Reply #5: As a example see United Healthcare Groups SEC filings

[FarCenter]

There last quarter 10K is at http://www.unitedhealthgroup.com/invest/2009/UHG_Q2_2009_10-Q_RRD.pdf

The last quarter revenues were $21,655 million, of which $19,746 were premiums and $153 were investment income. So investment income is very small portion of revenues.

Their operating costs were $20,215, of which $16,507 were medical costs.

Their gross earnings were $1,440, from which they deducted $139 of interest costs and $442 in taxes, leaving net earnings of $859.

Since their interest costs largely offset their investment income, at least UHG does not seem to make any significant money from investments. Payments of claims, along with operating costs, depreciation, etc, account for most of their income from premiums.

On their balance sheet, they only list $13,163 in long term assets. This is the equivalent of a little over 2 months of premium income.

So it is mostly a pay current claims out of current premiums business.