Spurred on by the President’s rhetoric, many Americans believe that insurance company profits are the cause of high health care costs and premiums. The facts are otherwise of course, but the perception persists.
Look at the informal poll I am taking (right margin) and you will see close to 20% of those casting their vote (as of April 26) believe insurance company profits are the MOST significant cause of high health care costs.
Let’s look at some numbers. WellPoint, one of the largest health insurance recently reported a profit of $856.5 million. That’s a lot of money to be sure and no doubt some politician would be delighted to talk about record profits (which it isn’t by the way). Now consider that WellPoint had 33.7 million members as of March 31. Do some simple math and you see that the profit is equal to $25.42 per member. Even given a family of four may be counted as four members, that’s $100.84 a year out of a total premium of perhaps $12,000 or more. At the same time WellPoint reported a loss ratio of 83.3% meaning over 83% of each premium dollar was used to pay claims.
So, what is the most significant cause of high health care costs? Cast your vote.
QUINNSCOMMENTARY 
If you are correct that the company’s profit, after paying claims, was $800 million plus, it sounds like the company could lower their premiums and still make a lot of money. I do want them to make money, believe me.
i don’t think the health care issue will be solved untile the problem of cost is considered. Hosptial cost (equipment, buildings, ect.) doctor fees and medical devices and salaries paid to the salesperson of the equipment and devices.
thanks,
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But you have to remember that number is based on volume, that is 33 million lives. Isn’t what they make per contract the real issue?
You could say the same thing about GM and the price of each car.
Dick
Richard D Quinn Editor Quinnscommentary.com
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You are right. The fundamental issue is the underlying cost of care and all that makes it up. Unfortunately, Obamacare adds to those costs for hospitals, drug companies, equipment manufactures and even doctors through direct fees and new taxes and reduced payments that will be made up somewhere.
Dick
Richard D Quinn Editor Quinnscommentary.com
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