Dental Insurance– 2015 Dental

by Mark Roberts 

It’s a new year, and with it brings expectations of new opportunities. For the health care community, one huge event is the advent of new ways to increase healthier lifestyles while decreasing costs. Individual consumers are going to face a gauntlet of choices for providers, carriers, and plans. Employers are going to see more options for private exchanges, voluntary benefits, and government requirements.

Brokers are likely to continue to experience less money for more work, but then also find new ways to replace lost revenues.

Within the medical maelstrom that is healthcare, one constant is true. As your eyes are windows to the soul, so your teeth and gums are the pathway to your overall health. As has been documented by numerous studies, people who consistently practice good oral hygiene are less likely to have poor health. The medical community already knows that the opposite is true, and that various periodontal and other oral health problems lead to Alzheimer’s, low birth weight in babies, cancers, heart disease, diabetes, and worse.

What does that mean to Californians? Dental care is on the way. According to Covered California, the exchange is offering new family dental plans to consumers who enroll in health insurance coverage in 2015. Additionally, all individual health insurance plans sold through the Covered California exchange will include pediatric dental benefits for members younger than 19.

Covered California Executive Director Peter V. Lee said, “This is great news for families and children because all children enrolled in Covered California will have dental coverage embedded in their comprehensive health plan. They will be getting better coverage and more for their money. One downside, however, is there is no financial assistance available for the optional adult dental benefits.”

The Sacramento Business Journal reported in late 2014 that, starting in 2015, employers will be able to offer separate dental plans for adults. These benefits will be employee paid, with no additional cost to employers. Pediatric dental care is a basic benefit already offered as part of health coverage. This will continue.

Dental carriers that intend to offer products in Covered California in 2015 include: Access Dental Plan, Blue Shield of California, Delta Dental of California, Dental Health Services, Guardian, Liberty Dental Plan of California, Managed Dental Care of California, MetLife, Premier Access and Safeguard Health Plans Inc. available through the Small Business Health Options Programs (SHOP) program. SHOP is open to California businesses with 50 or fewer employees. And, there is no requirement to enroll or penalty for not participating. Some small business owners are eligible for a tax credit if they do sign up.

Additionally, one fly in the ointment is the maximum out-of-pocket—reduction for 2015 dental cost limits. Solstice Benefits reports that a March 2014 final rule released by the Health and Human Services Department (HHS) outlines revisions to the Affordable Care Act (ACA) including significantly reduced dental maximum out-of-pocket cost limits for all exchange certified stand-alone pediatric dental plans sold inside and outside the public exchanges in 2015.

This revision leaves many in the dental insurance industry pondering what the effects will be to the industry, to consumers, and to the children the pediatric dental benefit serves. As their trusted insurance broker, your role will be to guide your client’s understanding of the 2015 ACA changes.

The maximum out-of-pocket applies in the following:

• Federally facilitated marketplaces

• State-based marketplaces

• Marketplace-certified plans sold outside the marketplaces in the small group and individual markets.

Without satisfactory time or data to analyze experience under the 2014 maximum out-of-pocket limits, it is not clear, yet, how the lower maximum out-of-pocket in 2015 and beyond will affect plan designs, premiums, and the purchase of standalone pediatric essential health benefits. Maximum out-of-pocket rules are tricky and complicated. It’s best for employers to consult with tax counsel and benefits advisors when navigating the ACA regulatory sea.

What about buying dental plans on line? A number of online resources are available whether individuals have the luxury of going through an employer for dental insurance or are looking for individual plans. It can be difficult to choose a company when there are so many out there — from major insurance providers to dental-specific insurance companies, to companies that offer plans from a number of providers.

It’s relatively easy for some savvier consumers to search for an individual plan on sites like DentalPlans.com; but with so many choices to research, the options can be somewhat overwhelming for the average shopper. That’s one reason why brokers and agents have an advantage. You should already know your market, and your client, and be able to offer the best options out of so many available.

But for employers, it’s not that easy. Group dental is an altogether different animal. Since most dental plans are now voluntary for employees, employer-paid plans are going away like the dinosaurs — soon to be extinct. Plus, the participation rates are usually pretty low, especially if there is no subsidy provided to offset the premiums. Many people assume that employer sponsored dental plans are automatically a good deal because you’re receiving a group rate, but this isn’t necessarily true.

When evaluating a group dental plan, make sure to really look at the monthly payments, the annual maximum and the co-payments. Employers may offer a great plan that’s only $20 a month to cover an employee’s entire family with a generous annual maximum, or a mediocre plan that’s $40 a month with a $1,000 annual maximum. With the former, employees can really benefit, but with the latter, they’re probably wasting their money. If the employees pay for the entire premium, the cost can be too burdensome for many employees; part timers, retirees, and hourly workers usually won’t buy. You should do the math for individual situations to determine whether you’re likely to come out ahead.

Finally, there is some positive news about transparency in the dental business. Governor Jerry Brown recently signed into law a bill that increases the accountability and transparency of dental insurance plans in the state, according to the California Dental Association. The bill establishes standardized requirements for dental plans to disclose how they spend patient premium dollars and puts the state on a path to establish a minimum percentage of consumer premium dollars on patient care.

The CDA President stated that this bill will shine a light on dental plan spending, which should incentivize plans to improve the value of their products and will help guide the state toward an appropriate minimum standard for spending on patient care. Hopefully, dental sticker shock should be reduced as plans implement changes. This is good for brokers as a major selling point. There is still good money to be made selling dental plans whether you push fully or self-insured plans, indemnity plans, or discount plans as a supplement or dual option.

Dental is still a needs based product for most people, and it’s expensive for major dental work like crowns, root canals, implants and orthodontia. If you have to choose between making your mortgage payment and buying food over getting your teeth fixed, guess which category wins the day. That’s why the push for affordable dental care is so great. Research by the US Health & Human Services Administration shows dental care is a huge health care crisis. Here are some current statistics:

• Dental care is the most prevalent unmet health need of children in the United States — seven times greater than asthma related illnesses.

• An estimated 17 million children in America go without dental care each year.

• More than 51 million school hours and 164 million work hours are lost each year due to dental disease, leading to increased educational disparities and decreased productivity.

• Approximately 43% of America’s lack dental insurance, including more than 20 million children, almost 3 times the population lack medical coverage.

• Emergency room visits for dental care is the highest in history with over 1 billion dollars per year in tax payer funded care.

The shift toward better oral hygiene is definitely on the upswing with more demand in the market for access to quality dental care and affordable dental plans. California is making some progress. Good things are happening, but just not fast enough. The question remains about when a tipping point will be reached for broader, more easily accessible, cost effective, and less regulated care. For now, it’s still a distant ship on the horizon of an ever changing sea.

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Mark Roberts’ professional sales background includes over 30 years of sales and marketing in the tax, insurance and investment markets. Mark is a licensed life, health and accident insurance agent in all 50 states and DC, for insurance products and discount health plans. Mark has also been writing a health care blog for the past 7 years, (www.yourbesthealthcare.blogspot.com), which is a topical weblog about various health care issues. You can reach Mark at MarkR1955@gmail.com.