Advertising and the Efficiency of Competition
That's a fascinating contrast, John. I was talking about the ObamaCare exchanges during an interview a while back, and the host interrupted to ask exactly what the exchanges are. They're much discussed, and their costs are blasting into orbit along with the rest of this boondoggle, but people don't entirely get the point of their existence. I made the comparison to advertising, and only wish I could have cited the hard numbers from the contrast with Esurance you wrote about, because it perfectly illustrates one of ObamaCare's core flaws. (And to be fair, it was a serious problem with the previous health insurance regime, which is one reason the Left was able to harness enough public discontent to drop ObamaCare on us.)
Competition is an order of magnitude more efficient than government control. On the one hand, you've got lean and hungry organizations aggressively seeking out the least expensive way to market their products to a wide audience; on the other, you have government agencies finding ways to "raise awareness," with a general attitude that money is really no object. Advertising itself is a highly competitive industry, selling its services to other industries. Free-market corporations looking to attract customers will always run rings around bloated bureaucracies looking to calculate eligibility and stuff citizens into yet another flabby program with hardened arteries.
There are three big problems which prevent the full power of free-market competition from illuminating health insurance: First, even before ObamaCare, it was so heavily regulated that no one could describe it as a "free" market with a straight face, and the public is generally inclined to feel nervous about the idea of de-regulating anything pertaining to health care. Also, the linkage between health insurance and employment further distances consumers from the marketplace.
Second, health care is an incredibly complex product, whose ultimate consumers find it both vitally necessary and highly intimidating. They don't see themselves as engaged or knowledgeable enough to function as sharp, uncompromising buyers, the way they might pride themselves on seeking out high quality at bargain prices in other industries. They don't want to "shop" for quality health care; they want it delivered.
And third, health care expenses are seen as a penalty dumped upon the unlucky, not something people "buy." The need for health care is an expensive disaster, not a purchasing opportunity. That makes a lot of folks shy away from the kind of advertiser-influenced bargain hunting they tolerate, or even enjoy, in other settings. To put it another way, the idea of a bureaucrat telling them what plans they qualify for sounds preferable to a pack of advertisers trying to sell them discounted insurance plans.