I would be quite interested to see your data. A quick google search indicated to me that the vast majority of insurers pay out less than the ACA-required 80-85

I would be quite interested to see your data. A quick google search indicated to me that the vast majority of insurers pay out less than the ACA-required 80-85% of premiums and therefore were required to pay a rebate to their customers under the new law. Certainly 80% < "over 100%". They call this the Medical Loss Ratio (MLR), which I find to be an amusing term. It is interesting to note that it is considered bad for the MLR to be too high, because this indicates poor control over expenses. It would also be interesting to see your data on government payout ratios as well. Government employment is at the same time notoriously stingy but also forgiving. It's well known that civil servants are difficult to fire even when they aren't performing their duties. I could believe that the remora effect of underperforming laggards could push overhead costs up somewhat but the statistics you suggest seem quite excessive. I can't vouch for this website's data or slant [1], which suggests that Medicare's administrative costs are around 3% of premiums, while private insurance administrative costs approach 17%. Medicare is reported to be a good example of a system with excessive MLR which apparently leads to high rates of fraud. Sort of like not giving the IRS enough money to audit people, reducing the impetus to pay legally-owed taxes. In these cases it is better to marginally increase overhead. [1] http://www.ahipcoverage.com/2014/01/03/myth-vs-fact-administrative-costs-in-medicare-private-health-plans/ http://www.ahipcoverage.com/2014/01/03/myth-vs-fact-administ...