DES MOINES — Iowa individuals and businesses need a public health insurance option that would provide a competitive choice in a private market dominated by two corporate providers, a citizen advocacy group said Wednesday.

Charlie Wishman of the Iowa Citizen Action Network, or ICAN, said the combined market share of Wellmark Blue Cross and Blue Shield and UnitedHealth Group Inc. currently is 80 percent statewide and it stands at 74 percent in the Quad-Cities, according to a study issued by the Health Care for America Now campaign.

The two companies’ share in other Iowa locations are 95 percent in Cedar Rapids, 90 percent in Sioux City, 86 percent in Iowa City and Ames, 85 percent in Waterloo-Cedar Falls and 80 percent in Des Moines, he said.

During a teleconference, Wishman said continued consolidation in the private health insurance industry has meant skyrocketing premiums for both patients and employers because an insurer can raise prices or reduce the variety of plans or quality of services offered to customers without fear of market consequences.

“When just a couple of companies hold a near-monopoly, they not only set the prices, but they also make the rules and call the shots,” said ICAN executive director Betty Ahrens, who serves as a consumer advocate to the National Association of Insurance Commissioners. “It’s time for real comprehensive reform that includes regulation and the choice of a public health insurance plan so we are no longer at the mercy of the private health insurers in Iowa.”

Ahrens said it is still unclear how a public health insurance plan might be financed, although participants likely would pay premiums similar to private insurance and some government subsidy would be required for low-income and high-risk coverage. She said several possible funding sources are under study in Congress and President Barack Obama has proposed ending upper-income tax cuts started under the Bush administration as a source for financing a public health insurance option.

In Iowa, Wishman said the commercial health insurance business is dominated by a few companies, preventing new competitors from entering the market and allowing the most powerful hospitals and doctors to raise rates with minimal resistance. Freedom from genuine competition also has allowed insurers to reap sizable profits and raise premiums with impunity.

ReShonda Young, a small business owner from Waterloo, said she recently investigated health-insurance coverage for her company’s employees and found all eight quotes were for plans that fell under the Wellmark Blue Cross and Blue Shield umbrella. She said her Alpha Express business faces payroll cost increases of 12 percent, excluding dental and vision benefits, even before health conditions of employees are factored in.

She said a public health insurance option “would be wonderful” given the current private-sector options.

Danny Homan, president of American Federation of State, County and Municipal Employees Council 61, said health insurance premiums for Iowa working families have increased 73 percent from 2000 to 2007 at the same time that those workers’ median earnings increased 19 percent.

Wellmark officials did not immediately respond to a request for comment.