Originally, crowding out was related to an increase in interest rates from the borrowing, but that was broadened to multiple channels that might leave total output little changed or smaller.
Nevertheless, to keep them from crowding out private companies, they operate as non-profits and return surplus money to policy-holders after paying off claims and operating costs.
The argument mostly centers on crowding out: whether government borrowing leads to higher interest rates that may offset the stimulative impact of spending.