Why does the ACA exchange prohibit purchase of individual healthcare policies across county boundaries? I can understand the argument as to why some (most) states prohibit purchase across state lines (because almost all states have their own State Insurance Commissions and assert jurisdiction in their state), but I don't understand why barriers are erected at county lines such that people cannot purchase a healthcare policy that is being sold (and approved) in a neighboring county.

BTW, was this county granulation initiated by ACA or was this traditional practice?

associated reference: http://www.kff.org/interactive/counties-at-risk-of-having-no-insurer-on-the-marketplace-exchange-in-2018/

1 Answer 1


Because not every insurer wants to compete statewide.

Say I'm an insurer in Ohio. I have a network of doctors in the Cincinnati area, including a reasonable coverage of hospitals. Now, I sell a policy in Ashtabula, at the other end of the state. Do I tell that person to drive four hours every time that person needs to see a physician? Or do I end up adding an entirely new set of doctors in Ashtabula just for one customer? It's much easier just not to write policies in Ashtabula.

Prior to the Patient Protection and Affordable Care Act (PPACA, ACA, or Obamacare), insurers could participate in just one portion of a state. That portion might not necessarily be delineated by county boundaries. For example, the insurer might only write policies where the place of employment (employers usually purchase health insurance in the United States) was in certain zip codes. If the employee commutes into an area for employment, presumably the employee can travel the same distance for health care.

PPACA requires some easy way of determining what insurers are available in each area. Apparently they chose to do this by county. For the most part, insurers are available in adjacent counties. However, at some point, we get to the border of where an insurer wants to participate. Making that border the same as a county border is arbitrary, but it probably simplifies things relative to something like zip code. (Is 44444 close to Cincinnati? Not really, although it is closer than Ashtabula.) Or even worse, address. It's easy enough for an insurer to look at a map and pick out reasonable counties to cover.

Without PPACA, insurers weren't necessarily limited to county boundaries, but this also meant that they didn't have to take every applicant from a county either. Under PPACA, if an insurer wants to offer coverage through the exchange, the insurer has to offer it to every applicant in that county. They are preapproved. Without PPACA (or state legislation), the insurer could pick and choose.

  • I understand your argument relative to networks and it would make sense that when a carrier (like Anthem) is originally setting up in Ohio (as an example) they would employ that thought process. However, Anthem already had networks setup during 2015 , 2016 and 2017 in the counties that they are now saying that they will abandon for 2018.
    – BobE
    Commented Jul 23, 2017 at 22:07
  • I suspect the real reason is that certain counties are less lucrative than others (claims higher than average). Stratifying the market by counties is probably a step up from stratifying by street address or family claim history but it still is trying to concentrate (or segregate) citizens based on claims histories
    – BobE
    Commented Jul 23, 2017 at 22:15
  • Anthem is pulling out of every county in Ohio in which they had participated. They aren't trying to pick and choose. That's not to say that no insurer is acting that way, just not Anthem in that particular case. In general, when I've seen stories about insurers pulling out, it's been statewide.
    – Brythan
    Commented Jul 24, 2017 at 0:36
  • True, that Anthem is "pulling out" of every county, but they are only pulling out of the ACA subsidized marketplace. They still (confirmed today by Ohio Department of Insurance) are marketing for 2018 for off-exchange. They still have Anthem provider networks in the counties where they are "pulling out".
    – BobE
    Commented Jul 25, 2017 at 1:27

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