What percentage do you think is acceptable for health insurance companies to earn in profits?
OK, I think you might be confusing two things here.
1. How much of your premium dollar, goes to profit/overhead, vs. paying claims
2. How much TOTAL PROFIT the health insurance company is making.
There's a HUGE difference, because health insurance companies, in general, do NOT make their profits off of the premiums they charge. I WISH people would be informed of that.
So, as long as the insurance company is paying out $.99 in claims for every $1 in premium, they are NOT NOT NOT overcharging for their policies!
Their "profits" are made from investing the billions of dollars in reserves, they're required to keep on hand, to pay future claims. So what does it matter how much interest they earn off of that money???? The more interest they earn, the more they can afford to subsidize your premium dollars, the lower your health insurance rates can go! But not too low, because, after all, they still are paying out $.99 for every $1 in CLAIMS!
Bottom line - health insurance companies don't earn enough in profits, for me to buy their stock. If you REALLY think they do, BUY THEIR STOCK. If you don't buy their stock, then YOU don't really believe that they're racking in all those earnings.
Want to know who's stock I hold? You'll have to ask. But Coca Cola has the MOST earnings & profit - and coke costs more by the gallon, than gasoline. And no one EVER complains about it.
I think that the 1% profit on premiums is very acceptable. The rest of their profit comes as interest on the $billions that they must keep in reserves to pay future claims. To put it in perspective the Hospital industry profits are 6%, Yahoo is 5.9%, Coors Brewing is 8.1%, and the communications industry at 20.4%.
5%
Its not as bad as the oil companies, plus they need to save too for a rainy day.
if it were zero it wouldn't be a company, it'd be a not-for-profit!
How about the same as every other industrialized country in the world except for the US? Zero.