The recent healthcare debate has mainly focused on individuals who are covered under the Affordable Care Act (ACA) and how a repeal would impact them. Less time has been spent asking about the effect the ACA has had on most people -- those who use employer provided health insurance.

How has the ACA impacted the private market?

Bill King has been in the insurance business for nearly 45 years. He is the Founder and President of William J. King & Associates, one of the top 10 insurance service companies in San Diego. In an interview for IVN, he explained that when insurance companies are forced to comply with government regulation, they “Try and tweak how they work within the system in order to beat out their competitors.”

One way insurance companies are able to do this is by limiting the number of covered doctors, sometimes by as much as 40-50%. By doing so, the insurance company can then offer two plans -- one with a full network of providers, and one with the limited network. In turn, employers save about 15-20% on their coverage rates, by offering employees a limited network plan.

Additionally, since the passage of the ACA, those covered by their employers have been forced to think more like consumers. Deductibles have been added to more plans, such as HMOs, forcing covered individuals to reconsider the need for an MRI, medical test, doctor’s visit, etc. The insurance company forces you to pay more in the form of deductibles, but at a reduced coverage rate.

Pharmacy coverage is another area which has been transformed by the ACA. According to King, the list of drugs approved by insurance companies has been

reduced dramatically, since the government does not require that insurers cover all drugs. By reducing the number of covered drugs, insurance companies are able to better manage their costs. Consequently, consumers are forced to take less expensive drugs, and often use the generic option when available.

King says even the popular aspects of the ACA have downsides. One example, such as allowing children to stay on their parent’s plans until they are 26, has led to costs being passed onto the consumer since children over 19 are now charged the same rate as adults.

However, for some, there may be a silver lining. One improvement has been with regards to psychiatric coverage which is now treated the same way as other illnesses. Additionally, insurers are now required to cover pediatric, vision, and dental for children. The ACA has also been good for birth control and abortion coverage.

Repealing or altering the ACA will be a positive change for many insurance brokers. One of the biggest benefits King expects to see with a replacement would be allowing insurers to cross state lines, which would allow more competition. This, he predicts, would lead to more affordable insurance, and less increases in costs.