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California Insurance Exchange Already Under Criticism

Jul 15, 2013

California announced in June the health and dental insurers that will be participating in Covered California, the state’s insurance exchange, but it didn't take long for groups from all sides to express their displeasure.

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Children’s oral health care is defined under the Affordable Care Act (ACA) as an “essential benefits package” that will be offered in state insurance exchanges, but it’s how Covered California will offer dental plans for children up to age 19 that has dismayed several groups. California is the first state to set up a health insurance marketplace so many states are following its progress with interest.  

Several groups were critical of the exchange’s decision to offer just one plan that combines medical and dental benefits of the six insurers represented. Health Net will offer medical and dental benefits, while Anthem Blue Cross, Blue Shield of California, Delta Dental,  Liberty Dental and Premier Access Dental will offer 9 standalone plans.

Three different product types are available, depending on the geographic area: dental health maintenance organizations (DHMOs), dental preferred provider organizations (DPPOs) and dental exclusive provider organizations (DEPOs).

Children’s groups believe this decision will result in higher costs and less dental care for those children most in need of it.  They believe that pediatric dental care should be no different than other essential health services for other age groups, such as the mammograms and prostate tests whose costs are blended into everyone’s premiums in the ACA. “That’s what drives affordability,” said Kathleen Hamilton of the Children’s Partnership, a coalition of child advocacy groups.

But State Assembly member Dan Logue said that older individuals should not have to help subsidize pediatric dental care. "If we continue to ask people to pay for health care for everybody, I think you're going to see the system collapse," he said.

The California Dental Association supports the state exchange, saying that selling separate pediatric dental care plans "offers the least disruption for families purchasing coverage for their children in the exchange and will allow parents to maintain their existing relationship with their dentist."

California State Insurance Commissioner Dave Jones disagrees and predicts an increase in consumer costs.  “What they’re doing is contrary to the law – and not in the best interests of children’s access to dental care,” he said. Jones also believes that Covered California is exceeding its authority by discouraging insurers from combining pediatric dental care with health care policies sold on the exchange or in similar plans on the private market.

Finally, Dana Howard, spokesperson for Covered California, said that the exchange cannot require insurers to include pediatric dental coverage in other health policies without the Legislature passing a mandate. He added that accepting some exchange policies with pediatric dental coverage and other policies without it would make it more difficult for consumers to compare plans.

Premiums for the standalone dental plans in California will range from less than $10 a month for a DHMO where available to about $30 per month for a DPPO.  Dental plans will come in two actuarial value options: 85 percent, which features higher premiums but lower average out-of-pocket costs; and a 70-percent value plan, with lower premiums and higher average out-of-pocket costs.

An estimated 5.3 million of California’s 38 million residents are expected to be eligible for coverage through Covered California. Of those, 2.6 million are expected to be eligible for subsidies to help cover costs.

Source: Wall Street Journal, Covered California News, Fresno Bee, Sacramento Bee, California Healthline

Copyright 2013, Bloom Insurance Agency, LLC

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