Velifer,

You're right: insurance companies have much higher overhead than Medicare. Nobody is disputing that. For a bunch of reasons, it's natural that they would. But they still manage to come out costing less.

PS: I do use the 18% figure in the story. But if you want to do a more involved comparison devoted to overhead costs, the difference will be much small, more like 10%. That's closer to the overhead on "self-paying" large company plans (you can look at Wellpoint's financial statements for a good example of this--I haven't looked at the data in any comprehensive way; there might be exceptions).

MG