The debate over whether the government should offer a public insurance plan is all about competition. How competitive is the private insurance market right now? It depends on where you live.

As a general rule, the larger, more densely populated states have the most choice — and even the biggest insurer controls only a minority share of the market. According to statistics from the American Medical Association, the leading insurance provider in California covers 24 percent of the population, while in New York the figure is 26 percent and in Florida, 30 percent.

But there are nine states where a single insurer covers 70 percent or more of the people. In Hawaii, one insurer covers 78 percent. In Alabama, it’s 83 percent. And in at least 17 other states one insurer covers at least half the population.

Some members of the Senate Finance Committee, which is taking a lead on health care legislation, come from states where the insurance market is highly concentrated. The Democratic chairman, Senator Max Baucus, is from Montana, where 75 percent of people are covered by one major insurer, Blue Cross Blue Shield of Montana. For Senator Charles E. Grassley, Republican of Iowa, the figure is 71 percent, by Wellmark. For Senator Olympia Snowe, Republican of Maine, it’s 78 percent, by WellPoint.

“For many Americans, the idea that they have a choice of health plans is about as mythical as unicorns,” said Jacob Hacker, professor of political science at Yale University.

But Robert Zirkelbach, a spokesman for the industry trade group, America’s Health Insurance Plans, argues that competition abounds. “In the top 40 metropolitan areas, there are eight or more health plans in every one of them,” he said.

“Both the Federal Trade Commission and the Department of Justice have reviewed this and found that health insurance plans operate in a highly competitive market,” Mr. Zirkelbach said. “Physicians’ offices contract on average with a dozen health plans.”

The choices may not appear quite so abundant to the average consumer.

If you receive coverage through your employer, you may have a selection of two or three plans offered by your company. If you work for a small employer, your choice is likely to be limited to a single plan, if that. And if you’re an individual with a pre-existing condition, the options may be closer to zero.

What’s less evident to most people is that employers, too — particularly smaller employers — face limitations in their choices. “A large employer can self-insure,” said Brad Herring, a health economist at Johns Hopkins Bloomberg School of Public Health. In other words, the employer collects the premiums and pays them out, when necessary, to cover medical claims — generally using a commercial insurer to administer the program and supply a network of doctors and hospitals, but not to financially underwrite the coverage.

“Roughly half of people with private insurance get it from a self-insured company,” Mr. Herring said.

But small businesses, which typically do not have the resources to self-insure, tend to purchase coverage through an insurer. And that often limits their options.

For one thing, insurers are regulated by states, which means only insurers that have been approved by the state’s insurance commission can sell there.

“You can’t shop across state lines,” said Jim Wordsworth, owner of a prime steakhouse, J.R’s Stockyards Inn in Tysons Corner, Va. “I can only buy insurance from companies that have the Virginia State Corporation Commission’s approval.” (Larger employers with staffers in multiple states can purchase coverage that’s exempt from state regulation.)

As chairman of the small business council of the U.S. Chamber of Commerce and a board member of the National Restaurant Association, Mr. Wordsworth has raised the issue on Capitol Hill, but has seen no move toward changing the law to open the insurance business to interstate operations.

Mr. Wordsworth is also limited in practice, if not in theory, by the expense of trying to buy a plan as a standalone business.

“A union can buy health insurance at a huge bulk discount,” he said. “A large corporation can buy at a discounted rate. A restaurant can’t. If the National Restaurant Association had access to [group rates], that would be different.”

America’s Health Insurance Plans, the industry group — which is generally known as AHIP — says on its Web site that there are nearly 1,300 insurance providers in the United States, covering more than 200 million Americans. But this number includes many plans with the same parent company, not to mention the parent companies themselves.

“When you get down to it, in many markets, it’s more like two,” said Wendell Potter, a longtime director of communications for the insurer CIGNA, who now serves as a senior fellow in health care at the Center for Media and Democracy and has become an outspoken critic of the industry.

As critics see it, part of the problem is consolidation in the insurance industry. According to the American Medical Association, there have been 400 corporate mergers among insurance providers in the last dozen years. WellPoint alone covers 34.2 million people, according to the company’s second-quarter earnings report. UnitedHealth Group covers 29.5 million, according to its second-quarter statement.

“The largest seven insurers cover more than 100 million people, a third of the market,” said Mr. Potter, who bases his figures on federal securities filings.

In a capitalist economy, the drive to consolidate should come as no surprise. “Insurance companies need to grow their earnings per share to satisfy Wall Street investors,” said Avram Goldstein, research director for Health Care for America Now, a coalition of groups favoring a health care overhaul that includes a government-run public insurance plan to compete with private insurers

The practical question is whether this consolidation is driving up the price of premiums. In a report issued at the end of May, Mr. Goldstein’s group concluded that it is.

“Premiums have risen four times faster than wages in the last nine years,” said Mr. Goldstein. “We feel that shrinking competition among insurers is a major cause of this kind of dramatic increase.”

But Mr. Zirkelbach of AHIP emphatically disagrees.

“Hospital consolidation has driven up prices,” he said. “Price Waterhouse Coopers studied this and found that in the last 20 years, benefit costs have risen 8.7 percent every year. During the same period, premiums have gone up the same amount, so there’s a correlation in the increase of premiums and the cost of the services that are provided.”

Would non-profit coops provide meaningful competition?

Mr. Potter, the former CIGNA officer, is skeptical.

“Philadelphia, my hometown, is dominated by Independence Blue Cross and Aetna,” he said. As it happens, that’s where CIGNA’s has its headquarters. “But CIGNA has a small presence there,” he said. “The market is largely locked up by the dominant companies.”

And if CIGNA can’t gain a more meaningful base in its own hometown, “a small, non-profit co-op doesn’t stand a chance,” Mr. Potter said. “It’s like a grocery store competing against Wal-Mart.”

Would a government-run public insurance plan help? Proponents say it would, by providing the competition to contain costs.

But Mr. Zirkelbach of AHIP said, “A new government-run plan would significantly disrupt the coverage that people currently rely on.”

“The important question to ask is, do individuals, families and small business have access to a variety of plans to choose from?”

At the moment, there is little consensus on the answer.