Big-foot political journalists in Washington rarely get past reporting the words of players in major controversies like health care. As a result, citizens are ill-served and politicians get away with rhetoric, lies and damned lies.

The Associated Press, as it often does, broke out of that trap with a fact-check story on profits of the insurance industry. Insurance has been beaten up pretty badly recently, especially by the Obama Administration and Congress, which use it as a foil to prove the need for health reform.

House Speaker Nancy Pelosi calls insurance industry profits “obscene,” the AP reports, and a MoveOn ad says, “Health insurance companies are willing to let the bodies pile up as long as their profits are safe.”

The AP found:

Health insurance profit margins typically run about 6 percent, give or take a point or two. That’s anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones.

Profits barely exceeded 2 percent of revenues in the latest annual measure. This partly explains why the credit ratings of some of the largest insurers were downgraded to negative from stable heading into this year, as investors were warned of a stagnant if not shrinking market for private plans.

Insurers are an expedient target for leaders who want a government-run plan in the marketplace. Such a public option would force private insurers to trim profits and restrain premiums to compete, the argument goes. This would “keep insurance companies honest,” says President Barack Obama.

Such facts would seem to be a vital part of any debate on health care. But news outlets don’t seem especially interested. The N&O, for example, buried the story on Monday. Posted by Leroy Towns

This entry was posted on Monday, October 26th, 2009 at 9:54 am and is filed under Media, Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.