The argument being made by somany that MLR is the only force driving decisions may beflawed.

Last month, we started an exploration of the argument thatinsurance carriers are incentivized to increase rates (based on theACA's MLR provision). On paper, it certainly does look like anadvantageous strategy.

But the one factor I have never heard taken into considerationis one of the fundamental drivers of a free market economy: market share.

Even if there is collusion, what if one of the carriers breaksranks? What if one of the major carriers simply committed toreducing costs by 10 percent? What if this allowed them to take aconservative 10 percent market share from each of the otherfour?

KevinTrokey is founding partner and coach at St. Louis-basedQ4intelligence.

Related: Fixing health care hinges on data,transparency

Let's break down the numbers after a year of this roguestrategy:

• Total health insurance spend is now$1,060,000,000,000 ($180,000,000,000 for the Rogue carrier thatreduced costs by 10 percent, plus a combined $880,000,000,000 fromthe other four carriers that continued to allow costs to go up by10 percent—both calculations based on a starting point of$200,000,000,000 each).

• For each point of market share, the total healthinsurance premium spend (assuming an equal market share startingpoint) with Rogue drops to $9,000,000,000. For each of the otherfour carriers, each point of market share goes up to$11,000,000,000.

Factor in what Rogue's commitment to lowering cost doesto market share:

• Because of their lower cost base, let's assume Roguecarrier now has 28 percent market share, having taken two pointsfrom each of the other four carriers, leaving them with 18 percenteach.

• Because Rogue now has 28 percent market share, thetotal market health insurance spend is affected. The spend formarket share with Rogue now equals $252,000,000,000 (28 points x$9,000,000,000 per point). The cumulative market share for theother four is now $792,000,000,000 (72 points x $11,000,000,000 perpoint).

Finally, let's look at how this change affects theirprofitability:

• Profitability for Rogue is now $12,601,008,000. Thisis compared to the previous profit of $10,000,800,000. •Profit for each of the other four is now $9,900,792,000 (theircumulative premiums of $792,000,000,000 being driven by the sameMLR profitability calculation, divided by 4).

That is a serious deviation of profit!

Every one of these numbers is open for debate and attack's thatthis is an overly simplistic analysis. However, I'm simply tryingto say the argument being made by so many that MLR is the onlyforce driving decisions may be flawed.

I just don't see them going away

The major carriers have a collective market capitalization thatis staggering. If you think they are going to survive driven purelyon greed and misaligned incentives, you're wrong. If you don'tthink there are enough zeros on their balance sheets to ensure theyfigure this out, you're wrong. If you don't think market sharematters, you're wrong.

Read more: 

• 10 states with the least competitive healthinsurance markets
• Limited competition drives up ACA premiums in ruralareas
• Health care market competition tied to lowercosts