THE AFFORDABLE CARE ACT AND YOU

The Patient Protection and Affordable Care Act (ACA) was signed into law on March 23, 2010, and since that time many elements of the legislation have been implemented. You may not know that broad and far-reaching changes will be made when the ACA is fully implemented. More “little known regulations” are becoming a part of our lives.

The ACA has implications for dentists as oral health care providers, small business owners, and consumers of health care. Many of the regulations contained within the voluminous legislation have yet to be determined. However, there are several changes that are likely to occur. Specifically, there are changes intended to increase access to dental coverage for children who get health coverage in the individual and small group health insurance markets, including those who will be covered through the new health insurance exchanges. However, the ACA does not address coverage for adult dental benefits.

•  Potential Impacts on Dentists as Health Care Consumers
In the individual and small group market insurers cannot impose pre-existing condition limitations, excessive waiting periods, and co-payments or deductibles for defined preventive services. In addition, plans are prohibited from rescinding coverage and must also be guaranteed issue and provide for guaranteed renewability. However, plans can use age, geographic location, tobacco use, and family composition to calculate premiums.

Your medical plan is facing a new, $63-per-person annual fee to cushion the initial cost of covering people with pre-existing conditions starting in 2014. The Obama administration says it is a temporary assessment levied for three years starting in 2014, designed to raise $25 billion. It starts at $63 per year and then declines. Under the law, insurers will be forbidden from turning away the sick as of January 1, 2014.

This fee is part of a bigger package of taxes and fees to finance the expansion of coverage to the uninsured, which comes to about $700 billion over 10 years, and includes higher Medicare taxes effective January 2013, on individuals making more than $200,000 per year or couples making more than $250,000. People above those threshold amounts also face an additional 3.8 percent tax on their investment income.

• Potential Impacts on Medicaid
Prior to the Supreme Court’s decision last summer, the ACA would have increased the number of Medicaid-eligible adults who received dental coverage. However, the Court ruled that the ACA provides for the optional expansion of Medicaid to cover people with incomes below 133 percent of the Federal Poverty Level. The federal government picks up 100 percent of the cost to cover this additional population for three years and 90 percent of the cost long term. At this time, Georgia’s Governor Nathan Deal has no plans to expand Medicaid in our state.

• Potential Impacts on Health Care Delivery and Financing
The ACA also provides for more effective integration of patient care and coordinating health care delivery and financing through Accountable Care Organizations (ACOs). To date these programs have been primarily to the Medicare population. ACOs create financial incentives for health care providers to work together to treat a patient across health care settings and to shift reimbursement from volume of services to health outcomes and quality. According to the American Dental Association, there are very few ACO-type models of care that include dental services, except for a proposed Medicaid pilot program in Oregon. However, the ADA has taken the lead in developing the Dental Quality Alliance to make sure that dentistry’s interests are adequately addressed.

• Potential Impacts on Health Insurance Exchanges
One of the key components of the ACA is the Health Insurance Exchanges, which must be in place in time to begin enrolling beneficiaries by October 2013. Initially, the exchange will be available to individuals and small businesses only allowing the purchasers to select from various private health care plans. Under the ACA, people with incomes between 100-400 percent of the Federal Poverty Level are eligible to receive federally subsidized coverage through the Exchange. States may set up their own Exchange or utilize the Federal Exchange, which is the option chosen by Georgia.

The individual mandate to obtain health insurance coverage was upheld by the Supreme Court. Beginning in 2014, a minimum set of benefits known as Essential Health Benefits (EHBs) will be available for those who buy coverage in the individual and small group markets. The law includes pediatric dental care in a list of essential health benefits to be provided by small and individual group health plans, but dental care for adults is not included in that essential benefit package.

Stand-alone dental plans must offer the pediatric essential oral health benefit without annual and lifetime limits. Stand-alone dental plans will also likely have to meet certain marketing requirements, ensure a sufficient choice of providers, and perhaps meet performance quality measures. They may be required to use a single enrollment form and a standard format for presenting health benefits plan options.

Some analysts believe the language allowing stand-alone plans to compete creates an unintended loophole that negates the clear mandate for families with children to purchase the EHB pediatric dental benefit in the exchange if the children do not otherwise have dental coverage. This conclusion is based on the disconnection between the “minimum essential coverage” requirement placed on individuals (known as the “individual mandate”) and the requirement placed on individual and small group plans (both inside and outside the exchange) to meet the “qualified health plan” (QHP) standard. To meet the individual mandate requirement, the individual need only purchase minimum essential coverage, which as defined in the Internal Revenue Code does not include excepted benefits such as dental benefit plans. However, the QHP standard requires all individual and small group plans (both inside and outside the exchange) to offer the total EHB package, including the pediatric oral benefit. The one exception is that medical plans in the exchange do not have to offer the EHB pediatric oral benefit if a separate dental benefit plan option is available, and the medical plan will still be deemed a QHP.

The ADA and the AAPD believe the clear intent of Congress is to require the purchase of the entire EHB package, including the pediatric oral health benefit. The ADA and the AAPD sent a letter to Health and Human Services strongly urging the agency to direct officials (federal or state) setting up an exchange to require families with children to verify that they have the children’s EHB dental coverage before they can finalize the QHP purchase in the exchange.

The ADA estimates that 3 million children will gain dental benefits through the health insurance exchanges by 2018, or roughly a five percent increase over the current number of children with private dental benefits.

• Potential Impacts on Dentists As Employers
The ACA does not require small businesses with 50 or fewer employees to provide health insurance. According to the American Dental Association, more than 99 percent of dental practices have 50 or fewer employees. Small business employers who pay at least 50 percent of the premium for employee coverage may qualify for a small business tax credit. To qualify the employer must have fewer than 25 full-time equivalent employees whose average annual wage does not exceed $50,000 per employee. The tax credits, which disappear after 2016, will be available on a sliding scale to assist the purchase of health insurance.

• Potential Impacts Taxes and Limits on Tax Preferred Accounts
The ACA imposes a few new taxes to assist in financing the various programs within health care reform. The tax receiving the most ink in the dental world is the medical and dental devices tax that became effective on January 1, 2013.  While dentists will not be responsible for assessing, collecting or paying the tax, they can expect some modest increase in the cost of materials and finished dental devices as manufacturers adjust their prices to accommodate the tax. The ADA along with a coalition of 11 organizations has worked diligently to repeal this tax but their efforts have been unsuccessful so far. Be alert in reviewing manufacturer and vendor price lists and invoices with respect to this tax.

Beginning January 1, 2013, there will be an increase to the Medicare Part A (Hospital Insurance) tax rate by 0.9 percent on individual taxpayers earning more than $200,000 and married couples filing jointly earning more than $250,000. The tax rate is currently 1.45 percent and will be increased to 2.35 percent. The tax applies to wages received with respect to employment. Additionally, if you have certain types of investment or passive income, this income may be subject to a new Medicare Surtax of 3.8 percent if you have modified adjusted gross income that exceeds $200,000 for single and $250,000 for joint filers. Investment income includes rents, dividends, interest, royalties and capital gains on property sales (with a partial exclusion for primary residence sales).

Flexible spending accounts (FSAs) allow employees to set aside tax-free money to pay medical and dental bills. Starting in 2013, the FSA set-aside will be limited to $2,500 a year and increased annually by a cost-of-living adjustment.

• Potential Impacts on Public Health Infrastructure
ACA provisions consistent with Association policy include:

• increased funding for public health infrastructure, including Centers for Disease Control and Prevention oral health programs and national oral health surveillance programs;
• additional funding for school-based health center facilities;
• increased grant opportunities for general, pediatric or public health dentists;
• funding for National Health Service Corps loan repayment programs;
• CDC initiation, in consultation with professional oral health organizations, of a five-year national public education campaign focused on oral health prevention and education.

Many of these new programs have not been funded. The ACA also authorizes federal spending to support a state alternative provider demonstration project, which is inconsistent with Association policy. Money has not been appropriated by Congress to support the development of these alternative provider demonstration projects.

The primary source for the information contained in this article is the American Dental Association. Member dentists may read more extensive information about the ACA on www.ada.org.