Profit is overhead?

There has been a bit of comment and reaction to the President's health care speech to the joint session of Congress. This morning's WSJ editorialized re some of the gaffes.

But I have seen no reaction to this:

Despite all this, the insurance companies and their allies don't like this idea. They argue that these private companies can't fairly compete with the government. And they'd be right if taxpayers were subsidizing this public insurance option. But they won't be. I have insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects. But by avoiding some of the overhead that gets eaten up at private companies by profits, excessive administrative costs and executive salaries, it could provide a good deal for consumers. It would also keep pressure on private insurers to keep their policies affordable and treat their customers better, the same way public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities.

Is profit a part of overhead? Why was there no outburst by anyone who has had an inkling of econ 101 -- or just business common sense? Why does stuff like this pass the lips of one who is constantly praised for his IQ and Ivy League education?