The Affordable Care Act is a means for change to the healthcare system, but it has its flaws, said Chris Gorey, vice president of sales at Regence BlueShield. But it’s also a good first step toward improving a broken system, and one he predicts will take several years of activity to truly see a stabilization in the health insurance marketplace.

Gorey spoke before a group of business leaders and healthcare providers Wednesday at the Bellevue Chamber of Commerce where he outlined how state and federal health insurance exchanges will operate and what businesses need to know about the coverage they will soon be required to provide for their employees.

Every American is required to obtain health insurance by Jan. 1 under the ACA, said Gorey, but there is also an expectation many young adults will opt to pay a penalty next year rather than seek coverage. With a first-year penalty of $95 or 1 percent of their household income depending on whichever is greater, this could be a trend that gradually dissipates every year as penalties become higher, he said.

“It starts to equalize the cost of penalties to having insurance, theoretically,” he said, adding more people in the insurance pool should drive down the cost in the long term.

Younger adults will end up paying higher premiums to subsidize older Americans, Gorey said, though there will also be subsidies available for those who can’t afford to insure themselves and their families. Prohibiting insurance companies from rejecting an applicant’s request for insurance based on a pre-existing condition will mean more claims and likely higher premiums in the first several years of implementing the ACA. But healthcare providers will also start to be reimbursed for value-based care, said Gorey.

“If they keep costs down, they can actually earn more money by doing a good job,” he said, adding habilitative services will also be required, such as helping a person born blind to see. “The thing that we don’t know is just how expensive is that.” A 2.5 percent tax is being added to health care prices in anticipation of these costs.

The ACA also prohibits people from assuming more out-of-pocket expenses through lower-premium plans. The maximum deductible an individual could acquire is for $6,350, Gorey said, which will mean higher premiums.

Small business owners with fewer than 50 employees can offer a group plan or direct their employees to seek individual coverage through the state or federal exchange, but larger businesses with 50 or more employees will have to provide their employees with affordable coverage or pay a penalty that would go toward subsidizing the cost for individuals to acquire insurance. An employer could not deduct more than 9.5 percent of an employee’s income to pay for their insurance, Gorey said. Some employers also may be able to continue offering the same insurance packages to their employees as long as they are still in compliance with the ACA.

Since employers of 50 or more employees only are required to provide insurance for those working full-time, which is defined as 30 hours per week or more, Gorey said he believes many companies may seek to lower their costs by scaling back hours or filling one full-time position with two part-time positions.

“It’s not something that’s theoretical,” exclaimed one audience member. “It’s already happening.”

While insurance companies are predicting serious losses in the coming years, Gorey said he’s hopeful the insurance market will see stability by 2017.