Throughout the course of his pitch for Universal Healthcare, President Obama has repeatedly impugned the character of the health insurance industry. The President’s onlookers have been regaled with tales of health insurance providers nefariously stripping their customers of coverage in pursuit of their allegedly massive profit margins.

Reality, as is often the case, has something different to say than the President.

Current market data, as of today, shows the healthcare insurance industry coming in at 88th place among industries for profit margins, at 4.4%.

Last week, the industry ranked 86th.

If the Health Plan providers are as sinister as the President claims, then what industries are apparently even worse?

Air Services, Railroads, Biotechnology, Auto Parts Stores, Toys and Games, Cleaning Products, Restaurants, and many more ALL routinely boast significantly higher profit margins on average than the likes of Aetna, AMERIGROUP, Humana, and United Healthgroup.

Yet, while crusading against private industry and lamenting the denial of claims, the President fails to mention one of the worst offenders of all. Namely, because this offender happens to be the one he supports – government. The American Medical Association’s 2008 National Health Insurer Report Card showed that Medicare topped all the major private providers in percentage of claims denied for the year.

Of course, in fairness to the president, things aren’t going so well for Medicare. Far from enjoying 4.4% profit margins like its private counterparts, Medicare is itself bankrupt, and simultaneously helping to bankrupt America. The President’s 2011 budget shows over $1.4 Trillion in expected expenditures for both Medicare and Medicaid.

Interestingly, there is one related industry that ranks very highly. Major drug manufacturers, coming in at 3rd place with 22.2% profit margins. Last week the industry ranked 6th, with 21.6% profit margins. While much of those impressive margins can be attributed to those firms’ intellectual property rights and ability that dominate the markets for the new drugs they create (those margins, in turn, allowing for reinvestment into research that will develop the new drugs of tomorrow), some can also be attributed to the lack of free trade in America when it comes to prescription drugs.

Limited government advocates have long called for free trade, specifically with Canada, for prescription drugs. Competition leads to lower drug prices for consumers; and the lower the cost for consumers – both individuals and the insurance providers who cover them – the lower the costs of Healthcare. The same effect could be felt in Healthcare plans themselves through instituting free trade within our own borders and allowing the purchase of health insurance across state lines.

Lowering costs – isn’t that what the President claims this is all about?