Reinhardt breaks down income statements

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.

Princeton economist – and Health Journalism 2009 keynote speaker – Uwe Reinhardt’s latest post on The New York Times’ Economix Blog provides a clear primer on how to read an insurance company’s income statement.

Uwe Reinhardt at Health Journalism 2009

In the post, Reinhardt systematically runs through insurance heavyweight WellPoint’s income statement and, not only explains exactly how major insurers earn their money, but also teaches the reader how to deduce all of this from a publicly available income statement.

Reinhardt promises another blog posting this week that will “explore how the add-ons for marketing, administration and profits on top of expected outlays for health care to set the insurance premiums can be astonishingly high for individually sold policies. Up to half the premium can go for these non-medical items.”

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