Just had a guy on Twitter claiming that 30% of every premium dollar goes to health-care insurance companies profits. So I figured I’d check out a couple of companies, via Morningstar Advisor Workstation.

Turns out that for 2008 and 2009 (so far), Humana had operating margins of 3.7% and 4.5% respectively — which provided a return on assets of 5.0% and 6.3%, and a return on equity of 15.3% and 18.2%. Not bad, but obscene? Give me a break.

Health Net, another “evil health insurance company” had operating margins of 1% and 1.1% for 2008 and 2009 to date — giving these bastards a whopping return on assets of 2% and 2.4% — and return on equity of 5.2% and 6.4%.

Bear in mind that they did, in actuality, turn a profit — a feat the Federal government has yet to replicate with Amtrak or the US Postal Service.

Perhaps my Twitter friend will point me towards this evil cabal of companies making 30% profits out of their revenues, as he claims. Somehow, I doubt it.

Share on Facebook