Why health insurance costs so much

When I was watching Obama's healthcare speech last week, he mentioned something about insurance companies having near-monopolies in various states and that this caused rates in those states to be higher than surrounding states. I did some digging online and found some interesting info. It looks like a lot of money has changed hands to get states to add obscure procedures and unneeded drugs to their lists of requirements. Every state is allowed to have its own set of health regulations, which has resulted in a patchwork of varying coverage. Perhaps there needs to be a federal set of regulations to make it consistent across the nation although that may not be a good thing (like Bush's No Child Left Behind). On the flip side, there are opinions that the health insurance industry should be deregulated. Judging by the premiums and spotty coverage, it doesn't look too regulated now. As in other industries of late, the insurance industry is doing the typical merger and acquisition dance. Their record profits are being used to buy up the competition and improve their bottom line instead of reducing premiums and increasing coverage. When you have a 90% monopoly in a particular area, you can pretty much charge what you want. If the public option plan did nothing other than cause premiums from private insurers to go down, it would be achieving its goal. The cable company in our city has a similar monopoly. When the city discussed getting in the cable business, the cable company lowered its rates. Fast forward 3 years and rates are back up because the city never actually got in the cable business. This shows us that just threatening to have a public option isn't enough.
Here's a couple of links that offer causes and opinions:
http://tinyurl.com/oaktzz
http://tinyurl.com/ms972j