Pediatric Dental Benefits—Less “Essential” Than Previously Thought

Dr. Richard ValachovicIn this month’s letter, ADEA President and CEO Dr. Rick Valachovic clears up some of the confusion surrounding the expansion of pediatric oral health coverage under the ACA.

These past six months should have been a time to celebrate for those who care about children’s oral health. The Affordable Care Act (ACA), which seemed to hold out the promise of universal pediatric dental coverage, had reached a milestone in its implementation. The federal government and some states were finally launching the health exchanges intended to bring affordable health coverage to millions of Americans previously priced out of the insurance market. But just as the problematic roll out of the HealthCare.gov website caught supporters of the law off guard, the interpretation of “essential” as it applies to pediatric oral health benefits has left many in our community scratching their heads.

ADEA was part of a coalition that raised its voice in the halls of Congress and at the White House in support of health care reform. After much negotiation, the law that emerged did not include oral health benefits for everyone, but the ACA did include pediatric oral health services among the 10 “Essential Health Benefits” that private insurers would be required to include in the policies they offered through the new health exchanges. This victory—although partial—was seen as a major step toward universal dental coverage for all Americans.I recently revisited a 2012 policy brief on pediatric dental benefits under the ACA, produced by the nonprofit Children’s Dental Health Project (CDHP) and the Georgetown University Health Policy Institute Center for Children and Families. The brief contains a graphic that clearly lays out how children were expected to access dental benefits under the law.

Children in families with the lowest incomes would continue to receive coverage through Medicaid or the Children’s Health Insurance Program (CHIP). Children in families with employer-sponsored medical insurance who were eligible for CHIP could receive dental-only supplemental coverage in those states that offered it. Families in other states and at higher income levels would be eligible to purchase dental insurance for their children through the new health exchanges that opened last fall. If a family’s income met or fell below 400% of the federal poverty level, the family would receive a subsidy in the form of a tax credit.

On the surface, this still describes the state of pediatric oral health coverage today, but in substantial ways, the rules governing how pediatric oral health benefits are made available under the ACA stretch the common understanding of the word “essential.” These benefits are essential only in so far as the health exchanges must offer at least one plan that contains them. Consumers, meanwhile, are not obligated to purchase plans that contain dental benefits, and families that purchase stand-alone dental plans may pay a hefty price for the privilege.

In 2012, ADEA signed on to a letter sent to the Centers for Medicare & Medicaid Services (CMS), which has been responsible for writing the rules that govern how the ACA is implemented. The letter, drafted by CDHP, expressed concern that proposed rules on the treatment of stand-alone dental plans might undermine the ACA’s intent by creating barriers to coverage, especially in the area of affordability. This is precisely what appears to have occurred:

  • First, lower-income consumers who are eligible for subsidies to help them pay their medical insurance premiums will typically not receive subsidies for their purchase of a dental plan. The specific rules governing the calculation are too complex to detail here. Suffice it to say that the IRS has interpreted the law to limit the agency’s ability to factor in the full cost of stand-alone dental plans in determining the tax credits families receive to help them pay for coverage.
  • Second, stand-alone dental plans have their own separate out-of-pocket maximums (limits on what consumers are expected to pay for care in a given year). While these are supposed to be “reasonable,” the current limits in plans offered through the federal health exchanges ($700/child and $1,400 for families with two or more children) are decidedly pricey for many consumers. Additionally, states can set their own maximums for stand-alone dental plans, and some have proposed setting limits higher.
  • Third, while the ACA states that dental plans must offer access to an “adequate” number of providers, the law does not provide specific guidance about what constitutes adequacy. Given that an estimated 45 million Americans live in dental shortage areas, observers fear that some consumers who purchase dental insurance will find it necessary to travel long distances or face long wait times in order to make use of their dental coverage.

Those who struggled long and hard to obtain a pediatric dental benefit under the ACA are understandably disappointed by these developments, and many are hesitant to challenge the rules related to the pediatric dental benefit while so many members of Congress are still actively looking for opportunities to repeal the entire law. In a few states, however, efforts are underway to mitigate some of the law’s shortcomings.

In California, for instance, consumers may see improved options for dental coverage through the state’s Covered California health exchange, perhaps starting in 2015. Currently the state offers pediatric dental benefits only through stand-alone plans, but the state has committed to giving stakeholders a second chance to shape policy in this area and commissioned a report, which details a number of options for improving pediatric dental coverage issued through the exchange. Covered California has also conducted a survey of the state’s insurers, eight of which indicated their willingness to develop a health plan with embedded dental benefits. Consumers who purchase this type of policy benefit in two ways: they have a single out-of-pocket maximum to meet, and the IRS automatically includes the cost of dental benefits in calculating their tax credit.

California is also debating whether to make pediatric dental coverage mandatory for state residents. The purchase of pediatric dental coverage is currently mandatory in three states: Kentucky, Nevada and Washington state. Like California, Washington state’s health exchange currently offers pediatric dental benefits only through stand-alone plans, and the state is discussing the idea of offering medical plans with embedded dental coverage in the future.

Even at the federal level, there is hope in some quarters that implementation of the ACA can be modified to increase the number of children with access to dental coverage and lower its cost to consumers. CDHP, the American Dental Association and representatives of the insurance industry, including Delta Dental and the National Association of Dental Plans, are leading efforts to modify the law in two ways. These entities have sent a letter to U.S. Treasury Secretary Jack Lew asking that the IRS revisit its interpretation of the law and calculate tax credits based on the purchase of both medical and dental plans (when families purchase both) rather than on the cost of purchasing the medical plan alone.

CDHP has also asked CMS to cap the out-of-pocket maximums consumers pay at the level set for a family purchasing a medical plan with embedded dental benefits. It’s unlikely that this will occur, but CMS has proposed new lower out-of-pocket maximums for dental plans beginning in 2015. Should these rules be adopted, the out-of-pocket cost to families with stand-alone dental plans would drop to $300 for one child and $400 for two or more children, potentially saving consumers hundreds of dollars.

What does all this mean for dental education? It would be hard to argue that the implementation of pediatric dental benefits under the ACA will have any direct impact on our community. Nevertheless, it’s clear that our profession has a stake in how these events continue to unfold. I can’t help feeling that failings in the ACA’s implementation of these benefits are symptomatic of dentistry’s historic isolation within health care. We must overcome this legacy, not only in the interest of achieving universal access to oral health care, but also to assure the health and longevity of our profession.

The American Dental Association has reported that in recent years, the utilization of dental care has declined among adults, and dental spending has flattened out or even declined. With the advent of the health exchanges under the ACA, we’ve also seen a movement among some large employers—traditionally the biggest purchasers of dental insurance—toward offering their employees a stipend to purchase health coverage independently. Whether those adults will choose to purchase dental coverage remains unknown, but given the influential role dental benefits play in driving adults to seek care, we should be concerned. Recent events suggest that there’s a very real possibility that we’ll see a further decline in utilization in the years ahead.

When I first wrote about the ACA in this letter in 2011, I quoted from a statement about its passage by then ADEA President Dr. Sandra Andrieu on ADEA’s behalf. The statement read, “In our judgment, the benefits that our fellow citizens will accrue from this legislation certainly outweigh its imperfections.”

I believe that statement still holds true, even if obstacles in the path forward loom larger today than they did three years ago. It may be some time before opposition to the ACA cools to a point where supporters of oral health coverage feel comfortable taking up the charge for universal dental coverage once again, but comfort may be a luxury we cannot afford.

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