An estimated 86% of Californians have some form of dental insurance coverage. Nationally, of those with dental coverage, nearly 50% have employer-sponsored coverage; 21% have coverage through Medicaid or other public programs; and 5% purchase a dental plan on their own.
The enactment of the Affordable Care Act (ACA) in 2010 resulted in comprehensive reform of medical insurance plans, which led to increased transparency and patient protections. However, dental insurance plans were exempt from many of the ACA’s provisions. Dental plans are also exempt from other federal and state rules that medical plans must follow. In important victories for California dentists and their patients, Gov. Newsom signed two CDA-sponsored bills this year that take steps to address this issue. Both bills will take effect Jan. 1, 2025.
AB 1048 – Patient Protections & Rate Review (CDA-Sponsored): This legislation by Asm. Buffy Wicks (D-Oakland) will establish stronger patient protections and transparency in dental insurance plans by:
Dental plans are able to impose waiting periods, often ranging from three months to one year, before patients can access certain benefits (even though they are paying premiums). These arbitrary waiting periods limit the ability for a patient to access needed care, usually major services like a root canal or a crown. Dental plans can also deny coverage for pre-existing dental conditions like a missing tooth or genetic conditions like a cleft palate.
Furthermore, dental insurance is currently exempted from the state’s mandated review process for insurance premium rates. This review process applies to many other types of insurance including medical, automobile and pet insurance. Meanwhile, recent reports of health care spending show that out-of-pocket expenses for dental services grew by 16% in 2021, and a California Health Care Foundation survey found that 38% of Californians have a family member who skipped dental care last year due to cost. And yet, the typical annual coverage maximum for a dental plan has been $1,500-$2,000 since the 1970s (a $2,000 annual maximum in 1970 would be equivalent to $15,745 in 2023 dollars). AB 1048 will require greater oversight of dental insurance, authorizing the Department of Managed Health Care (DMHC) and the California Department of Insurance (CDI) to review premium rates and help protect consumers from unreasonable or unjustified increases.
AB 952 – ERISA Notification (CDA-Sponsored): This legislation by Assembly Member Jim Wood, DDS (D-Santa Rosa) will increase transparency of dental insurance by requiring appropriate notification to patients and dentists of whether a dental plan is state or federally regulated.
Dental insurance is generally regulated by state law, apart from “self-insured” employer plans which are regulated at the federal level through the Employee Retirement Income Security Act of 1974 (ERISA). In a state regulated dental plan, an employer pays a premium to an insurance carrier, and the carrier pays the cost of health care claims for anyone in the plan (employees and their dependents). Alternatively, in a federally regulated “self-funded” dental plan, an employer pays fees to an insurance carrier for certain administrative services, but the employer bears the cost of any employees’ health care claims. Despite the numerous California laws and regulations setting standards for insurance, dental plans that are federally regulated simply do not have to comply with California requirements.
The differences between state regulated plans and federally regulated plans can be extensive for both patients and dentists. As a result, understanding what a plan will cover and what a patient must pay out-of-pocket can be difficult and frustrating. Patients don’t know where or how to resolve conflicts with their plan and dentists lack clarity on the type of plan they are dealing with until after the billing process has been completed (when the plan has denied coverage or cited a billing exemption for services already rendered).
With over 40% of Californians enrolled in dental plans that are regulated under federal law, it is vital for patients and providers to be aware of which regulations and laws apply. While states do not have the authority to regulate these federal ERISA plans, additional transparency for patients and providers can be put into place at the state level.
AB 952 will require dental plans, at the time of determination of coverage for patient eligibility, to disclose to the provider whether the patient’s dental coverage is federally regulated and subject to federal compliance. It will also require that the term “state regulated” be displayed prominently on the front of the patient’s insurance information. This simple transparency measure will benefit patients and dentists without unduly burdening dental plans.
Dentistry is facing an ongoing workforce shortage of allied dental staff, exacerbated by the COVID-19 pandemic, particularly among unlicensed dental assistants (DA), registered dental assistants (RDA), and RDAs in extended function (RDAEF) positions.
In November 2021, 87% of dental offices reported that when compared to pre-pandemic, it was extremely challenging to recruit and hire dental assistants. In the same survey, 44% of dental offices identified that trouble filling vacant staff positions has limited their practice’s ability to treat more patients. Additionally, it is estimated that over the last 10 years, there has been a nearly 50% decline in the number of first-year enrollment in dental assistant education programs.
CDA is pursuing both immediate and long-term solutions through recruitment and training programs, legislation, and state budget funding to improve dental career pipeline opportunities. We support proposals that will allow RDAs to become fully trained and licensed more quickly, while maintaining quality of care. It is important to ensure the dental assisting career ladder provides meaningful career growth opportunity and is attractive to those entering the dental workforce.
We are pleased that the last two state budgets have made major investments in health care workforce development that provide opportunities to address dental staffing needs. CDA is especially supportive of additional funding for the High Road Training Partnership program focused on support for health career training, and the newly created Apprenticeship Innovation Program that will provide funding in sectors where apprenticeship training has not traditionally been common. CDA is engaged with the Newsom administration on opportunities to establish dental assisting apprenticeships and will continue to advocate for training programs targeting the allied dental workforce.
CDA has joined with the Coalition to Protect Access to Care to file a ballot measure for the November 2024 election that will protect and expand funding for California’s Medi-Cal program. The measure would permanently secure new funding for Medi-Cal dental services, student loan repayments, health care workforce development and other programs.
Medi-Cal currently provides medical and dental coverage to 15 million low-income Californians (1/3 of all residents and half of all children), making it the largest provider of health insurance in the state. The program continues to grow and, after decades of underfunding, it needs long-term, permanent funding solutions.
The ballot measure is an important opportunity to build on Medi-Cal’s recent progress and ensure health care dollars stay in the health care system. The restoration of Medi-Cal dental benefits that had been eliminated during the Great Recession, substantially improved reimbursement rates (40% increases or more across most covered dental services) and other major programmatic changes have led to meaningful and sustained results in the Medi-Cal dental Program. In the past five years, the state has seen a 30% increase in Medi-Cal dental providers, a rate that is consistently increasing each year, as well as a doubling of patient utilization of Medi-Cal dental services since the Great Recession.
The ballot measure would provide an ongoing funding source by permanently extending the state’s recently renewed “managed care organization” (MCO) tax on health insurance companies. The revenue would be dedicated for Medi-Cal and specific health programs (as opposed to the state’s general fund like previous MCO taxes) and Medi-Cal dental services would be among the programs receiving funds starting in 2027.
CDA is also pleased that the recently approved 2023-24 state budget protects recent investments in oral health access and equity, despite the budget deficit. In addition to protecting Medi-Cal, the budget protects a first-of-its-kind, $50 million investment to build and expand dental facilities for patients with special needs, and $10 million for community-based clinical education rotations for dental students to work in dental health professional shortage areas (DHPSAs).
Updated October 30, 2023