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The Affordable Care Act (ACA) requires tax credits, also known as premium assistance, to be available for lower income individuals purchasing health coverage on individual Marketplaces. The assistance can be used to pay premiums for a consumer’s health benefits—both medical and pediatric dental. While pediatric dental can be embedded within medical coverage, the (ACA) provides for pediatric dental coverage to be offered separately from medical to parallel today’s insurance market where 99% of dental coverage is separate from medical coverage.
In most cases, the IRS calculates a consumer’s tax credit to the cost of a “benchmark” plan—defined as the second-lowest cost silver plan in a specific region. Due to IRS definitions of the “benchmark plan,” if the second-lowest cost silver plan does not include pediatric dental, the federal tax credit families receive will not include any subsidies for pediatric dental coverage whether purchased as part of a medical plan or separately. When the benchmark silver plan includes pediatric dental, the federal tax credit families receive includes the value of pediatric dental whether or not pediatric dental is purchased by those families as part of their medical coverage or separately.
To determine where families are not receiving the value of pediatric dental in their federal tax credits, NADP analyzed all 50 states and the District of Columbia to determine whether the benchmark plan in the largest and smallest population centers of each state includes pediatric dental. This map is a summary of that analysis. The largest and smallest population centers were selected for the analysis as they represent urban and rural populations of an entire state. Based on the sample and information released by the FFM we have determined that:
- the largest population county or zip code in 37 states will not receive tax credits for pediatric dental coverage under current IRS rules,
- 79% of the uninsured population in the 33 FFM states (all counties) will not receive tax credits for pediatric dental coverage, and
- The value of lost subsidies for the families that insured children in the 0-17 age group on FFM exchanges through April 19 is $93.6 million impacting an estimated 366,616 low income children. If the same assumptions are applied to the 130,906 children that obtained coverage through State Based Marketplaces (SBM), families in SBM states are missing an additional $28.5 million in subsidies for 2014.
If the IRS does not amend its rule on the calculation of tax credits to include the value of separate pediatric dental benefits when the second-lowest cost silver plan does not include pediatric dental, federal tax credits will be unfairly distributed among the states in 2014 and future years. Without premium tax credits that can assist with the purchase of stand-alone dental policies, many families may forgo pediatric dental coverage and critical oral health care for their children.
NADP analyzed all 50 states and the District of Columbia to determine whether the benchmark plan in the largest and smallest population centers of each state includes pediatric dental. This map is a summary of that analysis. The largest and smallest population centers were selected for the analysis as they represent urban and rural populations of an entire state. To determine the benchmark plan to examine in each sample county, we browsed Exchange websites and offerings, using a single, 30-year old adult with one child as the family composition across all states. For Federally-Facilitated Marketplaces (FFM), this information was also confirmed using information regarding plan offerings and premiums made available by HHS.
Clicking on each state in the above map can return various data from our analysis as several methods were used to collect the information in this chart. The methods varied by state based on the level of available information. In all states, NADP obtained information on plan offerings in the largest and smallest county based on a standard consumer profile.
- In the states that have their own “exchange” or “marketplace,” NADP was only able to obtain information from the two sample counties. The largest county was used as representative of urban areas and the smallest county was used to be representative of rural areas.
- In a few of the state-based Marketplaces (SBM), other public information on Exchange operations and plan offerings was used to supplement the sample county data. These few cases are noted in the above map’s state reports when clicked.
- In the states where the “exchange” or “marketplace” is operated by the federal government, detailed data tables and census data together allowed NADP to determine the percentage of the population residing in areas where pediatric dental was part of the benchmark plan used to calculate subsidies.
When pediatric dental is embedded in a medical plan, it is part of the benchmark used for subsidy calculations and our findings are stated as “pediatric dental benefits are included in the subsidy calculation.” When pediatric dental is not a part of the medical plan used as the benchmark, our findings are stated as “pediatric dental is not included in the subsidy calculation,” or “those purchasing coverage on the individual Exchange will not receive premium tax credits for pediatric dental benefits.”
To learn more about the calculation of premium tax credits, please review Issue Briefs and letters from Senators and advocacy organizations urging IRS to include dental benefits in the calculation of ACA Premium Tax Credits:
U.S. Senators Letter to Department of the Treasury: |
Requesting the Cost of Stand-alone Dental Benefits be Included in the Calculation of ACA Premium Tax Credits
Coalition Letter to Department of Treasury: |
Regarding the Impact of Missing Premium Assistance for Pediatric Dental Benefits in 2014
U.S. Senators Letter to Department of the Treasury: |
Requesting the Cost
of Stand-alone Dental Benefits be Included in the Calculation of ACA
Premium Tax Credits
NADP, ADA, CDHP, DDPA Letter and Legal Memo to U.S. Department of the
Requesting the Cost of Stand-alone Dental Benefits be Included
in the Calculation of ACA Premium Tax Credits
NADP Issue Brief: |
Dental Benefits and Consumer Tax Credits within the ACA
|| Joint Letter to the U.S. Department of the Treasury: |
Requesting that the
Cost of Stand-alone Dental Benefits be Included in the Calculation of
ACA Premium Tax Credits
For more information, please contact NADP at 972.458.6998 or firstname.lastname@example.org.
*Estimates of the percentage of the population that would not have access to subsidies for children’s dental benefits was calculated by identifying for each county whether the second lowest silver plan included a children’s dental benefit or if a separate stand alone dental plan purchase was necessary. To most closely approximate the demographics of those purchasing benefits on the exchange, we used the uninsured population, as reported in the U.S. Census Bureau’s Small Area Health Insurance Estimates, to calculate the percentage of exchange enrollees denied access to the premium tax credit.
**The New York State of Health insurance marketplace does not offer online browsing without personal identification and resident information, so data was pulled from counties where NADP was able to provide such information. Kings County is largest county (i.e. the Bronx) in New York. Data was pulled for Manhattan and Albany.