IBDEditorials.com

Health Care: Washington's latest target is America's "fat cat" health insurance companies. A closer look reveals a vital but vulnerable industry, not the greedy, profiteering image pushed by health reformers.

We've seen "Big Oil" dragged to Capitol Hill to be slandered by power-hungry senators and congressmen for finding, extracting and refining the lifeblood commodity of the global economy. We've seen the pharmaceutical industry drawn and quartered for doing what it takes to discover, make and market lifesaving and life-enhancing drugs.

The latest villain in the politicians' demagogic fantasyland is private health insurance. House Speaker Nancy Pelosi has accused private insurers of making "immoral profits." And they're a prime target for taxes to pay for the health care revolution Congress and the White House have planned.

But in fact, as we pointed out recently in these pages, this is an industry that actually lags many others in the U.S. economy. Plenty of other sectors of private industry are doing far better.

And some of the things Washington has planned — in particular a "public option" — would leave private insurers bankrupt.

As the Associated Press recently reported, the health insurance industry's profit margins tend to be in the 6% range, not impressive at all when compared with other areas of insurance. Margins shrank to 2.2% last year, with health insurers ranking 35th on the Fortune 500 list of industries. As a result, the credit ratings of some leading insurers have been downgraded to negative.

Health insurers' earnings grew less than 9% in the last five years, and they now rank below communications firms, railroads, beer companies, detergent makers, fast-food restaurants, kitchen utensil manufacturers, and chocolate makers.

Watch out — one of those might be Uncle Sam's next target.

Recently, representatives of the private insurers dared to commission a PricewaterhouseCoopers study with evidence of the huge cost increases Americans can expect if Congress' transformation of the greatest health care system in the world is passed into law.

The anti-business liberals who run Congress have unsheathed the long knives. As Steve Forbes recently pointed out in IBD, House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., and his colleagues "are openly engaged in a campaign of harassment and intimidation against 52 of America's largest health insurance providers."

Forbes charged that "they seek nothing less than to silence all voices opposed to their government-run health care proposals."

Waxman is nosing into and demanding every detail on executive and employee salaries and expenses for the past five years — information irrelevant to health reform but very useful as a political tool to blackmail the industry into submission under the threat of congressional subpoena. There's a name for this: witch hunt.

When Congress is finished with the U.S. medical system, Americans may in a short time think they live in France or Britain, where waiting lists for vital surgeries and treatments are the norm.

How ironic if they were deluded into believing that the villains are the companies that have, until now, saved them from such mediocrity and incompetence.