You're implying that insurance companies will allow prices to fall and lower their profits. That seems like a really unlikely event in the current economy. They fire a lot of doctors and nurses, but they won't lower prices.

This is assuming no competition materializes from the lowered friction

The ACA requires 80-85% of health insurance to go toward medical care (medical loss ratio). The way they work around that is to figure out how to charge more for medical care.