Product: Buyer Beware: Understanding the implications of embedded versus standalone dental
By Anne Treankler, Director, Actuarial Services
There is considerable variation across states in how dental benefits are offered within health insurance marketplaces. Prior to passage of the Affordable Care Act, 98 percent of dental insurance was sold as standalone coverage.1 Embedding dental coverage into medical insurance was rarely considered an option.
Recognizing the importance of oral health, pediatric dental services became one of the ten Essential Health Benefits (EHB) that plans are required to cover. However, health plans sold through the Exchange are not required to include pediatric dental benefits as long as there are standalone dental plans available for purchase. Employer groups and individuals have two methods of obtaining pediatric dental coverage: through a standalone dental plan or embedded in the medical coverage.
The question is now being asked, “To embed or not to embed?” Delta Dental of Wisconsin believes the value proposition of standalone dental has not changed. In fact, additional reasons to purchase standalone dental have emerged. Embedded dental coverage in medical plans varies widely by carrier and plan, and to date, transparency of dental plan details has been limited. For example:
- Some plans require the full medical plan deductible to be satisfied before any dental benefits are paid.
- There is variance in member cost-sharing; some plans have coinsurances of 50% for all dental services while others may have a more “traditional” dental benefit structure.
- Not all dental networks are created equal. One plan may offer a very narrow network while another offers broad access to care.
- Embedded dental benefits typically only include pediatric coverage, leaving some family members without dental benefits. Standalone dental plans offer coverage to the entire family.
- Embedded dental benefits are not subject to separate actuarial value requirements. Because dental is a small cost relative to the medical cost, dental coverage doesn’t materially impact a medical plan’s actuarial value. This means that two medical plans at the same metal level tier could have very different dental benefits – one plan could have a very skinny dental benefit and the other plan could have a very rich dental benefit.
Standalone dental plans clearly identify deductibles, coinsurance levels, networks, and more. In Wisconsin, there is no requirement to purchase pediatric oral EHB as part of the medical plan. Your clients have the option to choose the dental plan that best meets the needs of the entire family.
1Source: National Association of Dental Plans (NADP)
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