The Impact of the Affordable Care Act on the Dental Industry 10 Years Later

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The Launch of Affordable Healthcare Act (ACA)

It’s now been a full 10 years since the launch of the Affordable Care Act (ACA) insurance exchange, better known as the “marketplace.” The launch of the ACA exchange was when dental practice owners began to experience the full impact of the Affordable Care Act.

As you may remember, prior to the ACA, individuals or families that didn’t have health insurance through an employer would contact an insurance broker, submit an application, and receive an offer. The premium and coverage was usually determined by a medical underwriting process and the health of the applicant. Often, the coverage came with limitations or exclusions based on any pre-existing conditions.

The ACA changed this, eliminating medical underwriting and exclusions for pre-existing conditions with no possibility of rejection. In addition, the ACA changed the access and delivery method for health insurance, allowing individuals and families to receive standardized health care through the exchange or “marketplace” at a fair premium by offering subsidies or tax credits toward the premium based on individual or family income.

Impact on Dental Practices

For group dental practices, those with over 50 employees, compliance with the Act meant that they were required to offer health insurance to their employees. For many of these practices, it would be the first time they would do so. Compliance and administration would add complication and additional expense to the practice model.

For many small dental practice owners, the ACA limited the traditional health insurance options available. Prior to the ACA, it was uncommon for a small dental practice to offer group health insurance. Instead, the owner of the practice would carry individual or family coverage for themselves and their dependents. Employees of the practice generally carried insurance through a spouse or not at all. Post the implementation of ACA rules, the small practice owner was forced to choose between limited HMO coverage for themselves and their families or offer a group health insurance program through the practice to access the broader PPO options.

Whether you were a large or small practice, exercising the group health insurance option came with some significant compliance rules:

At least 75% of all eligible employees must enroll in coverage,
Employers are required to provide a minimum contribution of 50% to their employees, based on the lowest plan offered
Coverage must be offered to all eligible employees

Challenges Encountered

The group health insurance option was challenging because it was expensive to the practice owner, the affordable options available to offer employees provided very little recognized benefit, and many younger employees did not want to participate, compromising eligibility. Initially, there was some relaxation of these group coverage rules (for practices with less than 50 employees) allowing easier access to those securing group coverage for the first time, but all were expected to move toward compliance with these rules by the second year. So, for employers less apt to ultimately comply with the rules, traditional group coverage was only a temporary fix.

As time passed, it became apparent that the implementation of the Affordable Care Act caused pricing for traditional health insurance to increase. This, along with already limited traditional options, led to the creation of non-insurance health “insurance” options.

An example of this would be the Medi-Share options that began appearing. Medi-Share programs are typically affiliated with a religious organization that creates their own provider network and involve a “premium-sharing” method that disperses medical costs to all members enrolled. These programs were not health insurance in the traditional sense, were not compliant with ACA requirements and not subject to insurance regulation and oversight. Health benefit discount plans also began to emerge. These plans often paired access to telemedicine with prescription discount services and fixed pricing for other related basic health services. They were not subject to insurance regulation and oversight either.

New Health Insurance Opportunities for Dental Practices

For many members of the dental community, our clients included, no current option has provided a satisfactory answer to the health insurance question. Fortunately, as the ACA has stayed the test of time and looks to continue as the guiding legislation behind health insurance in our country, the insurance industry has started to become more creative.

True insurance options for dental practices of all sizes are starting to emerge. These plans combine limited health underwriting with care coordination/negotiation, tele-health, and payment terms attractive to doctors & hospitals. Changes like these can reduce the premium cost to the dental practices that qualify by up to 30% over traditional group health insurance plans. The team at Risk Strategies Dental Practice is incorporating these unique new plans into the options we are exploring for our clients.

The Affordable Care Act (ACA) continues to change the healthcare marketplace, the way we purchase and use our health insurance. We in the insurance industry continue to adapt to those changes, to create and adopt new, unique options while continuing to look for more and more creative solutions to serve our clients in the dental community.

Contact the team at Risk Strategies Dental Practice today
to learn more about the creative health insurance
solutions that we have to offer dental practices and DSOs.