Is health insurance a competitive market? So you know how you see all these commercials for car insurance.. Why is that marketing presence just not there for health insurance? Does how much you can pay define what health insurance you get?
Dear Home Economist,
Great question! Part of the reason that you do not see lots of ads for health insurance is that most health insurance is obtained through an employer. The health insurer does not gain from advertising directly to employees, the ultimate consumer, when the “real” buyer is the employer. At this level, it is a competitive market; it’s just not visible to you unless you are in HR or you are an insurance broker.
Even after health reform, most working age adults will get their insurance from an employer. The health insurance exchanges, also called marketplaces, are meant to support a competitive market for people buying health insurance on their own. The insurers offering plans on the exchange do compete with one another for members. Insurers can and do advertise themselves to consumers.
In answer to your second question, yes, how much you pay does directly relate to how much insurance you get. A plan that costs more generally covers more (that is, has you pay less out of your pocket for medical care) than a plan that costs less. This is nearly always the case, but you may find exceptions where the less expensive plan covers more.