Clay Putnam, CGCS said:
Insurance companies making huge profit margins is a common misnomer. The average net profit for the heath insurance sector is in the 5-8% range. That 5-8% can equal a lot of money but as a percentage insurance companies are not the money hoarding boogiemen many like to portray them. Insurance rates are a direct result of healthcare provider costs; doctors, hospitals, pharma, etc. and other factors such as fraud, tort issues, the uninsured, and so on. I have no particular love for insurance companies but they are not out of line with their profits. Its not the governments business to regulate profitability.
Clay, I agree that its not the insurance companies making a huge profit, that the problem is the whole health care system. It's a vicious circle that we have just like any other business. They have to pay more out of their pockets so they charge more to everyone to break even (so they say). Biggest complaint from Doctors and their side is the cost of malpractice insurance...and its not just the doctors insurance hospitals have to carry it, nurses are insured with it also...So all that adds to the price that health insurance companies have to pay out which in turn they pass off to you and me.
If you ask the doctors they aren't making any money its the insurance companies making all the money. They make a mistake and it cost their malpractice insurance company millions, which in turn they pass off the cost by raising the rates for said doctor, who charges more to see him, which cause health insurance to pay more out, so now they charge more to everyone...vicious circle never ends. If we limit the amount on law suits to more reasonable payouts maybe the rates would not go up so quick, which maybe then the cost will equal out. I doubt it but we can wish.