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Pelosi Lying About Insurance Company Profits

Nancy Pelosi and the rest of the Democrats are going around the country demonizing Insurance Companies claiming they are making huge profits off of their customers. That is a blatant lie. Or Pelosi has no idea how insurance really works.

Insurance Companies have a group of math and probability whiz kids that are able to predict with scary accuracy how much money they will pay out, given a specific group of people, or risk. There are always statistical anomalies, but the huge number of people in the group even these out (called the Law of large numbers). The variables are huge and statistics make up a major part in telling them what to charge. Age, sex, smoker, past history, etc. are all figured into the formula. And rates are set using this formula and a built in profit. Remember, they are in the business to make money, right?

The huge profits Pelosi and others are talking about are not the built in profits. While they are normally scary close, that is not always true. When you make your monthly premium payments, they are placed into Cash Reserves and used to make investments. There are laws in every state concerning minimum reserves, and there is a company that keeps a constant watch on finances and all aspects of the companies and gives ratings on an ongoing basis called A.M. Best. People are always watching.

Depending on the return on investments made using premium money, the Insurance Companies can have a good or a bad year. A bad year means increased premiums and a loss of customers, and more financial losses, or borrowing money to make up the losses.

Often, an Insurance Company has a great year, but ended up with an underwriting loss for the year. Which means that the premiums the company collected from it’s customers was not enough to cover the payouts and they should have charged more. But great investments salvaged the financial year.

So, in the long run, the greedy insurance company charged you less than you should have paid, and remained a profitable company. They should be praised, nor demonized.

It never fails to amaze me when a customer complains about a $200 per year jump in Auto Insurance premium, when they only has 2 accidents. When I look at the fact that their insurance company paid out $50,000 for those accidents, and their insurance went from $1,000 a year to $1,200 a year and they are complaining, now I just think of Nancy Pelosi.

Sure premiums are high, but they are not where the insurers make their money.

And, just wondering, does anyone think that the government option will attempt to invest the premiums paid and make more money, or will that money just be allocated to other projects and the bills for last month’s services be paid with this week’s tax premiums?

And what happens to the markets and the economy when all that money that was previously invested and circulated into the economy when it goes away?

This is a bad plan that has not been very well thought through. Like everything this administration has done.

About Tom White

Tom is a US Navy Veteran, owns an Insurance Agency and is currently an IT Manager for a Virginia Distributor. He has been published in American Thinker, currently writes for the Richmond Examiner as well as Virginia Right! Blog. Tom lives in Hanover County, Va and is involved in politics at every level and is a Recovering Republican who has finally had enough of the War on Conservatives in progress with the Leadership of the GOP on a National Level.

13 Responses to “Pelosi Lying About Insurance Company Profits”

  1. Dennis Prager spoke today about the recent Rep. Claire McCaskill and Pres. Barack Obama tirades against insurance companies making "obscene record profits." Of course, nothing threatens politicians more than an American citizen earning an income that rivals their own. I personally think it's obscene that members of Congress make over $150,000/yr, and then have the gall to vote on laws they've never read, while American servicemembers earn less than $40,000/yr, and risk losing their lives if they fail to notice an IED on the side of the road. That's obscene.

  2. Dennis Prager spoke today about the recent Rep. Claire McCaskill and Pres. Barack Obama tirades against insurance companies making "obscene record profits." Of course, nothing threatens politicians more than an American citizen earning an income that rivals their own. I personally think it's obscene that members of Congress make over $150,000/yr, and then have the gall to vote on laws they've never read, while American servicemembers earn less than $40,000/yr, and risk losing their lives if they fail to notice an IED on the side of the road. That's obscene.

  3. Terry Hunt says:

    So Im taking it from the article that if the Insurance co gets a bad return on their investment then to make up for that they raise your rates. That makes sense. Or they deny claims sometimes stating experimental procedure. Or they deny a claim stating the woman had had a yeast infection 2 years ago and didnt claim it so she was denied treatment for cancer and died from it. Insurance companies do anything and everything they can think of to deny claims, and if people die, Oh well at least the insurance co didnt have to pay.. Why does the ceo of United health do to deserve 3 million a year. Sound like their investments went well, and yet they still deny claims. Virginas very wrong

  4. Terry Hunt says:

    So Im taking it from the article that if the Insurance co gets a bad return on their investment then to make up for that they raise your rates. That makes sense. Or they deny claims sometimes stating experimental procedure. Or they deny a claim stating the woman had had a yeast infection 2 years ago and didnt claim it so she was denied treatment for cancer and died from it. Insurance companies do anything and everything they can think of to deny claims, and if people die, Oh well at least the insurance co didnt have to pay.. Why does the ceo of United health do to deserve 3 million a year. Sound like their investments went well, and yet they still deny claims. Virginas very wrong

  5. Tom White says:

    As a general rule, they know what they are doing. That's why the employees get big bonuses. You make them money, they share it.

    Think about it a minute. Let's say you get married, you're in your early 20's. You are complaining that the insurance company is ripping you off big time because you pay $150 a month out of your pay. That's $1,800 a year and $18,000 in 10 years. Double that for you spouse. $36,000 in 10 years. Let's say you have 3 kids in those 10 years. The Insurance company just spent every dime you have given them.

    Add in a few stitches and a hernia operation, or other surgery and that money you paid seems a real bargain.

    The insurance companies are not the villain.

    So, how will Obamacare work? I promise you there will not be one dime invested and premiums will have to pay for it all. That's how the Post Office rolls, Social Security, Medicare, Medicade. That's why they are broke. They don't run it like a business. The high cost is from Law Suits. Defensive Medicine and the US subsidizing the cost for drugs all over the world.

    Why are Canadian drugs cheaper? They negotiate. And the higher cost is paid by us. Obama wants to let us buy cheaper Canadian drugs. Know why? Because the loss will be passed on to the US Health Insurance companies. These drugs are made in the US, sold to Canada and sold back cheaper than we can buy them here. Obama is fine doing it that way. The Government option won't be paying the higher cost. Private insurance will. That's his plan. To put them out of business and nationalize health care by stealth.

  6. Tom White says:

    As a general rule, they know what they are doing. That's why the employees get big bonuses. You make them money, they share it.

    Think about it a minute. Let's say you get married, you're in your early 20's. You are complaining that the insurance company is ripping you off big time because you pay $150 a month out of your pay. That's $1,800 a year and $18,000 in 10 years. Double that for you spouse. $36,000 in 10 years. Let's say you have 3 kids in those 10 years. The Insurance company just spent every dime you have given them.

    Add in a few stitches and a hernia operation, or other surgery and that money you paid seems a real bargain.

    The insurance companies are not the villain.

    So, how will Obamacare work? I promise you there will not be one dime invested and premiums will have to pay for it all. That's how the Post Office rolls, Social Security, Medicare, Medicade. That's why they are broke. They don't run it like a business. The high cost is from Law Suits. Defensive Medicine and the US subsidizing the cost for drugs all over the world.

    Why are Canadian drugs cheaper? They negotiate. And the higher cost is paid by us. Obama wants to let us buy cheaper Canadian drugs. Know why? Because the loss will be passed on to the US Health Insurance companies. These drugs are made in the US, sold to Canada and sold back cheaper than we can buy them here. Obama is fine doing it that way. The Government option won't be paying the higher cost. Private insurance will. That's his plan. To put them out of business and nationalize health care by stealth.

  7. dr. o says:

    Then how does the CEO of Oxford Insurance manage to pay himself a salary of $29 million and stock options worth $82 million while reducing the number of insured? His take-home would provide health care to 200,000 children. Virgina Right is either the dumbest the lest caring person in the US…or is paid obscene amounts of money by the insurance industry to post this misleading blog

  8. dr. o says:

    Then how does the CEO of Oxford Insurance manage to pay himself a salary of $29 million and stock options worth $82 million while reducing the number of insured? His take-home would provide health care to 200,000 children. Virgina Right is either the dumbest the lest caring person in the US…or is paid obscene amounts of money by the insurance industry to post this misleading blog

  9. Tom White says:

    Since when is it his job to pay for 200,000 children? I assume he pays for his own. And he pays taxes. Insurance companies INVEST the premiums and MAKE MONEY. Something the Government will never do. Mr. Obama could have insured thousands of children on his income from last year. And Joe Biden? Look at what they give to charity.

    Just because he makes the big bucks does not make him responsible for others. Look at what he gave to charity. And paid in taxes. He paid for a lot of medicaid and and other social programs with his massive taxes. I say, more power to him and God bless him for making his company want to pay him that much. He is a valuable CEO. HE will also be tossed out if he fails to produce. I am sure his pay is tied to performance. Something Union workers are glad is not the case for them.

    And if you read the ABOUT link, you will see I am not paid by anyone for anything I or any other bloggers here write. I just know what I am talking about.

  10. Will F. says:

    Enough’s enough! It’s time to finally stand up for insurance company profits and insurance company executives!!!

    WATCH THIS VIDEO:

    Protect Insurance Companies PSA from Will Ferrell

  11. auto insurance in houston tx says:

    http://www.aitinsurance.com

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  1. […] are held hostage … by health insurance companies”, this was simply another lie. A post on this Blog a few days ago shows that insurance company profits come from investments, not overcharging […]


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Tom White Says:

Nothing is more conservative than a republican wanting to get their majority back. And nothing is more liberal than a republican WITH a majority.

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