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Just the facts! Well what do you know, They lied.

By Terry Miller

Real Estate Broker/Owner with Miller Homes Group

October 25, 2009 04:42 AM

THE CLAIMS

_"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 MoveOn.org ad.

THE NUMBERS:

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.

Van Hollen is right that premiums have more than doubled in a decade, according to a Kaiser Family Foundation study that found a 131 percent increase.

But were the Bush years golden ones for health insurers?

Not judging by profit margins, profit growth or returns to shareholders. The industry's overall profits grew only 8.8 percent from 2003 to 2008, and its margins year to year, from 2005 forward, never cracked 8 percent.

The latest annual profit margins of a selection of products, services and industries: Tupperware Brands, 7.5 percent; Yahoo, 5.9 percent; Hershey, 6.1 percent; Clorox, 8.7 percent; Molson Coors Brewing, 8.1 percent; construction and farm machinery, 5 percent; Yum Brands (think KFC, Pizza Hut, Taco Bell), 8.5 percent.

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Donna J. Stephens

BHHS Ambassador Real Estate - Omaha, NE

CRS

Interesting. I see some of the companies we have direct contact with in the mix. My health insurance, my husband is a railroader. I am interested in these facts. Thank you for posting.

Oct 25, 2009 04:50 AM

Paul S. Henderson, REALTOR®, CRS

Fathom Realty Washington LLC - Tacoma, WA

South Puget Sound Washington Agent/Broker!

It seems Terry as if some in Congress engineer numbers to support their views!

Oct 25, 2009 04:54 AM

Charlie Gantz

Keller Williams Commercial, Tampa Bay - Saint Petersburg, FL

J.D., M.B.A.

Thanks for sharing your economic research with us. You didn't mention your source but the numbers certainly add arguing points to the Congressional discussion. Charlie Gantz, Greenwood, IN; J.D., M.B.A.; Owner/Principal Broker, Atlas Commercial Real Estate, LLC

Oct 25, 2009 05:01 AM

Terry Miller

Miller Homes Group - Tyler, TX

Miller Homes Group and Tyler Apartment Locator

Source is MY Way and Associated Press writer Tom Murphy in Indianapolis

Oct 25, 2009 05:18 AM

TIM MONCRIEF

Tim Monciref - Austin, TX

Over 2,000 homes sold…..

Nice post. So few know how low profit margins are with most companies. You did forget about the real estate industry and how Bush has improved our profit margins. Cheers....

Oct 25, 2009 05:47 AM

Mike Saunders

Retired - Athens, GA

Terry- interestingly, education costs, especially college eduation costs, have been going up at twice the rate of medical and insurance costs in the last 10 years, why is not congress, or any one else on the left making an outcry about that?

Oct 25, 2009 06:55 AM

Wallace S. Gibson, CPM

Gibson Management Group, Ltd. - Charlottesville, VA

LandlordWhisperer

I am ALWAYS amused when they say the "xxx company's OBSCENE profits".....the SHAREHOLDERS who INVESTED in these companies EXPECT a profit on their INVESTMENT.

The OWNERS of these companies making these OBSCENE profits are pension funds, 401k funds, and the share holders * the US citizens who have elected to take the gamble!!!

Oct 25, 2009 07:25 AM

David Holzmann

Holzmann & Associates - Mountain View, CA

Far too many don't know the difference between Gross Revenues (I think that would be equivalent to the sum of Gross Premiums for the Insurance Industry), Costs, and Profit Margins (the percentage difference between Gross Revenues and Total Costs.)

But I imagine those in Congress and this Administration who are screaming the loudest about "obscene profits" ARE, in fact, aware of the difference, and ARE aware that most people are ignorant of the difference, and therefore, they know they can get away with trumpeting misleading information... factual or not.

One comparison I'd be curious to see: Profit Margins of each business/industry that's being targets as compared to the Profit Margins of businesses owned or closely tied to those who are screaming. (For example: How do the Health Insurance Companies' Profit Margins compare to Heinz's Profit Margins? Or what about the company (or companies) owned by Pelosi and/or her family members?)

Oct 25, 2009 10:10 AM

David Holzmann

Holzmann & Associates - Mountain View, CA

Just looked up Heinz. According to this article, their most recent quarterly gross profit margin was down a bit:

"Commodity inflation pressured pricing and productivity improvements for the quarter-ended July 29, with gross profit margin falling 80 basis points to 35.4 percent."

That's almost 700% greater than the most profitable of the Health Insurance Companies, and more than 1600% greater than the average Health Insurance Company.

If the Health Insurance Companies' Profits are "obscene", what does that make Heinz' Profits? And what is Congress doing about this much more egregious "offender"?

Oct 25, 2009 10:23 AM

Terry Miller

Miller Homes Group - Tyler, TX

Miller Homes Group and Tyler Apartment Locator

Theresa Heinz of course a flaming lib......

Oct 25, 2009 11:21 AM

William Feela

WHISPERING PINES REALTY - North Branch, MN

Realtor, Whispering Pines Realty 651-674-5999 No.

That is one thing that needs to be given when profits are reported. The % the profit is. That way, the general public can see what they would make if they invested in that company, and compare it to a CD rate or what ever they have.

Oct 25, 2009 11:25 AM

Delaware Junk Removal Residential And Commercial Hauling Clean Outs

Delaware Junk Removal 302-530-9186 - Wilmington, DE

Whole House Clean Outs, Basements, Garages, Attics

Terry- When the obama cartel starts talking again about how lenders make too much money and Realtors also things may change in the rain?

Oct 25, 2009 02:06 PM

Hugh Krone

Weichert Referral Associates - Hamburg, NJ

Realtor, Sussex County NJ

Terry,

Lying has become such an accepted way of life for far too many people. Politicians especiallly

Oct 25, 2009 03:44 PM

Jon Budish

Resident Realty - Fort Collins, CO

As you know, Bush had nothing to do with insurance providers increase, or decline in profits. The only reason Libs talk their nonsense, is because they know their brain dead constituency will believe every word they babble!

Oct 26, 2009 04:17 AM

Jay-Paul Lowry

Riverside, CA

did you fact check a statement/claim from the left. thats just immoral. you should be ashamed.

on a serious note, 2.2% profit margin is just too large for my taste. that is unethical, they should be forced to donate to ACORN. okay that wasnt so serious.

Like i said in my last post (that was featured than not featured on AR's home page), you cant make money in this country any more and if you do, you are criminal or shark who takes advantage of people.

JP Lowry

Oct 26, 2009 07:09 AM

Delaware Junk Removal Residential And Commercial Hauling Clean Outs

Delaware Junk Removal 302-530-9186 - Wilmington, DE

Whole House Clean Outs, Basements, Garages, Attics

JP- Have you ever heard of the "Stop fraud act" the only bill obama proposed? Check this out!

http://activerain.com/blogsview/397756/should-lenders-spend-35-years-in-jail-

Oct 26, 2009 03:44 PM