Biden: ‘I Want Insurance Companies to Make Money’
September 23, 2009In a speech to the National Association of Insurance Commissioners on Tuesday, Vice President Joe Biden defended what he referred to as "our" health plan, saying it would not eliminate private insurance – or insurance companies' profits.
“Look, we need some good ground rules" for insurance companies, Biden said at the Gaylord National Resort at National Harbor, Md. “I want to get this clear. I want insurance companies to make money."
“I want insurance companies to be able to provide a return on their investment and their stockholders to benefit,” Biden said. “I want them [to] continue to do their job and make a profit.
“But I also want them held accountable,” Biden said.
Biden defended what he referred to as “our” health plan, saying it would not eliminate private insurance – and their profits.
“Others say that we’re killing the bottom line, destroying profits,” Biden said. “To them I say first, insurance companies may not be able to drop some of the most costly patients anymore, but when every American – every American has health insurance, they will have up to tens of millions of new customers, probably in the order of 30 to 40 million new customers, a significant portion of whom are healthy and young and inexpensive to cover their cost.
“So the profits might not be as high per person they cover, but there will be a much larger pool of paying customers,” Biden said.
Biden’s remarks were in contrast to the harsher views taken by other Democrats in recent months about health insurance companies, including President Barack Obama.
At his Sept. 9 address to Congress, Obama said the lack of competition between health insurance companies in some states makes money for the companies and hurts consumers.
“Unfortunately, in 34 states, 75 percent of the insurance market is controlled by five or fewer companies,” Obama said. “In Alabama, almost 90 percent is controlled by just one company.
“And without competition, the price of insurance goes up and quality goes down,” Obama said. “And it makes it easier for insurance companies to treat their customers badly – by cherry-picking the healthiest individuals and trying to drop the sickest, by overcharging small businesses who have no leverage, and by jacking up rates.
“Insurance executives don’t do this because they're bad people; they do it because it's profitable,” Obama said.
At a July 22 press conference Obama referenced insurance companies making “record profits.”
“Now, you know, there had been reports just over the last couple of days of insurance companies making record profits,” Obama said. “Right now, at the time when everybody's getting hammered, they're making record profits and premiums are going up.”
Posted on their presidential campaign Web site, barackobama.com, the Obama Biden health care plan called for reigning in the profits made by health insurance companies.
“It is not right that Americans families are paying skyrocketing premiums while drug and insurance industries are enjoying record profits,” the health care plan outlined on the site states.
“These companies benefit most from the status quo and in many cases are the greatest obstacles to reform. The Obama-Biden plan will tackle needless waste and spiraling costs by increasing competition in the insurance and drug markets,” it added.
House Speaker Nancy Pelosi (D-Calif.) has also been an outspoken critic of health insurers. In an interview with Judy Woodruff on PBS’ “Newshour” on July 30, Pelosi spoke of insurance companies making “immoral profits.”
“I think there’s a lot of interest in taxing the insurance companies, because people really do see across America, they know that they have caused the problem that we have, with their antitrust exemption that they have and the immoral profits,” Pelosi said. “They're making billions of dollars in profits while they're cutting off people for benefits that they are entitled to under their insurance policy.”
Biden also said spending money was necessary to “get our fiscal house in order.”
“I got criticized for saying we have to do something – like businesses, you got to spend money to make money,” Biden said. “If we don't change the system, there is no reasonable prospect we can get our fiscal house in order.”
The National Association of Insurance Commissioners is a voluntary organization of the chief insurance regulatory officials in all 50 states.