I've seen the geography argument brought up for a "Why no national insurance companies?" Apparently, network stuff is so localized that it's very hard to set up a national-level insurance company. Although I suspect state-by-state laws play into it as well.

At any rate, the sheer geographic size, plus the large population, plus the legalistic bizarreness of our federal/state divide, leads to a chaotic system, and we can't easily just legislate that away.