Last week, the Internal Revenue Service (IRS) proposed a new rule to change the way tax credits are calculated for families who purchase coverage for their children from the new health insurance marketplaces. Under the proposed rule, the IRS would consider the cost of standalone dental coverage in its calculation of the tax credit, making pediatric dental coverage more affordable to families who rely on marketplace coverage across the United States.
Apex360 interviewed Colin Reusch, senior policy analyst for the Children's Dental Health Project, to learn more about the proposed rule and its anticipated effects on access to pediatric dental care.
Can you provide some background on access to pediatric dental care under the Affordable Care Act (ACA)?
The ACA named dental services for children (0-18) as one of its "essential health benefits" that must be offered in the new health insurance marketplaces and in the existing individual and small-group insurance markets. This has led some people to assume that the law means every single family that buys a health plan for kids in the marketplaces is automatically getting pediatric dental coverage, too, but this is a false assumption.
In fact, in most state and federally managed marketplaces, pediatric dental coverage can still be sold as a separate product through standalone dental plans. In many cases, parents need to purchase standalone dental coverage because the health coverage they bought doesn't have dental services embedded. This isn't necessarily a bad thing, but it has created some complications for families purchasing coverage in the new marketplaces.
One complication is the fact that families purchasing their children's health and dental coverage separately must pay an additional premium for that dental plan, but due to current IRS policy, they typically do not receive any additional tax credit to help them with this added cost.
Because the ACA itself does not require families to purchase pediatric dental coverage when it is not included in the health plan, the lack of any additional tax credit doesn't exactly motivate parents to purchase dental plans for their children.
Can you describe the IRS's proposed rule change and explain how it could affect access to children's dental care?
In a nutshell, the IRS is proposing for the first time to consider the cost of standalone dental plans in their calculation of the premium tax credit that qualifying families receive when purchasing coverage in the marketplaces. So a family who purchases a health plan that does not include dental coverage for the children can select a standalone dental plan, and their tax credit amount will be based on the cost of both health and dental coverage options available to them.
The IRS calculation is, of course, a bit more complex, but the bottom line is that starting in 2019, families would be able to get the full tax credit amount that the ACA originally intended for them to receive.
Tell us about the Children's Dental Health Project's (CDHP's) advocacy efforts to encourage this change.
CDHP has been working on this issue for well over three years. We've partnered with other children's health advocates, as well as the American Dental Association and organizations that represent the dental insurance industry, such as the National Association of Dental Plans. We have met with the US Department of the Treasury and the Department of Health and Human Services (HHS) officials on multiple occasions to explain that the IRS interpretation of the law was incorrect, creating a disincentive for families to purchase dental coverage for their children. Together, we have written numerous memos, blog posts, and policy documents aimed at convincing the Administration to reconsider how they calculate premium tax credits with respect to standalone dental plans.
Can you comment on any other barriers to pediatric dental care under the Affordable Care Act that remain to be resolved?
Sure. One of the more seamless approaches to ensuring that all children who rely on the marketplaces have adequate dental coverage is to provide it as part of the health plan. However, sometimes the result is a dental benefit that families aren't able to use because of high medical deductibles.
States including Connecticut and California—and the District of Columbia—have addressed this by establishing standard plan designs that embed pediatric dental benefits into health plans while either exempting them from these deductibles or creating a small, separate deductible that's easier for families to meet. We would love to see this approach applied on a broader scale. The HHS could take the lead by setting such standards in all of the federally facilitated marketplaces.
Another major barrier from our perspective is the lack of data made available. Unfortunately, HHS has not been especially forthcoming with marketplace enrollment data, and the reports they have released do not tell us how many children are enrolled in health plans that include dental coverage or how many are enrolled in standalone dental plans. So at this point, we really don't know how many kids have benefited from the inclusion of dental coverage as an essential health benefit.
Is there anything else you'd like to add?
CDHP is always glad to be able to work with a broad array of partners, and we consider it a huge victory when we can achieve policy change that benefits everyone.
Where can our readers get more information?
Our blog is probably the best place to read about the policy issues we track: cdhp.org/blog.