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So, you're telling me that they don't compete for business, other than the myriad ads we see?

You see ads in areas where they do business. You won't see adds in states where they don't.

From what I understand, it's a pain in the @ss for an insurer in one state to do business in another state unless it already has a subsidiary set up there.

Most people think "selling insurance across state lines" means that a low-cost insurer in Mississippi will be able to sell plans in New York with very low premiums. That's not the case at all. For one thing, there will be a major cost for the insurer up front to set up contracts with a network of doctors, hospitals, etc. in New York. And you can be damn sure that no doctors or hospitals in New York are going to accept Mississippi reimbursement rates for their procedures and treatments.

This is why most figures I've seen suggest that a fully operational system of insurers selling across all state lines would probably only result in about a 5% reduction in premiums.