Comments and observations on social and political trends and events.

Monday, October 26, 2009

The Truth About Health-Insurance Industry Profits by Robert Bidinotto

In a rare, refreshing example of real journalism in the mainstream media,Associated Press actually fact-checked Democrat claims that insurance companies are making obscene profits, while they let sick people die. According to this narrative, we need a "public option" in health-care reform to compete with these rapacious companies, to drive down their outrageously high premiums, and to "keep them honest."

But, what are the facts? A.P. checked and discovered its all a pack of lies:

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. . . .

But in pillorying insurers over profits, the critics are on shaky ground. A look at some claims, and the numbers:


_"I'm very pleased that (Democratic leaders) will be talking, too, about the immoral profits being made by the insurance industry and how those profits have increased in the Bush years." House Speaker Nancy Pelosi, D-Calif., who also welcomed the attention being drawn to insurers'"obscene profits."

_"Keeping the status quo may be what the insurance industry wants their premiums have more than doubled in the last decade and their profits have skyrocketed." Maryland Rep. Chris Van Hollen, member of the Democratic leadership.

_"Health insurance companies are willing to let the bodies pile up as long as their profits are safe." A ad.


Health insurers posted a 2.2 percent profit margin last year, placing them 35th on the Fortune 500 list of top industries. As is typical, other health sectors did much better - drugs and medical products and services were both in the top 10.

The railroads brought in a 12.6 percent profit margin. Leading the list: network and other communications equipment, at 20.4 percent.

HealthSpring, the best performer in the health insurance industry, posted 5.4 percent. That's a less profitable margin than was achieved by the makers of Tupperware, Clorox bleach and Molson and Coors beers.

The star among the health insurance companies did, however, nose out Jack in the Box restaurants, which only achieved a 4 percent margin.

UnitedHealth Group, reporting third quarter results last week, saw fortunes improve. It managed a 5 percent profit margin on an 8 percent growth in revenue.

In short, private health-insurers are already squeezed to marginal profitability. Knowing this, what do you suppose is the motive of Democrats -- whose leadership, from the White House down, is dominated by advocates of "single-payer" government-run health insurance -- in wanting to further squeeze private insurers? When they say they want "Medicare for all Americans," what do you suppose they wish to happen to private insurers?


This debate is not about controlling health-care costs. It is about controlling your health care -- period. Share the facts with your congressman and senators, and let them know that their political futures depend on their strangling the ObamaCare monster in its crib.

Sunday, October 11, 2009

The Nobel quest for mediocrity from The American Thinker

The Nobel quest for mediocrity

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Key quotes:

It is no secret that influences and finances from outside the United States helped create the Obama presidency; one example being George Soros. It is also no secret that President Obama intends to reshape the United States into the image of Europe. However, Europe has been economically stagnant for decades. Only by the weakening of the United States' economic system can Europe's socialistic and economic stagnation be reduced. The strengthening of Europe's socialistic and economic system can only take place by the weakening of the American system.

The Nobel Peace Prize Committee is an extension of the Norwegian Parliament, which is a foreign government. Last week the politically-controlled Nobel Peace Prize Committee awarded President Obama the Nobel Peace Prize not for his mediocre achievements, but as President Obama acknowledged, for his "call to action". It was an award for decisions yet to be made, otherwise known as a bribe. The more President Obama is "called to action" by outside influences, the strengthening of the European Union will continue at the cost of the United States.

Saturday, October 10, 2009

Megan McArdle's Controlling Healthcare Costs The American Way: Not Doing It

Megan McArdle posts an
excellent analysis why we should not believe the mantra we're hearing that the proposed health care bill will save money or at worst be revenue neutral. As she points out,

we've got a single payer system, called Medicare. It negotiates huge cost discounts with providers. It has low administrative costs. It has a gigantic apparatus to evaluate reimbursements for various treatments. It has . . . a faster rate of per-capita cost growth than the rest of the health care system, according toa CBO report issued by one Peter Orszag.

After showing how health care rate of increase in costs in Massachusetts have accelerated she asks a good question:

so I'll turn it around on reformers: why do you think that we can control costs, given that we couldn't at the state level? Massachusetts is a very liberal state, a very rich state, and it started out with a relatively low proportion of its citizenry uninsured. Proponents of reform often say it has to be done at a national level because states can't borrow money in downturns, but this doesn't explain why the spending side is headed through the roof.

Thursday, October 8, 2009

The Baucus Bill: Nationalized Stealthcare by Robert Bidinotto

In the wake of the Congressional Budget Office (CBO) "scoring" of the so-called Baucus plan -- the Senate Finance Committee version of ObamaCare -- the mainstream media and the Democrats are gleefully trumpeting it as a financially responsible and "deficit neutral" approach to nationalized health insurance. But what is the truth?

For those of you who want to read the CBO report, rather than rely on MSM "spin" about it, here is the actual letter sent to Congress by the CBO chief.

Several preliminary observations:

1. Please note page 12 – the assumptions underlying the "projected savings" in the plan. The CBO notes that Congress or administrators, under various political pressures, "frequently" change the reimbursement rules in later years so that the "projected savings" never materialize. Think this bill will be any different? Do you believe in the Tooth Fairy?

2. Please keep the bigger picture in mind: This is a whopping new entitlement program, projecting massive government spending increases. The "deficit neutrality" claimed by the CBO for the Baucus version, which will spend nearly a trillion dollars, comes only by increasing taxes and insurance premiums, while slashing payments for medical services. You can certainly cover any deficit by raising taxes or by cutting government services -- and that's exactly what the Baucus bill proposes. It plans $200+ billion in tax increases on "high-premium insurance policies" (see p. 2), plus additional billions in revenue from various penalties to be imposed on individuals and businesses (p. 5), plus a whopping $404 billion in cuts to current Medicare and Medicaid reimbursements to medical-care providers (p. 6). This latter will pressure doctors, hospitals, medical-device manufacturers, etc., to reduce treatments, or even to leave the business.

3. Simultaneously, the plan will subsidize coverage and care for millions of lower-income people, plus millions of the previously uninsured (p. 10). This will dramatically increase demand for health-care services, while the slashed reimbursements to medical providers will discourage their participation, thus cutting the supply of health-care services. Follow the logic: Soaring demand against shrinking supply will necessitate medical-care shortages -- and shortages will lead to governmental rationing of medicine and medical treatments. We will thus follow the dark path of other socialized-medicine nations all over the world.

4. The legislation will establish government-funded nonprofit co-ops to compete with private insurers (p. 4). Ask yourself how for-profit companies can possibly compete with government-assisted nonprofit co-ops -- especially when the government will be writing the rules for the former, such as those listed in the next point.

5. Insurers would be mandated to accept all comers, could not deny people with pre-existing conditions, and could not vary premiums on the basis of people's health (p. 4). This means obliterating the entire actuarial basis of insurance as such, which adjusts premiums according to risk; risk considerations are now banished, by law. In short, insurance is replaced by anentitlement to health-care coverage.

6. All individuals will be required by law to buy insurance, whether they want it or not, or have to pay a hefty fine to the IRS if they don't (p.1).

The Baucus plan will be "deficit neutral" only if it goes through Congress without further amendments that will jack up its costs (please!), or if future Congresses and bureaucrats don't fudge with the reimbursement rates (ha!) -- and, in any case, only by virtue of massive new taxes, which will be passed along to all of us in the form of higher charges and premiums.

Like all the other competing congressional bills, this is not an insurance plan at all; it's an enormous new government health-care entitlement program. Though the Baucus version doesn't include an explicit "public option," it won't require one in order to undermine our private-insurance, private-health-care industry. The provisions of the Baucus plan will effectively socialize medical care in the United States, transforming insurance companies into public utilities and conscripting all Americans into the role of involuntary customers of the insurance utilities -- under penalty of fines or jail.

Who are the victims of this plan?

Doctors and other medical-care providers will find their incomes slashed in two ways: first, by huge cuts in reimbursements from Medicare and Medicaid, and second (if House funding provisions are included) by massive tax increases on "the wealthy" (which means: doctors). This will discourage them from participating in the plan, or even staying in business. Meanwhile, businesses will be subject to a host of new regulations and potential penalties and costs under the various "mandates" in the plan.

Who else will suffer under the Baucus bill?

If you are young and healthy, your health-insurance premiums will skyrocket to subsidize those older and less healthy.

If you have freely chosen not to buy health insurance in the past, you'll be forced to do so now, spending a lot of money on something you didn't want and may not need.

If you are old and sick, your range of treatments will be slashed as government cuts reimbursements to health-care specialists like cardiologists and oncologists.

Finally, remember: The Baucus bill now will have to be merged with another even-more-leftist bill from another Senate committee -- then subjected to special-interest amendments on the Senate floor –then further reconciled, in a closed-door House-Senate conference committee, with the even more ultra-left House version of the legislation. All this before a final vote and passage. In short, horrible as it is now, it will only get worse as it moves through Congress.

In sum, the Baucus plan is not any sort of "moderate" alternative to the more overt socialism in the House bills. It's merely socialized medicine by stealth -- a plan that will, in time, destroy the tattered remnants of private medical care in America.

Do you want to stop this monstrosity and save your freedom? Then it's time to get off your rear end and join an organized Angry Mob. Time to send out letters of protest to newspapers and to your representatives. Time to shut down congressional email and phone lines with irate messages



Don't make excuses. Our nation's Founders endured far greater perils and inconveniences to stand against a far less intrusive threat to liberty. Can our commitment be any less?