The Affordable Care Act-Some Implications for Dentistry
The Affordable Care Act is now a part of the landscape for individuals and businesses. In dentistry we face two aspects of the law. First: as small business owners, how will the law affect our responsibilities to our employees? Second: how will the law affect our patients?
Two aspects of the law have already been implemented, with other aspects not going into effect until 2014. In effect now are mandatory coverage of children with pre-existing conditions, and a prohibition on dropping these children over an arbitrary “cap” on lifetime benefits. Secondly, plans are required to cover adult children of subscribers up to age 26, even if that child does not live with the parents, or is married (spouse or children of the adult covered child may not go on his parent’s plan). Note: In 2014 plans will not be allowed to deny or exclude anyone, adult or child, or charge more for a pre-existing condition.
Large companies have always had more leverage when buying insurance for their employees because insurance carriers factor in disease risks for a bigger pool of subscribers. For small businesses, it has been shown that they currently pay around 18% more than large companies for the same health insurance policy. The ACA will hopefully change this. Here are a few highlights:
1. If you have up to 25 employees, pay average annual wages below $50,000 and provide health insurance, you may qualify right now for a small business tax credit of up to 35% to offset the cost of your company insurance.
2. A small business tax credit of up to 50% will be available in 2014 for many small employers. This will be available to small businesses that provide insurance today, as well as those who just begin to offer insurance.
3. By 2014, State and Federal Insurance Exchanges will be set up to provide information on qualified plans available to individuals and businesses. If a state declines to set up any Exchanges, the Federal Exchanges will be available to that state’s inhabitants.
4. Members of Congress will be getting their health care insurance through these Exchanges beginning in 2014, so our congress will be sharing the national experience.
5. No small business is required to provide insurance. There is no “employer mandate.”
While these changes may actually be helpful to many dentists who have always wished they were able to provide health insurance to their employees, one change will not be welcomed. Beginning in 2013, a 2.3% tax on all new medical and dental devices, which appears to include dental equipment, materials, and supplies purchased by the dentist, will be implemented. The IRS is expected to issue further post-election rules affecting this proposed tax. According to the ADA website, a taxable medical device is one approved by the FDA for human use. It is essentially a manufacturer’s excise tax and the manufacturer of the device is responsible for reporting and paying the tax. The proposed rule appears to apply to restorative materials, hand instruments, surgical instruments, and endodontic filling materials. It does not appear to apply to completed dental prosthetics, but the materials used to make the dental prosthetic will be subject to the tax. So this seems to indicate that a completed crown (coming from a lab or fabricated in the office), or denture may not be taxed, but the materials used to make the crown or denture such as alloys, acrylics and porcelains will be taxed. The ADA is working with Congress to repeal this portion of the bill so we need to stay tuned.
For our patients, beginning in 2014:
1. Vision and dental coverage for children will be included in all plans offered by an Exchange, and will be available to individuals or businesses.
2. A family of four making less than $88,000 without access to affordable coverage from a job, can apply for tax credits to help pay for insurance.
3. There appears to be a requirement that most Americans will be required to have dental coverage for their children, but it is uncertain what that dental coverage must look like.
4. According to the Agency for Healthcare Research and Quality, about 18% of children had no dental insurance in 2006. This would mean that about 13 million children did not have dental insurance at that time. It appears that in 2014 some children will be eligible under an expansion of Medicaid, or through the Children’s Health Insurance Program (CHIP). Others may obtain coverage through the Exchanges, because they will be required to offer it. Existing insurance plans may be “grandfathered” under the law, meaning they may not be required to offer dental coverage. However, these plans may be less popular if families are required to find plans to cover their children.
5. Expansion of Medicaid and CHIP may turn out to be of value to dental offices (if reimbursement is reasonable), or there may be problems as many offices do not currently accept these plans.
6. Adult dental plans may provide “basic” or “comprehensive” coverage, but it is not known how these plans will eventually affect current subscribers.
In the coming months we will be seeing the impact of the ACA on our practices, our employees, and ourselves. Currently, there are many confusing sources of information and many conflicting views of what all this will mean. It is hoped that the ADA will be successful in obtaining a repeal of the dental portion of the 2.3% medical and dental device tax, as this would have a detrimental effect on dental practices and would likely lead to increases in dental fees around the nation. While more people being able to obtain dental coverage would be a definite positive, the true results remain to be firstname.lastname@example.org.
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