2012 conventions 2012 election 2013 session 2013 special election arts arts and culture author ballot measures basketball bomb books boy scouts budget bullying business charlie hales children clackamas climate change coal college courts crime culture culture club democrats drugs economy education environment family film fluoride food gay rights guns handguns health health care health insurance high school history housing immigration international internet kitzhaber law legislature lgbt literary arts living marijuana marriage media medicine mental health military minor parties mohamed mohamud movies music native americans news newspaper obama olympics oregon our town parenting pers photography police politcs politics port portland portland business journal president prevention public safety religion republicans rnc romney rural salem sam adams sandy hook schools science shooting sports suicide supreme court taxes technology television terrorism theater third parties transportation union university of oregon washington wildfire women

There has been a lot of discussion about the recent published profits of health insurance companies, both in raw dollars and as a per cent margin.  I don't think either of these statistics are important.  Non-profit organizations, such as the Red Cross, show zero profit, but can pay their executives bloated compensation packages and/or present high overhead limiting the resources directed at their primary missions.

I think of insurance companies as similar to non-profits.  I don't really care if they profit or not except that the margin subtracts what is paid out in medical support for their customers.  The important figure is the percentage of their premium income that is paid out as benefits to their subscribers.  They fare poorly as compared to Medicare in this regard.

To make a profit, to the extent possible, they (1) insure people who never get sick; (2) deny benefits against claims; (3) exercise recission or skyrocketing premiums against subscribers for whom they actually pay out claims; and (4) apply larger and larger annual deductibles.

posted 3 years, 2 months ago
view in context