Do caps on profit/overhead rates for medical insurers tend to drive health care prices up instead of down?

Capping administrative costs also disincentivizes the the insurance companies from auditing as many claims for fraud and abuse - that costs the money - and the cost of the fraudulent claims increases overall costs. One of the reasons that Medicare gets high marks for low administrative costs is that they do practically not auditing which results in them paying out $billion/yr in bogus claims.

some big mistakes in your analysis you are comparing 3 medical plans that are not comparable. first is Medicare is essentially a single payer plan, so Medicare sets the price that can be charged for a given procedure. Medicare Advantage is an HMO where the insurance company is also the care provider, either directly or indirectly sets its own price. So they were taking the Medicare rate and making a double profit and hiding that fraud by charging the client addition premiums obstensibly for non-Medicare reimbersible procedures. The government's position is that Advantage should be able to provide services with a 15% profit that Medicare can provide with a 5% overhead. seems reasonable to me, after all it is the traditional conservative mantra that private industry can perform services more efficiently than the government can, so allowing 10% worse is a fair matter of put up or shut up. as to the rest of the insurance industry, the ACA profit caps of 20% have already shown to be effective in controlling care cost rate increases. they have been in effect a couple of years now.