Dental ACA Update: Exchanges and Medicaid Expansion Joanne Fontana and Teresa Wilder Milliman, Inc. 3:15-4:15 PM DOWNLOAD THE CONVERGE EVENT APP Search NADP CONVERGE or go to tinyurl.com/nadpcon15 1
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 3 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 Pre-ACA ACA Group Coverage Family Coverage Separate from Medical Individual Coverage Pediatric and Adult Coverage Separate or Embedded 4 2
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 5 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 6 3
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 7 Pediatric Dental EHB Product/Pricing Pre-ACA ACA 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 8 4
Pediatric Dental Actuarial Value Standalone Dental Plan 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 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 9 Pediatric Dental OOP Maximum Standalone Dental Plan Embedded in Medical Plan $350/$700 OOPM for 2016 Pediatric dental subject to overall plan OOPM ($6,600/$13,200) After OOPM achieved, plan pays 100% of dental cost for remainder of year Example: child needing orthodontic treatment costing $3,000 10 5
Enrollment Statistics (March 2015) 1.4M SADP selections in the 37 states using healthcare.gov 25K SADP selections in 14 SBMs Age breakdown for healthcare.gov states: SADP Selections by Age % of SADP % of QHP Age Total 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. 11 Standalone v. Embedded Dental EHB Actuarial Value OOP Max Price Point and Benefits Admin Costs Adverse Selection 12 6
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 13 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: 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 4.7% Services 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. 14 7
SADP versus Embedded EHB Embedded more likely than SA to offer first dollar coverage for preventive dental services Standalone plan characteristics: 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% 75.7% of embedded plans offer first dollar preventive dental compared to 43.9% of standalone plans Source: More Dental Benefits Options in 2015 Health Insurance Marketplaces. ADA Health Policy Institute, February 2015. 15 SADP versus Embedded EHB Less expensive to purchase pediatric dental coverage via embedded plan 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. 16 8
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 17 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 Source: More Dental Benefits Options in 2015 Health Insurance Marketplaces. ADA Health Policy Institute, February 2015. Why? 18 9
Medicaid Dental Landscape Children / CHIP Mandatory Comprehensive Benefit Dental Coverage by Medicaid Population 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 Source: http://www.chcs.org/media/adult-oral-health-fact-sheet-_070615.pdf 19 Medicaid Dental Landscape Medicaid Adult Dental Benefits Emergency Only Relief of pain under defined emergency situations (e.g., uncontrolled bleeding, traumatic injury, etc.) Limited Fewer 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 Comprehensive A 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 Source: http://www.chcs.org/media/adult-oral-health-fact-sheet-_070615.pdf 20 10
Medicaid Dental Landscape Dental Coverage by State for Traditional Adult Medicaid Population 15 states cover emergency dental only FL, GA, HI, ME, MD, MS, MO, MT, NV, NH, OK, TX, UT, WV, ID 17 states cover limited dental benefits AR, CO, DC, IL, IN, KS, KY, LA, MI, MN, NE, PA, SC, SD, VT, VA, WY 15 states offer comprehensive dental AK, CA, CT, IA, MA, NJ, NM, NY, NC, ND, OH, OR, RI, WA, WI No adult dental benefits AL, AZ, DE, TN Source: http://www.chcs.org/media/adult-oral-health-fact-sheet-_070615.pdf 21 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 22 11
Medicaid Dental Landscape 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-statemedicaid-budget-survey-for-state-fiscal-years-2014-and-2015-report 23 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 24 12
Enrollment Observations Medicaid Expansion 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 25 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 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 26 13
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 27 Medicaid Expansion Dental Coverage by State for Medicaid Expansion Populations 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 11 states offer comprehensive dental CA, CT, IA, MA, NJ, NM, NY, OH, OR, RI, WA No adult dental benefits DE, AZ, ND Source: http://www.chcs.org/media/adult-oral-health-fact-sheet-_070615.pdf 28 14
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 29 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 1: http://www.pewtrusts.org/en/about/news-room/news/2015/02/06/washington-state-legislators-support-dental-therapists 2: http://www.usatoday.com/story/news/2015/02/15/medicaid-patients-struggle-to-get-dental-care/23315811/ 30 15
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 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% 31 Questions? Joanne.Fontana@Milliman.com (860) 687-0104 Teresa.Wilder@Milliman.com (317) 524-3520 32 16
Caveats and Limitations We, Joanne Fontana and Teresa Wilder, are Consulting Actuaries for Milliman. We are members of the American Academy of Actuaries and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. Milliman has prepared this presentation for the specific purpose of providing commentary on the impact of the Affordable Care Act on the dental benefits industry. This information may not be appropriate, and should not be used, for any other purpose. This presentation has been prepared solely for the internal business use of, and is only to be relied upon by, the management of NADP. No portion of this presentation may be provided to any other party without Milliman's prior written consent. Milliman does not intend to benefit or create a legal duty to any third party recipient of its work even if we permit the distribution of our work product to such third party. Milliman does not provide legal advice, and recommends that NADP consult with its legal advisors regarding legal matters. 33 Take the Session Evaluation nadpconverge.org/eval2015 17