# What to do about massive health insurance profits? **URL:** \ **Category:** Great Debates\ **Created:** [October 4, 2009, 6:53pm UTC](https://boards.straightdope.com/t/what-to-do-about-massive-health-insurance-profits/512572 "2009-10-04T18:53:19Z")\ **Posts on this page:** 6\ **Page:** 4
**Author:** ![DanBlather](https://avatars.discourse-cdn.com/v4/letter/d/f4b2a3/32.png) [@DanBlather](https://boards.straightdope.com/u/DanBlather)\ **Post date:** [October 9, 2009, 3:01pm UTC](https://boards.straightdope.com/t/what-to-do-about-massive-health-insurance-profits/512572/61 "2009-10-09T15:01:04Z")
> [@kidchameleon](#): > > That may be. Can you show us some data on which states are liberal and which are not? I’d like to know how you are quantifying this before delving farther. > > Can you show how Joe Wilson is responsible for the state of South Carolina’s health care and income? In 1980 SC was the third poorest state in the union based on per capita income, now it’s the 43rd. So if anything, Wilson’s time in office has shown an improvement in the state’s situation. Really there are only 6 states with a higher per-capita income? I’ll assume you’ve just inverted the second statistic. But in any case, depending on what statistics you look at SC is [currently](http://www.census.gov/statab/ranks/rank29.html)the 4th poorest state. Maybe the state motto can be “Thank God For Mississippi”. No thanks, I will not do your homework for you and rank states by liberalism. But according to my cite here are the top 5 in per-capita income: Connecticut, New Jersey, Massachusetts, New York, and Maryland. The bottom 5 are: Mississippi, West Virginia, Arkansas, South Carolina, and Kentucky. All 5 at the top went for Obama in 2008, all 5 at the bottom went for McCain. ---
**Author:** ![DanBlather](https://avatars.discourse-cdn.com/v4/letter/d/f4b2a3/32.png) [@DanBlather](https://boards.straightdope.com/u/DanBlather)\ **Post date:** [October 9, 2009, 3:07pm UTC](https://boards.straightdope.com/t/what-to-do-about-massive-health-insurance-profits/512572/62 "2009-10-09T15:07:16Z")
And looking at [this](http://www.trackforum.com/forums/printthread.php?t=115285)site you can see that all 5 of the bottom states received more in Federal spending that they paid in taxes and 4 of the top 5 paid more in Federal taxes than they received back in spending. ---
**Author:** ![kidchameleon](https://avatars.discourse-cdn.com/v4/letter/k/898d66/32.png) [@kidchameleon](https://boards.straightdope.com/u/kidchameleon)\ **Post date:** [October 9, 2009, 3:27pm UTC](https://boards.straightdope.com/t/what-to-do-about-massive-health-insurance-profits/512572/63 "2009-10-09T15:27:04Z")
> [@DanBlather](#): > > No thanks, I will not do your homework for you and rank states by liberalism. Well since you can’t back up your assertion then I see no need to continue this. ---
**Author:** ![spazattak](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@spazattak](https://boards.straightdope.com/u/spazattak)\ **Post date:** [October 9, 2009, 4:32pm UTC](https://boards.straightdope.com/t/what-to-do-about-massive-health-insurance-profits/512572/64 "2009-10-09T16:32:14Z")
> [@yorick73](#): > > Even 3 or 4 companies will compete with each other. If their business models, products and prices are **that** similar then it sounds like collusion and the government should step in. Most companies will try to maximize profits while offering at least one thing cheaper or better than a competitor. If the public agrees that this one thing is better at one company versus another then they will switch companies. Over time you will see divergence in certain areas of these companies. You mean like insurance companies accepting people with pre-existing conditions? Or insurance companies lowering their premiums? Or cell phone companies selling monthly services instead of discounted phones+2yr contracts? Or record companies offering cheap (sub $10) CDs? In reality over the long-term you see companies emulate what’s profitable in each other and they move toward parity. You need to take a step out of theoretical land and move towards the real world. ---
**Author:** ![Isamu](https://avatars.discourse-cdn.com/v4/letter/i/7c8e57/32.png) [@Isamu](https://boards.straightdope.com/u/Isamu)\ **Post date:** [October 17, 2009, 10:11am UTC](https://boards.straightdope.com/t/what-to-do-about-massive-health-insurance-profits/512572/65 "2009-10-17T10:11:04Z")
> [@yorick73](#): > > There is no guarantee that insurance companies will profit at all. If they are hit particularly hard by an increase in claims then their profits go down. They MUST set aside some sum of money for this potential risk. If they don’t have to pay out as much then they profit. The insurance industry can be risky. Risk increases prices. This is just the cost of doing business. This illustrates a profound lack of understanding of how insurance works. If anyone else thinks that insurance works this way please raise your hand, leave the room and get around to educating yourself. It’s difficult to know where to start addressing your assumptions, but let’s start with “if they are hit hard by an increase in claims…” You say, if that happens then their profits go down. I say maybe, but so what? They still make a profit, everyone gets paid. Maybe you mean to refer to a situation where they get hit so hard that they make a loss? In that case, it was extremely poor planning on their part (if you know how insurance works in the real world) and everyone wants them to fail. But even if they make a loss, they can still stay in business, and everyone still gets paid. You were right in one thing when you said this is just the cost of doing business. But can you imagine if payment for healthcare was not run as a business? ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [October 17, 2009, 2:21pm UTC](https://boards.straightdope.com/t/what-to-do-about-massive-health-insurance-profits/512572/66 "2009-10-17T14:21:16Z")
> [@yorick73](#): > > What is your point. This sounds like the point I was making. Untethering insurance from employers would be a good start toward reform. It has a deleterious effect in every way. It was a horrible business model from the start. Companies fold the cost into their products making them less competitive. The employees are estranged from the cost and have little reason not to abuse it. Insurance companies are only involved in profit. They don’t want to provide good coverage if it inhibits more profit. By every measure it should be blown up and redone.It bis an adversarial system . The players are not working together to provide a good cheap system. There is no incentive for insurance companies to cover more people or to make it better. They just deny coverage to make more money. It is a mess. [Previous page](https://boards.straightdope.com/t/what-to-do-about-massive-health-insurance-profits/512572.md?page=3)