Some consumer groups have suggested that the annual limits on the patients’ out-of-pocket spending maximums will be too high, and that recent guidance from HHS allowing a separate $1,000 out-of-pocket maximum when a stand-alone dental plan is selected should be lowered.
Consumer groups focusing here on the addition of the stand-alone $1,000 to the existing limits on qualified health plans that already include dental are missing two key points: first, that pediatric essential health benefits sold by stand-alone dental plans sold both on and off exchanges offer substantial reductions in a child’s total out-of-pocket expense; and second, that any lowering of the “reasonable amount” for the out-of-pocket maximum determined by HHS results in a major takeaway of dental coverage for 96 percent of the child population covered.
The issue comes up because the Patient Protection and Affordable Care Act (PPACA) makes pediatric oral health benefits part of the “essential health benefits” (EHB) package that any individual or small-group plan sold through a PPACA exchange must cover.
The affordable care act explicitly authorizes issuers of the medical plans sold through an exchange — the “qualified health plans” (QHPs) — to leave out dental benefits if exchange users can purchase a tand-alone dental plan approved to be on an exchange.
For a QHP, the maximum out-of-pocket spending limit — the largest amount of cash that a member could be asked to spend on deductibles, co-payments and coinsurance for in-network EHB services — can be as high as $6,400 for an individual and up to $12,800 for a family.
Ssme exchange policymakers are debating whether to force the separate out-of-pocket maximum below $1,000, as doing so does not have a significant impact on premium.
Here’s what’s being missed: When consumer groups say a dental out-of-pocket spending limit of $1,000 would be unaffordable, they are losing sight of the increased value that a significantly lower separate out-of-pocket spending limit for dental care will afford consumers.
First, consumers who choose stand-alone dental plans will receive 100 percent coverage for all of their dental expenses after just $1,000, instead of having to wait to reach an out-of-pocket maximum of up to $6,400 when they buy a QHP with embedded dental benefits.
Second, federal guidance requires insurers selling stand-alone dental plans through an exchange to design the plans in such a way that they cover either 70 percent or 85 percent of the “actuarial value” of the pediatric dental essential benefits.
Because of that actuarial value requirement, any lowering of the dental out-of-pocket maximum will mean that coverage levels need to be reduced for about more than 96 percent of the children in the covered population. That substantial majority of children will have to pay higher deductibles and copayments for preventive care and services, because there is no other way to lower the actuarial value of these products once the out-of-pocket maximum is lowered to be more easily reached.
Finally, the consumer groups should note that without the stand-alone dental option, the QHP deductible for combined medical and dental care could be as high as $2,000 per person, and $4,000 per family. Most children in such plans, with typical low utilization of medical services, could wind up paying for all of their dental care needs with no coverage at all, even though they are “insured.”
For all these reasons, the real consumer goals of keeping costs down and maximizing dental coverage for children is realized in the current HHS guidance exactly as it stands.
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