Employee Benefit Advisor, by Brian M. Kalish –
November 30, 2012:
The Patient Protection and Affordable Care Act will impact dental insurance in numerous ways – many unintended, say those in the industry, leading to both positive and negative effects in the short and long term.
“When the Affordable Care Act was written the main focus was on medical, and dental was sprinkled throughout – sometimes purposely and sometimes without thinking about the ramifications on the dental industry,” says Joanne Fontana, a consulting actuary at Milliman in Windsor, Conn. “Dental, more so than medical, has to deal with a lot of changes coming up.”
Those changes will include mandatory pediatric oral care for all medical insurance offered through the exchanges and small group and individual markets – as mandated by the Essential Health Benefits rule of PPACA – which, while “a great thing for children’s oral care, kind of turns the way dental insurance has been offered on its head,” Fontana says. “Historically, most people purchase [dental insurance] through their employers.
“So now, you’ve got this kind of unintentional melding of medical and dental and you’ve got this pediatric oral care component of the Essential Health Benefits,” she adds. “But, historically, you had medical and dental separate. Suddenly, they are being melded in a way they haven’t been before.””
Come 2014, if an employer in the small group market has medical and dental insurance coverage that includes children and there is no change to the dental plan, there is the potential for duplicate coverage for pediatric dental services.
“So the employer and broker have to think through … if this happens, ‘do we keep children or family coverage or alter that where [we] only cover adults?'” says Evelyn Ireland, executive director of The National Association of Dental Plans. “If you don’t alter it and it still covers children, they are covered twice and coordination [then must happen] between the medical and dental carrier in terms of payment of the client claim.”
Research from the National Association of Dental Plans, a Dallas-based nonprofit trade organization for the dental benefits industry, found that if children are covered under a medical policy half of adults in the small group market would consider dropping coverage to avoid duplication in premium costs, which is potentially 10 to 11 million adults ending dental coverage.
That could lead to a potential of “lost income for the broker, for the industry, and a challenge for the oral health of our nation,” Ireland says.
The Pew Center on the States estimates that about 5.3 million additional children will get dental coverage, although most will be added to public programs.
The possibility of lost coverage is feasible, Fontana, an actuary says, but she cautions she has not run the specific numbers yet. “There will be a lot of moving pieces because the Affordable Care Act changes the way dental will be offered,” she says. “But in the employer-sponsored marketplace I don’t expect huge changes. I think that employers will continue to offer medical and dental because they are value-added to their employees.”
Ireland says her studies throughout the years found that the main reason consumers don’t go to the dentist is because they don’t have insurance coverage. It’s the opposite of what the Affordable Care Act intended to do, Ireland says. It is supposed to be lowering costs, but problems can arise if high-risk people, such as diabetics and pregnant women, drop their dental coverage, she says. “You have fewer people covered; you have the potential for some downstream costs. It’s the total wrong direction for the goal of the Affordable Care Act and not an intended result,” she adds.
Policy makers attempting to do the right thing without understanding how the market works make “unintended results a negative overall, rather than a positive,” says Ireland.
For group dental plans, there will be little immediate impact, says Vincent M. Graziano, vice president and health practice manager with Segal in Boston.
The offer of separate medical and dental coverage is going to continue in the exchanges, Ireland adds. The vast majority are allowing an add-on of adult coverage and, whether or not that is from the same carrier as medical or stand alone, it still will be a separate dental policy.
“The majority of the market is going to still operate as it is today,” she explains. “The only thing in question is if the children’s dental coverage in the small group market will be separate or embedded. Even if they are embedded, most likely the adult coverage will remain separate because it’s not mandated and easier to add it on.
“Because voluntary coverage is totally the employee’s choice, I don’t think employers will want to roll [dental insurance] into the policy, which especially mandates everybody buys it,” she adds.
Fontana says that it may change the way some carriers offer medical and dental on the exchanges. For example, she surmises that a carrier like Cigna – that has both medical and dental plans – may come up with a conglomerate packet. “It remains to be seen how the carriers will offer [the plans], and how much the carriers [will] partner up,” she says.
The situation is similar to medical polices today, where men are technically paying for OB-GYN coverage that they will never use, she adds, so it remains to be seen if you purchase medical insurance, if pediatric oral care will be included. “There’s been a lot of discussion of it and there hasn’t been any clarity from anywhere official,” she says.
By requiring adults without children to pay, medical carriers can embed these benefits and “spread their cost to everyone, completely undermining completion with stand-alone dental carriers,” says Chris Pyle, director of state government and public relations at Oak Brook, Ill.-based Delta Dental, in an email.
He adds his company sees “disturbing trends throughout the country in terms of how exchanges are being established.”
There is no clear guidance from the government yet on how these new rules will be applied – and the exchanges will be different in each state, so different rules may apply.
Among the questions yet to be answered, Segal’s Graziano says, are:
* How do you define pediatrics – such as what age?
* Once that is defined, you must declare an annual maximum.
*Will orthodontist procedures be included as part of the Essential Health Benefits?
There is a lot of confusion on the medical side of things, Fontana admits, but says dental is worse. “The regulation, while very all encompassing, left a lot of open questions. Some things were implemented more as guidelines, so you have states coming at different issues in different ways,” she says. “There is a lot of confusion because the regulation itself doesn’t answer all the questions.
While Fontana is glad pediatric oral care is included in PPACA, she has misgivings that “dental got pulled in without understanding.”
The fact that PPACA was focused on medical leads to much of the confusion – as one must dig pretty deeply into the law to understand how dental insurance is even impacted, Ireland adds.
The way dental coverage is offered may change from the way things are done today. “It wasn’t intended, it’s a concept of indirect consequence,” Ireland says. “Part of it is dental wasn’t the focus and it takes some industry knowledge to really understand the impact.”
One of the things Ireland’s National Association of Dental Plans has asked the government about includes those questions Graziano outlines, such as the age defined as “pediatric.” Because every state is doing it differently, she says, “it’s difficult for us to track,” and takes several full-time people and an extra law firm.
Consequently, Ireland wonders, how is the ordinary worker, employer, citizen expected to understand it?
But, Fontana says a lot of people are hard at work overcoming this confusion, which means it is time for brokers to act. “The dental industry is working hard to get in front of the state issues to keep pushing, ‘don’t forget about dental, dental is different,'” she says. “You want to include it thoughtfully or there may be unintended consequences.”
Brigen Winters, principal at Washington-based Groom Law Group, expects a lot of guidance to come out through this month. At press time, the election was just decided in favor of Barack Obama, and many companies and providers had been holding off on guidance, waiting on those results.
“There has been a bunch of guidance that has been held up,” Winters says. “Not just Health and Human Services and Department of Labor, but just generally. I think [Obama’s re-election] will unleash a torrent of guidance, and I don’t know if they have the manpower to address every possible issue. Expect, he says, “a steady stream of guidance from here on out and into 2014.”