In article , Peter
wrote:


the recently enacted health care reform legislation that mandates that the
health insurance companies spend at least 85% of their income on payments to
beneficiaries for health care delivery? The facts can be stubborn! Many
companies were spending more than 15% of the premiums they receive on
profits,
marketing, perks for the top corporate execs, etc. Not exactly consistent
with
your claim that their profit is "miniscule compared to the total premiums
collected."

Most are at 85%, some 80%. From this they have to pay salaries for
administrations, etc. Overall, the profit margin for health insurance
companies was a modest 3.4 percent over the past year, according to data
provided by Morningstar. That ranks 87th out of 215 industries and
slightly above the median of 2.2 percent.
BTW: Executive salaries are effectively capped at $1 million or so
due to tax laws. What aren't capped is incentives and stock options (the
latter usually the biggest and is not paid by the ratepayer, but rather
the stockholders through dilution of shares). This was done by Congress
to better align the needs of the executives with the needs of the
stockholders. Of course when you have a base salary of $1 mill and stock
options of $100 mill you are being paid not to manage the company but to
manage the stock price. Oop s.

--
I want to find a voracious, small-minded predator
and name it after the IRS.
Robert Bakker, paleontologist