> I've suddenly started seeing this take all over the place and I have no idea where it comes from because it doesn't make sense. That the insurance companies profit margins are restricted means rather little because executive pay isn't capped: if they earn too much money, they can simply pay bonuses to raise their expenses. Or cut shareholders a check. Or. Or. Or. Tangentially, this is why "non-profit" doesn't mean what people think it means.

This is not correct, as I understand it. Under the ACA (Obamacare), health plan providers had to ensure that at least 80% of premiums were paid out for patient services. That leaves 20% for overheard, including profit and compensation.

The "trick" here is that service providers (doctors, hospitals, MRI facilities, labs, etc.) are not limited in this way (except by "usual and customary" terms where applicable), and there are LOTS of layers of providers. So in the end you can get many multiples of actual costs by simply washing the underlying treatment or service through 5 or so layers of providers.