Dental insurers eye 2014, await regulatory guidance

With childrens dental coverage set to expand as a result of health reform , the dental industry is trying to get a sense of what the dental insurance market, and the state and federal rules impacting it, might look like in the coming years.

Today, adult and childrens dental plans are mostly sold through family and group plans, and that's likely to change in the next few years  -  bringing new market dynamics and also some administrative challenges.
An essential health benefit under the Affordable Care Act, pediatric dental plans will be sold in insurance exchanges, both packaged with adult plans and as stand alone plans.

"It's a very, very big shift from the way dental insurance is currently sold," said Joanne Fontana, an actuary who tracks healthcare and health insurance for the actuarial and consulting firm Milliman. "For the first time, there's a need for pediatric-only plans."

State and federal governments still need to decide benefit levels and cost structures for stand-alone dental plans and medical-dental packages, in and outside of the exchanges, Fontana said. A lot of decision-making on exchanges has been left to the states, and a lot of states haven't even decided if they want to create an exchange, or have worked out the details.

Some 5.3 million children are expected to gain dental coverage after 2014, either through public programs or in exchanges, according to the Pew Center on the States. And nearly 23 million children are already covered through their parent's dental insurance in employer groups of 100 or less, said Evelyn Ireland, executive director of the National Association of Dental Plans.

One uncertainty, Ireland said, is whether insurers will be able to offer medical plans without pediatric dental plans in the small group and individual market, as is permitted today and will also be permitted in the exchanges.

If the Department of Health and Human Services doesn't clarify this issue in their final rules, Ireland said, "those children could have their current coverage duplicated by a medical plan or will have their dental coverage changed to their health carrier."

The potential changes are small, all insurance considered, Ireland said, but it'd be a lot of work for families if it also meant changing dentists. Either way, most, if not all, carriers are preparing to offer stand-alone childrens dental policies, Ireland said.

Another uncertainty comes from ACA rules on cost sharing limits for essential health benefits, Milliman's Fontana said.

Hypothetically, if someone has a medical plan for themselves and his or her child, and has a separate dental plan for the child, somehow the two insurance companies have to co-administer cost sharing limits--a problem without easy solutions, Fontana said.

"If you're going to administer that, you would have to have claims accumulators going on the medical side and claims accumulators on the dental side that would have to talk to each other," Fontana said. "For that to happen in reality, it's just not a pragmatic solution."

It's possible a software company could create a program to align the two claims systems linked with the plans, or DHHS could exempt this aspect of cost sharing.

[Among other uncertainties the dental insurance industry has on its radar, Ireland said, is the possibility that more adults could forgo dental coverage. If middle class families are under budget constraints, as many are in these economic times, adults might try to save money by purchasing medical-only plans for themselves and buy dental plans for their children seperately.

About 54 percent of Americans had dental insurance as of 2009, according to the National Association of Dental Plans. In a recent report, the group estimated that 11 million Americans, or half of adults with employer‐provided dental coverage in today's small group market, could drop coverage if their dental coverage is separated from their children's coverage and the cost of the children's coverage is thought too high.

That may bode ill financially for the healthcare system. If people let their dental health decline for years, they're likely to go to the emergency room when they're in pain--as a lot of people have been doing in Kentucky, a state where most adults lack dental coverage, the Cincinnati Enquirer wrote recently.