9/24/2015
1
Dental ACA Update:Exchanges and Medicaid
ExpansionJoanne Fontana and Teresa Wilder
Milliman, Inc.
September 30, 2015 3:15-4:15 PM
DOWNLOAD THE
CONVERGE EVENT APP
Search “NADP CONVERGE”
or go to tinyurl.com/nadpcon15
9/24/2015
2
3
Agenda
ACA Exchange Update
1. Review of Exchange Product and Pricing Considerations
2. Enrollment Statistics and Commentary
3. Standalone v. Embedded Pediatric Dental
ACA Medicaid Expansion Update
1. Medicaid Dental Landscape
2. Medicaid Expansion under ACA
3. Concerns and Considerations
September 30, 2015
4
ACA: Pediatric Dental Essential Health Benefit ACA defined minimum essential health benefit (EHB) package
required in individual and small group markets
“Pediatric oral health services” is one of the named EHBs
Adult dental is NOT an EHB
September 30, 2015
Pre-ACA ACA
Group Coverage
Family Coverage
Separate from Medical
Individual Coverage
Pediatric and Adult Coverage
Separate or Embedded
9/24/2015
3
5
What is the Pediatric Dental EHB?States charged with defining benchmark plan for EHB
All of the benchmarks provide comprehensive pediatric dental coverage of preventive/diagnostic, basic, and major services
Almost all states cover orthodontia when medically necessary
Benchmarks are being revisited for 2017 policy year
September 30, 2015
6
Pediatric Dental EHB on Exchanges May be embedded in medical or sold by standalone dental
plan (SADP)2015 exceptions:
– Alaska, California, Vermont, West Virginia, Washington DC – all QHPs embedded
Standalone dental product could be a pediatric EHB-only plan or a family dental plan with EHB included
Required “offer”, not required “purchase”– Except for states listed above
– Nevada was required purchase in 2014, now required offer
September 30, 2015
9/24/2015
4
7
Pediatric Dental EHB Off Exchanges
“Equitable Treatment” issue
ACA says that off exchange, medical carriers must offer all 10 EHBs
If medical issuer is reasonably assured that pediatric dental EHB has been obtained via Exchange-certified standalone dental plan, need not offer the benefit in medical plan
Pediatric dental EHB can come from medical carrier or SADP
Some states have provided guidance on how reasonable assurance and exchange certification are defined
September 30, 2015
8
Pediatric Dental EHB Product/Pricing
September 30, 2015
Group Coverage
Family Coverage
Annual Benefit Maximum
Orthodontia with Lifetime Maximum
Standalone Dental
Individual Coverage
Pediatric and Adult Purchase May Be Separate
No Annual Benefit Maximum
Medically Necessary Orthodontia
Actuarial Value
Out-of-Pocket Maximum
Standalone v. Embedded
Pre-ACA ACA
9/24/2015
5
9
Pediatric Dental Actuarial Value
September 30, 2015
High (85%) or Low (70%) AV for pediatric dental EHB
No standard methodology; carriers have actuary certify
Must adjust cost sharing to comply with AV
Fairly similar plan designs across carriers
Standalone Dental Plan Embedded in Medical Plan
No specific AV requirement for pediatric dental EHB
component
Plan AV calculated with HHS standard calculator
Changes to pediatric dental benefits do not affect overall
plan AV
Wide variance in pediatric dental benefit richness
10
Pediatric Dental OOP Maximum
After OOPM achieved, plan pays 100% of dental cost for remainder of year
Example: child needing orthodontic treatment costing $3,000
September 30, 2015
$350/$700 OOPM for 2016
Standalone Dental Plan Embedded in Medical Plan
Pediatric dental subject to overall plan OOPM
($6,600/$13,200)
9/24/2015
6
11
1.4M SADP selections in the 37 states using healthcare.gov
25K SADP selections in 14 SBMs
Age breakdown for healthcare.gov states:
Enrollment Statistics (March 2015)
September 30, 2015
SADP Selections by Age % of SADP Total
% of QHP Age Group Total
Age < 18 7% 14%Age 18-25 12% 16%Age 26-34 22% 20%Age 35-44 19% 18%Age 45-54 20% 15%Age 55-64 20% 12%Age ≥ 65 0% 0%Total 100% 16%Source: Health Insurance Marketplaces 2015 Open Enrollment Period: March Enrollment Report. Department of Health and Human Services.
12
Standalone v. Embedded Dental EHB
September 30, 2015
Price Point and
Benefits
Admin Costs
Actuarial
Value
Adverse Selection
OOP Max
9/24/2015
7
13
SADP versus Embedded EHB
ADA Health Policy Institute Research Brief – February 2015
Key Findings:
Upward trend in share of medical plans with embedded pediatric dental benefits on exchanges
Embedded more likely than SADP to offer first dollar coverage for preventive dental services
Less expensive to purchase pediatric dental coverage via embedded plan
Upward trend in number of SADPs offering family dental
September 30, 2015
14
SADP versus Embedded EHB
Upward trend in share of medical plans with embedded pediatric dental benefits on exchanges
Across 40 states studied: 35.7% in 2015 v. 26.8% in 2014
Embedded pediatric dental characteristics:
September 30, 2015
Embedded Plan Pediatric Dental Deductible % of Plans
Medical Deductible, Waived for Preventive Dental Services 65.5%
Medical Deductible, Not Waived for Preventive Dental Services 23.8%
Separate Dental Deductible, Waived for Preventive Dental Services
4.7%
No Deductible, First Dollar Preventive Dental Coverage 5.5%
No Deductible, Non-First-Dollar Preventive Dental Coverage 0.5%
Source: “More Dental Benefits Options in 2015 Health Insurance Marketplaces”. ADA Health Policy Institute, February 2015.
9/24/2015
8
15
SADP versus Embedded EHB
Embedded more likely than SA to offer first dollar coverage for preventive dental services
Standalone plan characteristics:
75.7% of embedded plans offer first dollar preventive dental compared to 43.9% of standalone plans
September 30, 2015
SADP Pediatric Preventive Dental Cost Sharing % of Plans
Deductible waived for preventive services 39.6%
Deductible not waived for preventive services 43.1%
No deductible; first dollar preventive coverage 4.3%
No deductible; non-first-dollar preventive coverage 13.0%
Source: “More Dental Benefits Options in 2015 Health Insurance Marketplaces”. ADA Health Policy Institute, February 2015.
16
SADP versus Embedded EHB
Less expensive to purchase pediatric dental coverage via embedded plan
September 30, 2015
Pediatric Dental Plan Type 2015 Monthly Per Member Premium or “Shadow Premium”
Embedded $16.21
Standalone 70% AV $27.61
Standalone 85% AV $35.95
Source: “More Dental Benefits Options in 2015 Health Insurance Marketplaces”. ADA Health Policy Institute, February 2015.
9/24/2015
9
17
SADP versus Embedded EHB
Why are embedded plans able to offer seemingly better coverage at a lower cost than SADPs?
Cost spread over all members rather than per child
SADPs must contend with:
– $350/$700 OOPM
– Actuarial Value requirements
– Benefit plan ramifications of meeting OOPM and AV requirements
– Recouping admin costs over lower premium base
Coverage for non-routine services likely better under SADPs but that is not as obvious and impacts far fewer children
September 30, 2015
18
SADP versus Embedded EHB
Upward trend in proportion of SADPs offering family dental
2014: 42.0% of SADPs were child-only, 58.0% family
2015: 29.6% of SADPs child-only, 70.4% family
Why?
September 30, 2015
Source: “More Dental Benefits Options in 2015 Health Insurance Marketplaces”. ADA Health Policy Institute, February 2015.
9/24/2015
10
19
Medicaid Dental Landscape
• Children / CHIP –• Mandatory Comprehensive Benefit
• Traditional Adult Medicaid Populations• No minimum requirements• Dental benefits for adults range from no
coverage to emergency only to comprehensive• 46 states and Washington DC offer some level
of dental benefit to Medicaid-enrolled adults • Adult dental benefits can vary by population
type such as pregnant women, disabled, elderly and all other
Dental Coverage
by Medicaid
Population
September 30, 2015
Source: http://www.chcs.org/media/Adult-Oral-Health-Fact-Sheet-_070615.pdf
20
Med
icai
d A
dult
Den
tal B
enef
its Emergency OnlyRelief of pain under defined emergency situations (e.g.,
uncontrolled bleeding, traumatic injury, etc.)
LimitedFewer than 100 diagnostic, preventive, and minor restorative procedures recognized by the American Dental Association (ADA); per-person annual expenditure cap is $1,000 or less
ComprehensiveA mix of services, including more than 100 diagnostic,
preventive, and minor and major restorative procedures approved by the ADA; per-person annual expenditure cap is at
least $1,000
Medicaid Dental Landscape
September 30, 2015
Source: http://www.chcs.org/media/Adult-Oral-Health-Fact-Sheet-_070615.pdf
9/24/2015
11
21
Medicaid Dental Landscape
15 states cover emergency dental onlyFL, GA, HI, ME, MD, MS, MO, MT,
NV, NH, OK, TX, UT, WV, ID
15 states cover emergency dental onlyFL, GA, HI, ME, MD, MS, MO, MT,
NV, NH, OK, TX, UT, WV, ID
17 states cover limited dental benefitsAR, CO, DC, IL, IN, KS, KY, LA, MI,
MN, NE, PA, SC, SD, VT, VA, WY
17 states cover limited dental benefitsAR, CO, DC, IL, IN, KS, KY, LA, MI,
MN, NE, PA, SC, SD, VT, VA, WY
15 states offer comprehensive dentalAK, CA, CT, IA, MA, NJ, NM, NY,
NC, ND, OH, OR, RI, WA, WI
15 states offer comprehensive dentalAK, CA, CT, IA, MA, NJ, NM, NY,
NC, ND, OH, OR, RI, WA, WI
No adult dental benefits AL, AZ, DE, TN
No adult dental benefits AL, AZ, DE, TN
September 30, 2015
Source: http://www.chcs.org/media/Adult-Oral-Health-Fact-Sheet-_070615.pdf
Dental Coverage by State for Traditional Adult Medicaid Population
22
Medicaid Dental Landscape
Adult Medicaid dental benefits are frequently changing on a state by state basis
Coverage decisions tend to be significantly tied to financial conditions of the state and correspond to budget cycles
In the years following 2008, with the recession, several states began to reduce or eliminate adult dental benefits
Recently, many states are moving to enhance or reintroduce dental coverage for Medicaid adults
September 30, 2015
9/24/2015
12
23
Medicaid Dental Landscape
September 30, 2015
Recent Enhancements to Adult Medicaid Dental Benefits
California – Restored adult dental coverage (May 1, 2014)
Colorado – Added adult dental coverage (April 1, 2014)
Illinois – Restored adult dental coverage (July 1, 2014)
Minnesota – Expanded adult dental services (July 1, 2013)
South Carolina – Reinstated adult emergency dental (April 1, 2014);
Added preventive dental benefits with $750 annual max (July 1, 2014)
Vermont – Increased dental cap from $495 to $510 (January 1, 2014)
Washington – Restored adult dental coverage (January 1, 2014)
Source: http://files.kff.org/attachment/medicaid-in-an-era-of-health-delivery-system-reform-results-from-a-50-state-medicaid-budget-survey-for-state-fiscal-years-2014-and-2015-report
24
Medicaid Expansion
Patient Protection and Affordable Care Act (ACA) –Medicaid Expansion Overview
ACA prescribed expansion of Medicaid coverage for adults up to 138% of federal poverty level (FPL)
US Supreme Court ruled that Medicaid expansion was at the option of each state
Currently 29 Medicaid expansion states, plus DC
Useful resource for tracking current status of Medicaid expansion by state – https://www.advisory.com/daily-briefing/resources/primers/medicaidmap
September 30, 2015
9/24/2015
13
25
Medicaid Expansion
Enrollment Observations
Among states that had implemented Medicaid expansion and were covering newly eligible adults in June 2015, Medicaid and CHIP enrollment rose by approximately 29.7% compared to the July-September 2013 baseline period. 1
States that have not, to date, expanded Medicaid reported an increase of approximately 9.8% over the same period. 1
The potential coverage expansion is significant, with up to 8.3 million adults gaining some form of dental benefits coverage through Medicaid. 2
1. http://www.medicaid.gov/medicaid-chip-program-information/program-information/downloads/june-2015-enrollment-report.pdf
2. http://jada.ada.org/article/S0002-8177%2815%2900644-3/pdf
September 30, 2015
26
Medicaid Expansion
Financial Considerations of Medicaid Expansion
Under traditional Medicaid, the Federal Government covers approximately 50% to 70% of costs varying by state
ACA requires the federal government to cover 100% of costs associated with Medicaid expansion populations from 2014 to 2016
Federal government contribution will taper down to 90% by 2020
September 30, 2015
2014 – 2016
100%2017
95%
2018
94%
2019
93%
2020
90%
Source: http://www.publicconsultinggroup.com/news/post/2013/02/15/CMS-Posts-Guidance-on-Medicaid-Expansion-FFP-Rates.aspx
9/24/2015
14
27
Medicaid Expansion
Dental Benefits for Expansion Population
Consistent with traditional adult coverage, there are no minimum requirements for dental coverage for Medicaid expansion populations
Dental coverage for expansion populations does not have to match coverage for the traditional adult Medicaid populations
North Dakota is the only expansion state to adopt dental benefits for its expansion population that do not mirror dental benefits for the traditional Medicaid adult population
– Comprehensive dental benefits are provided to traditional adult enrollees
– No dental benefits are provided to the expansion population
September 30, 2015
28
Medicaid Expansion
6 states cover emergency dental only
HI, MD, NV, NH, MT, WV
6 states cover emergency dental only
HI, MD, NV, NH, MT, WV
10 states cover limited dental benefits
AR, CO, DC, IL, IN, KY, MI, MN, PA, VT
10 states cover limited dental benefits
AR, CO, DC, IL, IN, KY, MI, MN, PA, VT
11 states offer comprehensive dental
CA, CT, IA, MA, NJ, NM, NY, OH, OR, RI, WA
11 states offer comprehensive dental
CA, CT, IA, MA, NJ, NM, NY, OH, OR, RI, WA
No adult dental benefits
DE, AZ, ND
No adult dental benefits
DE, AZ, ND
September 30, 2015
Source: http://www.chcs.org/media/Adult-Oral-Health-Fact-Sheet-_070615.pdf
Dental Coverage by State for Medicaid Expansion Populations
9/24/2015
15
29
Concerns and Considerations
Access Issues
A limited % of dentists nationwide accept Medicaid– Administrative requirements
– Missed appointments
– Long payment wait times
– Low reimbursement rates
In most states that cover adult Medicaid dental
services, Medicaid reimbursement rates are less
than half of commercial reimbursement rates
Both Medicaid expansion and low cost
exchange products have exacerbated
access issues
September 30, 2015
30
Concerns and Considerations
More Recent Access Solutions
– Several states are initiating or investigating the use of mid-level providers, such as Registered Dental Practitioners or Dental Therapists, to provide preventive and routine care under the direction of a dentist (Minnesota, Alaska, Maine and being considered in 15 additional states)1
– Colorado has proposed paying dentists a $1,000 bonus for taking five new Medicaid clients and seeing them at least twice per year. They have not received approval from the federal government for matching funds yet. 2
September 30, 2015
1: http://www.pewtrusts.org/en/about/news-room/news/2015/02/06/washington-state-legislators-support-dental-therapists2: http://www.usatoday.com/story/news/2015/02/15/medicaid-patients-struggle-to-get-dental-care/23315811/
9/24/2015
16
31
Concerns and Considerations
At Budget Time
Adult dental becomes a frequent target because it is one of the few Medicaid benefits that are optional
Dental benefits for expansion populations may be even more at risk as states attempt to balance the bottom line
With the federal cost share for the expansion population decreasing from 100% to 90%, the increasing state cost share drives automatic year over year expenditure growth that must be met by budget increases or benefit decreases
Based upon a very simple model, I have estimated expansion states will see an additional 1% to 3% increase or more in state expenditures for 2017 before any other cost factors
September 30, 2015
Modeling assumptions: Annual premium for average Medicaid enrollee $6,500; Annual premium for average Medicaid expansion enrollee $5,000 -$6,500; enrollment expansion 10% - 30%; FMAP 50%
32
Questions?
(860) 687-0104
(317) 524-3520
September 30, 2015
9/24/2015
17
33
Caveats and LimitationsWe, Joanne Fontana and Teresa Wilder, are Consulting Actuaries for Milliman. We are members of theAmerican Academy of Actuaries and meet the Qualification Standards of the American Academy ofActuaries to render the actuarial opinion contained herein.
Milliman has prepared this presentation for the specific purpose of providing commentary on the impactof the Affordable Care Act on the dental benefits industry. This information may not be appropriate, andshould not be used, for any other purpose. This presentation has been prepared solely for the internalbusiness use of, and is only to be relied upon by, the management of NADP. No portion of thispresentation may be provided to any other party without Milliman's prior written consent. Milliman doesnot intend to benefit or create a legal duty to any third party recipient of its work even if we permit thedistribution of our work product to such third party.
Milliman does not provide legal advice, and recommends that NADP consult with its legal advisorsregarding legal matters.
September 30, 2015
Take the Session Evaluation
nadpconverge.org/eval2015