Update on health reform program implementation

Interest remains high in the provisions of the federal Affordable Care Act (ACA) health reform law, as indicated by the attendance at a CDA Presents The Art and Science of Dentistry lecture in Anaheim on the ACA.

CDA Legislative Affairs Manager Nicette Short presented “National Health Care Reform: How Will It Affect Your Practice?” — a course designed to provide information about the Affordable Care Act, its scope of coverage to individuals and small businesses and its potential impact on dentists, the oral health care delivery system and the dental benefits market.

“The health care reform law requires most U.S. citizens and legal residents to have health insurance,” Short told the attendees. “With the U.S. government estimating that more than 8 million people have signed up for coverage through the health insurance Exchanges, it’s a good start, but it’s expected the number of enrollees will increase as the program moves into subsequent years.” 

“The Exchanges are required to include pediatric oral health benefits,” said Short. “Dental practices can expect to see an increase in patients because of the expanded coverage of children in the state, and for those dentists participating in the Denti-Cal program there is also be an increased number of potential adult patients as the ACA expanded Medicaid coverage for childless adults.” 

The major provisions of the ACA are: 

  • Provides coverage for dependent children until age 26.
  • Prohibits denial for preexisting conditions for children.
  • Prohibits a lifetime dollar limit on coverage and canceling policies except for fraud.
  • Mandates individuals to purchase health insurance, or pay a tax penalty.
  • Expands Medicaid eligibility.
  • Provides tax credits for small businesses providing health care coverage.

In the presentation, Short explained the key financing mechanisms of health care reform, which include:

  • An excise tax on medical device manufacturers and a 2.3 percent sales tax on medical devices.
  • Hospital insurance tax on earned income (more than $200,000 a year for individual filers or $250,000 a year for joint filers).
  • 3.8 percent tax on unearned income (more than $200,000 a year or $250,000 jointly).

Under the reform, there are five ways people can satisfy the individual mandate to purchase health insurance:

  • Accepting employer coverage.
  • Purchasing coverage in the individual or group market.
  • Purchasing coverage through the Exchange.
  • Government coverage – Medicare, Medicaid or Veterans Administration.
  • Paying a tax penalty for not having coverage.

Approximately 20 million American households have incomes between 133 to 400 percent of the federal poverty level. These households qualify for subsidized insurance if they purchase coverage through Health Benefit Exchanges. These levels translate to household incomes of up to $44,000 a year for an individual and $90,000 for a family of four.  

In addition, Medicaid eligibility has expanded to incomes up to 133 percent of the federal poverty level.

“The goal under ACA is to have people pay less than 10 percent of their income for their health insurance,” Short said.

Short added that CDA has advocated for pediatric oral health benefits to be included in the list of essential benefits that must be covered in order for plans to be certified and offered in the Exchanges and Medicaid state plans.

“It’s estimated that approximately 1 million more California children will get coverage under health care reform and pediatric dental benefits are included,” Short said. “The mandatory coverage does not extend to adults, but CDA has been working with the state’s Exchange, Covered California, to establish the option for adults to purchase oral health care coverage in the Exchange in 2015.”

For employers, mandates under ACA require businesses with more than 200 employees to enroll each employee in a health insurance plan that includes pediatric oral health benefits. Small businesses of less than 25 employees that offer health benefits to employees may be eligible for tax credits for at least two years.

While mentioning that the market structures and coverage mandates within the ACA have caused some health premiums to rise, Short noted that there are provisions in the ACA designed to curtail large rate increases because the new law requires that independent experts and regulators review proposed increases to monitor if they are reasonable. In addition, medical loss ratio provisions instituted in the ACA require health plans to provide at least 80 percent of their premium revenue to actual patient care or provide rebates to consumers, which increases the value to consumers of their premium dollar.

“One study commissioned by Covered California indicated families earning more than $90,000 a year are likely to pay more for their coverage,” said Short. “Low-income Californians who have been unable to afford insurance are the ones who will benefit the most from the law, and that many middle-income consumers will likely see lower rates.”

The provisions of the ACA also enhance oral disease prevention, including funding of school-based health centers in which half of the $30 million allocated by the federal government has gone to California, funding:

  • Oral health prevention education campaign.
  • Research-based dental caries disease management.
  • School-based health center funding.
  • School-based dental sealant programs.

There are also oral health provisions in the ACA related to workforce, including $3 million to support oral health education programs that train future faculty in general, pediatric, public health or dental hygiene, which will increase training capacity in dentistry programs. Other provisions include:

  • National health care workforce commission.
  • HRSA competitive workforce grants.
  • Loan forgiveness programs.
  • Workforce grants for alternative providers.

Short summarized the Covered California policy decisions that still need to be made regarding dental benefits such as incorporating oral health care benefits into comprehensive medical insurance policies, and creating an option for adults or families as a whole to purchase coverage through the Exchange when purchasing the essential pediatric dental benefits.

Short will be leading another health care reform lecture at CDA Presents in San Francisco on Sept. 5. For more information, view the Preliminary Program.

For more information about the Affordable Care Act, visit our Policy Resources page.