How Will Health Care Reform Affect Your Practice?
Are you curious how the hotly debated new health care reforms will affect you and your dental practice? You are not alone. The Patient Protection and Affordable Care Act and subsequent corrections bill was signed by President Obama on March 31, 2010, and became Public Law 111-152. Hundreds of millions of Americans are trying to understand how this complex piece of legislation will ultimately affect them.
Patients know their doctors and dentists have been following the health care legislative issues closely, and many are already asking providers how the new health care reforms will affect them. Equipping dental team members with a basic understanding of the new health care reforms will help them field the patient inquiries that are certain to arise during the months ahead. Let’s start by looking at the impact the new health care law may have on dental practices.
More Dental Coverage for Children
The new health care law’s biggest impact on dental practices is its emphasis on children’s oral health. All qualified health plans are required to provide pediatric dental benefits by 2014. Exactly which dental services will be covered for children is yet to be determined. However, by 2014, it will not be possible to purchase medical insurance through an insurance exchange (which is where an estimated 30-40 million people will obtain medical insurance) without also having pediatric dental benefits. (To keep this in perspective, Medicare currently covers 40 million people.) The dental coverage may be integrated into medical plans, subcontracted by medical plans to dental carriers, or offered through stand alone dental plans. The pediatric dental benefits that will be available through insurance exchanges will not be a part of, or an extension of, Medicaid. Allowable fees will be established by the medical and dental plans themselves justas they are today.
According to the Academy of General Dentistry (Overview of Health Care Reform, April 5, 2010), the essential health benefits for pediatric dental care will be determined by the Secretary of Health and Human Services (HHS) and the Secretary of Labor, who will be conducting a survey of employer-sponsored coverage to determine the benefits typically covered. After HHS defines “essential pediatric oral care,” it will place a Notice in the Federal Register, and the public will have an opportunity to comment.
Adult Dental Benefits—Medicare Advantage
Adult dental benefits are not required as part of health care reform. However, the new law does stipulate that dental and vision coverage should be a priority for the extra federal funds paid to Medicare Advantage plans. Medicare Advantage is an alternative option to the federally administered Medicare program and is paid more than the cost of care for beneficiaries under the traditional Medicare program. Many plans have used this extra money to provide extra benefits that are not available under traditional Medicare. The new health care law instructs Medicare Advantage plans to specifically prioritize spending of the extra federal money they receive toward 1) cost-sharing reductions, 2) wellness and preventive care, and 3) dental and vision coverage.
National Public Education Campaign
Dental practices will also benefit from a five-year National Public Education Campaign. The campaign will focus on oral health care prevention and education including prevention of oral disease such as early childhood caries, periodontal disease, and oral cancer. The campaign is scheduled to begin within the next two years and will deliver oral health prevention messages that promote water fluoridation and dental sealants.
Caries Management Grants
The new law mandates the expansion of school-based dental sealant programs to all 50 states and Indian tribes and provides a variety of grants to community based providers of dental services involved in improving children’s health.
Dental Workforce Capacity
Increasing dental workforce capacity is specifically addressed as a high priority in the new law. For the first time in history, Congress has allocated funding for dental training separate from medical training. Thirty million dollars has been authorized (for 2010) for grants or contracts with dental schools and nonprofit agencies to develop and operate professional training programs in the field of general dentistry, pediatric dentistry, or public dentistry. Some of the funds will be used to provide financial assistance to students in dental and hygiene programs.
HHS is also authorized to award grants for programs that train or employ “alternative dental health care providers” in rural and underserved communities, where permitted by state law. An “alternative dental health care provider” includes community dental health coordinators, advance practice dental hygienists, independent dental hygienists, supervised dental hygienists, primary care physicians, dental therapists, dental health aides, etc.
Employer and Personal Impacts
Everyone who owns a dental practice or works in the dental field will likely be impacted by the new health care reforms at some level. Some of the more publicized changes include employer penalties for not offering health benefits, individual penalties for not obtaining health benefits, the creation of insurance exchanges, an excise tax on high cost health plans, the elimination of pre-existing exclusions, and the elimination of lifetime caps on employer-sponsored health plans.
Employer Penalties for Not Offering Health Benefits
Employers who have more than 50 employees must offer health insurance benefits to their employees or pay penalties as high as $2,000-$3,000 per employee. Small businesses with 25 or feweremployees who meet certain wage requirements will be able to receive tax credits to assist with the purchasing of health insurance for their employees.
Penalties for Individuals Who Do Not Obtain Health Insurance
Fines will be established for individuals who fail to obtain qualified health insurance coverage. Currently, the fines are scheduled to phase in up to a maximum of $695 per individual or 2.5% of annual income, whichever is higher.
Insurance Exchanges (SHOPs)
Slated to begin in 2014, small business owners, the self employed, and those who do not have employer-provided coverage will be able to obtain health insurance benefits through Small Business Health Options Programs (SHOPs). These state-run insurance exchanges will provide a range of more affordable options (including a public plan) for individuals and employees of small businesses. The health care reform law mandates “essential benefits” for health care policies sold on the state-run exchanges, which include ambulatory services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse disorder services, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric vision and oral health care.
High Cost Health Plan Excise Tax
Beginning in 2018, high cost health plans with premiums of more than $10,200 for an individual and $27,500 per family —not including vision and dental—will be subjected to a hefty 40% excise tax (i.e., “Cadillac” tax). According to the Kaiser Family Foundation, the average cost of a family plan in 2009 was $13,375, with employees paying an average of $3,515 and employers paying $9,860. The excise tax would be paid by insurance companies and employers that self-insure their health benefit plans (which most large companies do now).
No Exclusions for Pre-existing Conditions
Effective this year for children and in 2014 for adults, health insurance plans can no longer deny coverage due to pre-existing conditions. Additionally, health insurance carriers can only vary premiums based on a person’s age, demographic region, and tobacco use—not on health status.
No Lifetime Caps on Employer-sponsored Health Plans
Within six months of the bill becoming law, lifetime caps on employer-sponsored health insurance must be removed.
Extended Coverage for Dependents
Within six months of the bill being signed into law, health care plans are required to provide dependent coverage up to age 26. It is not clear yet if this will also apply to dental coverage.
AGI Threshold Increases for Itemizing Medical Expenses
Beginning in 2013, the adjusted gross income (AGI) threshold for claiming the itemized deduction for medical (and dental) expenses increases from 7.5% to 10%. The threshold remains at 7.5% until 2016 for those who are 65 or older.
Flexible Spending Accounts Limited
Beginning in 2013, the amount that individuals can contribute to a flexible spending account will be limited to $2,500.
Medicare Tax Increase for High-Income Taxpayers
The Medicare payroll tax for employees increases from 1.45% to 2.35% for individual taxpayers earning over $200,000 ($250,000 for couples filing jointly).
New Medicare Tax Levied on Investment Income
Taxpayers who earn over $200,000 ($250,000 for couples filing jointly) will be charged a new Medicare tax (3.8%) on net investment income, which is defined as interest, dividends, royalties, rents, gross income from a trade or business involving passive activities, and net gain from disposition of property.
The Patient Protection and Affordable Care Act of 2010 includes a wide variety of policies to address a single problem—that too many Americans are without health care coverage. Despite the mixed feelings that many Americans have had about the process and outcomes of the legislation, it is encouraging that pediatric oral health has been so thoroughly integrated into health care reforms. According to Burton Edelstein, DDS, MPH, from the Children’s Dental Health Project, the expansion of dental coverage for children is expected to be huge. By 2014, between Medicaid, CHIP, and the new health care law, all children in America (excluding illegal immigrants) will have dental coverage and access to essential dentalservices, however those end up being defined. These children will be looking for a place to call their dental home. This is a milestone we can all celebrate.