Health insurer competition in hospital networks raises questions on what the socially optimal network breadth is. In this paper I use a structural model of insurer competition in service-level network breadth to derive the social planner’s solution, and to simulate the impact of competition between private insurers on hospital network breadth. I find that the social planner, who maximizes consumer surplus subject to insurers’ participation constraints, would choose complete networks. Collusion between private insurers generates an equilibrium that is farther away from the social planner’s solution. A policy that prohibits network discrimination across services can more closely approximate the first-best.