At press time in mid-April, dental industry experts were digesting and comparing more than 2,000 pages of legal language contained in the Patient Protection and Affordable Care Act, which became law on March 23, and the Health Care and Education Affordability Reconciliation Act signed into law March 30.
"It's still surface stuff at this point," remarks Vincent M. Graziano, vice president and health practice leader in The Segal Company's Boston office.
Indeed, it will be months, and in some cases years, before the full impact of reform on dental benefits is known. And much could change between now and when the various provisions take effect.
For now, perhaps the best news for benefit providers and advisers is that things could have been much worse.
"The [Senate] bill as passed is much better for dental coverage than the House bill would have been," says Evelyn F. Ireland, executive director of the National Association of Dental Plans. Under that legislation, "after five years, there would have been no option to maintain even a portion of the market as it is today."
Another big plus for dental plan providers, brokers and plan sponsors is that the reconciliation bill exempted dental benefits from the 40% excise tax on "Cadillac" insurance plans.
Beginning in 2018, insurance companies will have to pay a 40% tax on high-end insurance plans worth over $27,500 for families and $10,200 for individuals. Not only will dental and vision plans not be taxed, but they also will not be counted in the total cost of a family's plan.
"The industry breathed a sigh of relief on that, because the reaction from employers [to a tax] would have been 'Great, let's just get rid of dental,'" says Graziano.
That apparently would have been employees' response, too. Last year, the National Association of Dental Plans surveyed adults with dental coverage to gauge what impact a tax on premiums would have on their benefit purchasing decisions.
For survey purposes, researchers estimated that the tax would have been $300 on an annual premium of $1,000 for family coverage and $150 for a $300 premium for individuals (based on the National Bureau of Economic Research's average marginal tax rates and NADP's annual average dental premiums).
The survey showed that of the 131 million Americans with employer-sponsored family dental coverage, 56%, or 73.4 million, would be likely to drop their benefit if premiums were taxed. Even at the lower $150 tax rate, 37%, or 49.1 million, said they were likely to pull the plug on coverage.
The tax exemption for dental insurance "absolutely is good news," Ireland confirms. "The survey results may have reflected the mood of the country at the time and been overstated, but just the potential for losing half of the market would have been devastating to the oral health of the nation and to medical coverage, because the two are connected."
Ireland says that while she won't characterize the new law as a win or lose for any group, "from a coverage perspective, it is an improvement." Starting in 2014, most of the children without dental benefits will be picked up under either private or public plans.
Here's how it will work on the private side. As of Jan. 1, 2014, individuals and small employers (not more than 100 employees) will be able to purchase qualified health plans, or QHPs, through a state-run American Health Benefit Exchange.
All QHPs must provide an "essential health benefits package," which will be defined by the federal government, but must include pediatric oral care. "Pediatric" includes all dependents under age 21.
"We applaud the president and Congress for addressing the oral health needs of children," says Kim E. Volk, president and CEO of the Delta Dental Plans Association. "Children's dental benefits will thankfully be part of the essential benefits package in 2014 under this legislation. This should translate into millions of children gaining access to professional dental care, with an emphasis on prevention."
However, the fact that the legislation essentially ignored oral health care for adults is also seen by some as an opportunity lost.
"Dental plans and dentists probably are disappointed that the bill doesn't go far enough in providing for adult care," says Graziano. "There's been this historical separation of medical and dental that was carried through in the health reform act. There's not much in the way of dental benefits for adults and no coverage of oral health of any kind in Medicare. [And] the prevention and wellness components of the bill primarily focus on medical elements."
Gail M.Garcia, vice president and compliance officer for Ameritas Group, agrees that expanding coverage for children is great, but like other dental plan providers, she's concerned that the mechanisms Congress used to accomplish that goal could dramatically alter the current benefits market.
"We are pleased that there is increased attention on oral health and that more children likely will be covered as the exchanges and essential benefit packages are rolled out over the next years," she says. "However, we see a big change in the dental benefits delivery system when pediatric dental benefits are included in the essential [medical] benefits package beginning in 2014."
Today, 97% of dental benefit coverage is purchased in a separate policy from medical coverage, either through stand-alone policies or from medical carrier subsidiaries, according to NADP. "That could be different," Garcia says. In addition to the possibility of a major shift for the individual and small group markets in 2014, after 2017, states may allow larger groups to also purchase prescribed benefit packages.
Originally, there was no provision for stand-alone dental plans within the exchanges. The Senate bill subsequently was amended to allow stand-alones to operate individually or in conjunction with a medical plan. However, that language did not make it into the reconciliation bill.
Ireland and Garcia say that this is a technical error that will be corrected in future legislation or regulations.
"We want to be sure that the specialized expertise of dental carriers, such as Ameritas, will continue to be available to Americans in the small business marketplace. We think there's good protection for stand-alone plans within the exchanges; the ability to sell them is clear," says Garcia. "But in the private market outside the exchanges, there isn't that protection."
The American Dental Association also wants to preserve the status quo. "Stand-alone dental coverage will be offered on these exchanges. However, there are no assurances that this coverage will be substantial, and we fear that the desire to control premium costs will prevail and the benefit will be as meager as is currently found in medical plans that promise a dental benefit.
There is absolutely no proof that medical plans will be able to offer comprehensive dental service benefits to children that will be meaningful in terms of oral health status," the ADA stated.
From a practical standpoint, it's questionable how many medical plan providers would want to include children's dental benefits in medical coverage. Dental uses separate claims processing, coding and networks, points out Ireland, so "it's not something most medical carriers want to integrate. From this perspective, the current market reflects the most efficient way to provide coverage."
Delta Dental's Volk underscores that point, noting that given a choice, most employers purchase dental insurance from a stand-alone dental carrier, and many individuals likewise prefer dental benefits offered by specialty carriers that focus on dental. "We process more than 81 million dental claims each year, so we have a pretty good idea about what works," she says.
However, it may be that medical carriers in the exchanges will view dental coverage as a way to distinguish their product from others. "To what extent health care plans will use dental as part of the bells and whistles that will make their plan stand out remains to be seen, but we see this as a possibility," says Graziano.
Adults may drop benefits
There's another side to the QHP/EHB coin that worries plan providers. If dental benefits for children under age 21 are included in medical coverage, but coverage is not extended to their parents, will these adults purchase their own dental plan?
"Adults whose children are covered under essential benefits packages may not then purchase dental coverage for themselves," says Garcia. "We've seen strong correlations between oral health and overall health - diabetes, heart disease and possibly low birth weight babies -and it is a concern that adult and children coverage will be separated."
It's no small concern, either. According to Ireland and Garcia, there are 1.6 million small businesses with fewer than 100 employees providing dental benefits to 43 million employees and their dependents. Under the QHP/EHB program, 22.9 million children could be shifted from their parent's dental plan to a medical plan, leaving 24.7 million adults who would then have to buy dental benefits separately.
"Having more children covered is a good thing, but until we see how adults react, we won't know if we're going to see more people covered or just different people covered," says Garcia. "Whether parents retain their own coverage remains to be seen, and it will be something we'll continue to push for."
However enrollment shakes out, dental plan provides will have to create different coverage and find ways for people to buy it, Garcia adds. Also, there will have to be new policies created to cover the gap between where pediatric benefits and dependents' benefits end.
The new federal law and some state laws define a dependent as being under age 26. "So pediatric coverage might end at age 21, but you still have dependent coverage to age 26 or whatever a state allows," she explains.
While there are more questions than answers at this point about the impact of reform on both medical and dental benefits, one thing is clear: Advisers will have their work cut out for them for a long time to come.
"The community will have a lot to do in the near-term advising clients on medical plan changes," concludes Garcia. "There won't be a major impact on dental plans until 2014. By then, we'll have a clearer picture of things because we'll see how brokers are impacted on the medical side."
If medical plans start including dental benefits, brokers will have to work with different carriers on dental, says Graziano. But, he notes, by the time 2014 rolls around, clients may forego changes in their dental plans.
"During the recession, dental didn't take a hit in general because employers were putting their energy into addressing medical and prescription drug cost increases. Dental tends to be a secondary thought for some employers, and it's also a smaller piece of the benefits pie.
The same thing may happen now with health care reform: Employers are going to have to focus on medical and prescription drug benefits, and by the time the dental provisions kick in, they may be too exhausted to worry about it, or the feeling may be 'It ain't broke, so just leave it alone.'"
Ireland says that reform will force benefit plan sponsors to start looking several years down the road, and that's a plus for advisers. "Tax credits are going into effect this year, and that may encourage more coverage. Advisers will have the opportunity to have a dialogue with clients about the direction they should be going and what kind of coverage they'll have to provide by 2014."
Even though the health care reform law doesn't promote oral health care as part of wellness and disease prevention, there's no reason that advisers can't do so.
"We're encouraging plan sponsors to talk with their brokers and carriers about what they can do to increase wellness and prevention," says Graziano. "For example, what elements of evidence-based dentistry can we introduce in our plans? There's certainly a growing opportunity for advisers to have these conversations now. We're in the early stages, but carriers are beginning to focus on this."
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