits barely exceeded 2 percent of revenues in the latest annual measure. This partly explains why the credit ratings of some of the largest insurers were downgraded to negative from stable heading into this year, as investors were warned of a stagnant if not shrinking market for private plans.
Insurers are an expedient target for leaders who want a government-run plan in the marketplace. Such a public option would force private insurers to trim profits and restrain premiums to compete, the argument goes. This would “keep insurance companies honest,” says President Barack Obama…
…. Health insurers posted a 2.2 percent profit margin last year, placing them 35th on the Fortune 500 list of top industries…
The article continues at NewsBusters.
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More from GatewayPundit… This year, during the worst recession since the Great Depression, the average member of Congress will realize a 2.8 percent raise. That means their profit margin is larger than the insurance companies they are demonizing.
