Health insurance companies are “making record profits, right now.”

President Barack Obama has often argued that health insurance companies need more competition, and he’s proposed a public option for health insurance to provide it.

“There have been reports just over the last couple of days of insurance companies making record profits, right now,” Obama said during a prime-time news conference. “At a time when everybody’s getting hammered, they’re making record profits, and premiums are going up. What’s the constraint on that? … Well, part of the way is to make sure that there’s some competition out there.”

We wanted to know if he was correct that insurance companies are making record profits during one of the worst economic recessions on record.

It seems likely that Obama was referring to the latest earnings report from UnitedHealth Group, one of the largest publicly traded health insurance companies. The day before Obama’s news conference, UnitedHealth had announced unexpectedly robust profits that prompted the company to revise its annual earnings guidance upwards.

There are many ways to look at a company’s earnings, but Obama said “profits,” so we looked at net income, which is revenue minus expenses. For the quarter, UnitedHealth earned $859 million. But that’s not a record for quarterly net income. During the same period in 2007, for example, its net income was $1.23 billion.

We reviewed the income statements of the other largest publicly traded health insurance companies — WellPoint, Aetna, Cigna, Humana and Coventry Health Care — and found similar trends. Generally speaking, profits were  higher during 2007 and 2006, before the economy began its slide. So Obama’s modifier “record” does not appear to be correct.

Of these companies, only UnitedHealth has announced its second quarter earnings. Coventry Health Care is set to announce earnings on July 28; Aetna and WellPoint on July 29; Cigna on July 30 and Humana on Aug. 3.

Still, UnitedHealth did make healthy profits, and we asked Steve Shubitz, a health care financial analyst with the investment firm Edward Jones, about it.

“The profits are still significant, there’s no question about that. But the reality is they’re losing a lot of customers in this economy,” Shubitz said.

When companies lay off workers and the workers lose their health insurance, the insurance companies lose customers, and that’s why UnitedHealth has seen declining enrollments, he added.

If UnitedHealth only offered insurance to companies, “they would not have had a very good quarter because of the numbers of customers they’ve lost,” Shubitz said. But UnitedHealth has diversified, and its business with the government health programs Medicare Advantage and Medicaid performed well, as did divisions that handle pharmaceuticals and health information technology.

Shubitz added that the stock prices for health insurance companies are not as high as one might expect, because of impending efforts at health reform.

“There are so many different possibilities of what can happen,” said Shubitz, who also follows WellPoint and Aetna and has “hold” recommendations on all three. “A lot of this uncertainty is already priced into these stocks.”

Getting back to our ruling, we wonder if Obama was simply remembering a story he’d read in the paper that day and puffed it up a bit. One health insurance company did report

unexpected

profits. But it’s not clear yet whether others will. And the profits UnitedHealth reported were not “record profits.” We find his statement False.