Health Care Costs, Not Profits, Driving Premium Increases, Analysts Say

Picking up on President Obama's attack Monday on health insurers, protesters on Tuesday targeted a meeting of health insurance executives in Washington.

And former Democratic presidential candidate Howard Dean whipped up the crowd, asking if people are for the insurance companies or for the American people.

"We deserve a vote!" Dean shouted.

Health insurers are a frequent and easy target, of course, but the question is whether their profits are responsible for higher health care costs or whether they're just a symptom of them.

"I really do think the underlying costs behind premium increases is health care, the actual health care costs," said Sandy Praeger, Kansas' insurance commissioner.

And Praeger says one reason insurance premiums are going up is that Medicare and Medicaid, two government programs, pay less than the cost of medical services and providers try to recover those costs by charging private insurers more.

"They don't cover the actual cost and traditionally hospitals have been able to charge a little bit more to help offset that," Praeger said.

And many analysts say insurance company profits are not as large as the president has repeatedly argued -- that insurers often make profits of only about 3 to 6 percent, far less than railroads, or farm equipment or even chocolate candy makers.

"If you took away all the profits of America's insurance companies, every single penny, it would pay for two days of Americans' health insurance needs," said Sen. Lamar Alexander, R-Tenn. "And the question is what are we going to do about the rising costs on the other days."

So the key, many argue, is not beating up on the insurance companies but cutting health care costs and some Democrats are still skeptical the current bills meet that test.

"If the House and Senate can't work out cost containment, I don't see how I could support a bill that doesn't help our business community and create more jobs," said Rep. John Adler, D-N.Y..

"If you're looking for a reason as to why Americans overwhelmingly oppose this bill, and why Democrats are having such a hard time rounding up votes within their own party for this bill, it's because no one believes this bill will lower the cost of health care," said Senate Minority Leader Mitch McConnell, R-Ky. "It's that simple.

But House Speaker Nancy Pelosi made a different argument Tuesday.

"We have to pass the bill so that you can find out what is in it, away from the fog of controversy," she said.