Occam's razor is a better fit here. In a world where they have to return any cost savings to the insured, what is the incentive to reduce costs?

In theory, competitive rate setting for premiums. Hasn't worked out that way in many places though.

This is the fundamental flaw in the ACA. It did nothing to increase competition. In fact, increased regulation pushed some competitors out of the market. I can't tell whether this was a fool's errand or an intentional destruction of the market, pushing us towards socialization.