Tag Archives: Joanne Fontana

How might healthcare reform 2.0 affect dental care benefits?

The Patient Protection and Affordable Care Act (ACA) made pediatric dental care an essential health benefit that issuers must offer on state exchanges. If proposed changes to the ACA are enacted, the dental benefits industry must again determine how to proceed in an evolving landscape. In this paper, Milliman’s Joanne Fontana discusses several key components of the ACA that, if amended or removed, would affect dental benefits. She also provides considerations for dental insurers that can turn another potential round of reform into opportunity.

More access to pediatric dental care could increase health exchange premiums

Starting in 2014, the Patient Protection and Affordable Care Act (PPACA) will provide children greater access to dental care. Pediatric dental care is among the essential health benefits that new health plans must cover within health exchanges as well as individual and small-group plans under the law.

Citing Milliman research, this Washington Post article discusses out-of-pocket maximums associated with these new health plans that make dental benefits richer. Out-of-pocket maximums would curb the cost families incur for expensive dental services compared to annual or lifetime limits.

Here is an excerpt:

Evelyn Ireland, executive director of the National Association of Dental Plans, says families who need expensive dental care such as braces may fare better in dental plans sold on the exchanges than in the plans many employers currently offer.

Nationwide, medically necessary orthodontia costs roughly $6,500 per person, Ireland says. Currently, if a private dental plan covers orthodontia, the benefit typically covers 50 percent of the cost, up to a lifetime limit of $1,000 or $1,500. “So it ends up basically being a down payment,” she says.

Assuming braces are a covered benefit, the family of a child with dental coverage through an exchange might have to pay the maximum out-of-pocket limit – $1,000, perhaps – and owe nothing more that year for the child’s dental care. But any other expenses would be covered, since plans can’t have dollar limits on coverage.

That unlimited coverage will probably add to the premium for pediatric dental coverage, however.

Ireland’s group asked the benefits consultant firm Milliman to estimate how much pediatric dental premiums might change if the coverage provisions of the law were incorporated.

Milliman estimated that premiums currently range from $21 to $25 per child per month, depending on whether a plan covers orthodontia services, among other things. After incorporating the health law’s requirements, Milliman projected that premiums would probably rise to $34 a month, Ireland says.

“That’s a nine-dollar-to-13-dollar-a-month jump, which is a pretty significant increase for a family,” she says.

For more perspective on the effect healthcare reform may have on dental insurance, read Joanne Fontana’s paper entitled “Healthcare reform: What about dental?

How will healthcare reform affect dental coverage?

The dental insurance landscape will change in the coming years because of new healthcare regulations. In this article, Milliman’s Joanne Fontana offers perspective on how healthcare reform will affect adult and pediatric dental coverage. Here is an excerpt:

An essential health benefit under the Affordable Care Act, pediatric dental plans will be sold in insurance exchanges, both packaged with adult plans and as stand-alone plans.

“It’s a very, very big shift from the way dental insurance is currently sold,” said Joanne Fontana, an actuary who tracks healthcare and health insurance for the actuarial and consulting firm Milliman. “For the first time, there’s a need for pediatric-only plans.”

State and federal governments still need to decide benefit levels and cost structures for stand-alone dental plans and medical-dental packages, in and outside of the exchanges, Fontana said. A lot of decision-making on exchanges has been left to the states, and a lot of states haven’t even decided if they want to create an exchange, or have worked out the details.

She also discussed the uncertainty associated with new guidelines on cost-sharing limits:

Another uncertainty comes from ACA rules on cost sharing limits for essential health benefits, Milliman’s Fontana said.

Hypothetically, if someone has a medical plan for themselves and his or her child, and has a separate dental plan for the child, somehow the two insurance companies have to co-administer cost sharing limits–a problem without easy solutions, Fontana said.

“If you’re going to administer that, you would have to have claims accumulators going on the medical side and claims accumulators on the dental side that would have to talk to each other,” Fontana said. “For that to happen in reality, it’s just not a pragmatic solution.”

For more information on the effect healthcare reform may have on dental insurance, read Fontana’s paper entitled “Healthcare reform: What about dental?

Healthcare reform: What about dental?

While many of the tenets of the Patient Protection and Affordable Care Act (PPACA) focus on medical insurance, its implementation will also have a major impact on how dental insurance is offered, what services are covered, and the cost of dental coverage.

The inclusion of “pediatric services, including oral and vision care” as a required coverage in the essential health benefit (EHB) package creates an interweaving of medical and oral health services rarely seen prior to healthcare reform, causing new complexities in selling and administering dental insurance.

As the PPACA is implemented, it will be critical to consider the inclusion of dental insurance thoughtfully in order to prevent unintended consequences to the dental insurance marketplace affecting insurers, consumers, and providers alike.

For more on this, read the new healthcare reform briefing paper.

GASB 45: Lessons learned for small employers

Joanne Fontana pens an article in Accounting Today looking at lessons learned after more than three years of providing GASB 45 valuations to small employers. Here is an excerpt capturing the difficulty of these smaller valuations:

We’ve learned that, while smaller government employers may have fewer OPEB [other post-employment benefit] plan members, their OPEB plans are by no means simple. In fact, we’ve seen significant variation in how employers using the AMM [Alternative Measurement Method, which is well-suited for small employers] handle contribution methods and levels toward retiree health premiums, eligibility requirements for OPEB, and the structures of the OPEB plans themselves. Some states provide funding toward retiree premiums in addition to those provided by the employer, which must be accounted for in the valuation. Others use age-banded rating for their OPEB premiums. Still others are required to use community-rated premiums.

All of these variations have implications on how to correctly calculate the OPEB liability, whether using the AMM or a traditional valuation. None are directly addressed in the GASB standard, but are nonetheless expected to be properly considered by the individual completing the valuation. So, again, it is imperative, even when using the AMM, to have someone who understands these complexities and can expand the basic AMM approach to appropriately calculate the liability.

Risk adjustment: Health calculus for the reform environment

Risk adjustment, a method for adjusting healthcare costs to reflect the health status of a given population, will take on new significance under healthcare reform. In order to harness the true potential of such a powerful tool, critical stakeholders like governmental agencies, health plans, provider organizations, and employer groups must understand how to properly select, implement, and evaluate risk-adjustment models. Using the appropriate risk-adjustment methodologies in the correct context will contribute to more accurate healthcare pricing, more efficient utilization, and improved quality of care.

A new healthcare reform briefing paper examines these considerations.