Date Archives March 2013

Further On Down the Road: the ACA Progresses

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The pieces continue to come together as we work to understand the full impact of the Affordable Care Act (ACA). A big piece fell into place when the Department of Health and Human Services (HHS) released its final rule on the Essential Health Benefits (EHB), Actuarial Value (AV) and Accreditation on Feb. 20. The rule lets us address some of the unknowns raised in past blogs as well as confirm some of the proposed rules.

The most important development for standalone dental is that HHS granted the long-requested “outside the exchange” waiver. Specifically, HHS said the pediatric-oral EHB (POEHB) can be offered on- and off-exchange through a standalone dental plan. Previously, the POEHB could be provided through a standalone dental plan on-exchange, but had to be embedded in the medical plan off-exchange.

This clarification clears the way for the separate choice and purchase of medical and dental coverage on- and off-exchange, meaning the 98 percent of the market that buys medical and dental separately can keep doing so. Standalone dental will be treated the same on- and off-exchange.

The waiver off-exchange also means childless adults who buy medical coverage off-exchange do not have to purchase the POEHB. Previously, any medical plan sold in the small-group or individual market off-exchange had to embed POEHB, meaning childless adults would be paying for coverage they didn’t need and couldn’t use. Now they can buy a medical plan and a standalone dental plan that mirrors their coverage needs.

As part of the final rule, “pediatric” is defined as up to age 19, with flexibility for states to extend pediatric coverage beyond this limit. This matches the definition in the proposed rule released last November.

HHS also confirmed and clarified coordination of benefits between medical and standalone dental plans. The POEHB will have a separate out-of-pocket limit if provided by a standalone dental offering, and will be subject to the medical out-of-pocket limit if it’s embedded in the medical plan.

The out-of-pocket limit for standalone dental plans providing the POEHB must be “reasonable,” but the final rule did not define what “reasonable” means. Instead, the limit will be defined by the exchanges. For states (like Wisconsin) with a Federally Facilitated Exchange (FFE), HHS anticipates issuing further interpretive guidance to define “reasonable.” Delta Dental of Wisconsin recommends an out-of-pocket limit of $1,000 as a balance between coverage affordability and member costs.

HHS confirmed as part of the final rule that only “medically necessary” orthodontia is covered as part of the POEHB. HHS further clarified in the rule that “cosmetic” was intended to mean “non-medically necessary,” meaning that “non-medically necessary” orthodontia is not covered as part of the POEHB.

In its ruling, HHS reaffirmed that standalone dental plans will calculate AV independently of the other EHBs and will be subject to separate AV requirements, whereas a POEHB embedded in a medical plan will be included as part of the medical AV.

The POEHB sold through standalone dental plans will be classified as either a high plan or a low plan. The November proposed rule set the AV of the high plan at 85% and the low plan at 75%, with a variance of +/- 2%. The final rule created more space between the two standalone dental options. The high AV remained at 85%, but the low AV was adjusted to 70%. The standalone dental AV still has an allowed variance of +/- 2%.

There’s still a lot of work to be done to get ready for ACA implementation. Delta Dental of Wisconsin continues to stay on top of all the latest developments; we remain your source for information on the ACA and the future shape of dental benefits in Wisconsin.

D&P, Definitely and Positively

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One of the signs that people’s oral health is improving is a higher percentage of dental claims stemming from diagnostic and preventive (D&P) procedures – cleanings, exams, X-rays, fluoride treatments, and sealants. The greater the percentage of D&P claims, the better the general oral health of your population.

The good news is that according to Delta Dental’s annual book-of-business norms study, in 2012 the company’s claims included a greater percentage of D&P claims than ever before.

Adding together diagnostic and preventive claims, 46.7 percent of Delta Dental’s claims fell into these categories. Compare that to 2002, when the total was 39.5 percent, or even 2008, when the total was 43.5 percent.

You can really see what’s happening in the graph below. There’s been a small amount of movement — a negative two-tenths of 1 percent — in the percentage of fillings (the green bar) since 2002. The percentage of claims coming from orthodontics (the rose-colored bar) has slipped 1.3 percent. The percentage of cast crowns (the blue bar) has slipped a substantial 3 percent — and D&P (the yellow and orange bars) has picked up the slack:

These movements may not seem huge from year to year; for instance, the 2011 D&P total was 46.4 percent, meaning the year-over-year movement was 0.3 percent. But when you consider that this is a 0.3 percent movement over millions of claims, suddenly the impact becomes clearer: More and more people are seeing their dentist for preventive care, and not the generally more expensive procedures like root canals and gum-disease treatment.

There are several reasons for this shift, according to Dr. Fred Eichmiller, vice president and science officer at Delta Dental of Wisconsin. Namely:

  • Dentists are doing a better job getting their patients on a maintenance schedule. Especially during the economic downturn, when demand fell for whitening and other cosmetic procedures, many dentists adapted by getting more of their patients on regular schedules for checkups and cleanings. As the economy improved, the schedules remained.
  • People are more aware of the value of oral health. Increased press coverage surrounding the passage and implementation of the Affordable Care Act has placed the spotlight on oral health and the value of dental benefits.
  • Younger workers who have grown up taking advantage of their parents’ dental benefits and understanding the value of oral health are a larger part of the workforce. People are more accustomed to having and using dental benefits. More often than not, they use their benefits on D&P care.
  • Dental benefits themselves have guided people toward preventive treatment. Most plan designs are weighted toward D&P coverage, meaning there’s a built-in incentive for seeing the dentist and having these procedures done. This has a spillover effect on the more costly, more involved procedures that aren’t done as a result.

All of which is very good news for health care and dental benefits.