National Review: Health Care, Not A Profit Problem

For an administration that says it’s committed to using empirical evidence to determine “what works,” and a president who says he’s “not an ideologue,” Obamacare’s marketing sure does rely on a healthy dose of fiction. The central inference behind the supposed need to pass Obamacare is that insurance companies are shamelessly gouging us and disproportionately driving up the costs of our entire health-care system. This is demonstrably false. But the Obama administration’s failure to recognize — or to admit — this inconvenient truth, largely explains why its proposed remedies would not only fail to drive health costs down, but would instead raise them up even further.

According to the most recent Fortune 500 rankings, health insurers are not even among the top-30 United States industries in profit-margin. Health insurers rank 35th, with a profit-margin of just 2.2 percent — less than one-fifth the profit-margin of railroads. None of the ten largest American health insurers made profits of more than 4.5 percent, and two of them lost money. Health insurers’ collective profit-margin is less than one-eighth that of drug companies and less than one-seventh that of companies that sell medical products or equipment. It’s also less than that of medical facilities. Yet when was the last time you heard President Obama rail against greedy hospitals? Read More