Under Reporting as a Form of Bias
The fact that the profit margins of health insurance companies are not very large has been under reported. This is surprising given that a major justification for universal health care is to save money by eliminating the profit motive. An AP report finds:
Quick quiz: What do these enterprises have in common? Farm and construction machinery, Tupperware, the railroads, Hershey sweets, Yum food brands and Yahoo? Answer: They’re all more profitable than the health insurance industry. 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.
In many ways, this is a direct repudiation of the major justification given for universal health care and yet its only now being reported. But lets flip it, and lets say that heath insurance companies profits were some of the highest of all industries. Do you think the press would only now, nine months after the first push for universal healthcare, report on it. I suspect had insurance companies had much larger profit margins we would of heard about it right from the very beginning.
Such differential treatment, if true, is called bias. I wonder if the Obama administration is going to declare all the news organization that failed to report a major contradiction to his justification for healthcare non news organizations. I won’t hold my breath.