In an outcome that defied many polls and predictions, the Democratic Party gained control of the Senate in the 2020 United States elections, while winning the White House and keeping control (just barely) of the House of Representatives.
While the election results were surprising, what’s not a surprise is that this “clean sweep” may have an impact on dentists and the dental industry. Here are some potential outcomes that may affect you.
The Affordable Care Act (ACA) and the health insurance marketplace (exchange) system will be preserved and expanded
President Joe Biden’s administration has made restoring the ACA an immediate priority, and many of the cuts and restrictions imposed by the administration of former President Donald Trump are being reversed.
This is a positive development for dentists, said Jeff Album, Vice President of Public & Government Affairs for Delta Dental.
“Any news that’s good for the ACA and the exchanges is good for dentists,” Album said. “This market attracts people who wouldn’t otherwise get insurance through work, and increases in subsidies also help draw people into coverage. People with coverage are almost twice as likely to see the dentist as people without coverage.”
Among the ACA-related actions that are either underway or soon to happen under this administration:
A special enrollment period to increase exchange enrollment is officially underway
President Biden signed an executive order to create a special enrollment period from February 15, 2021 through May 15, 2021, during which eligible people can enroll in coverage from the federal health insurance marketplace. Uninsured residents in the 36 states that use the federal exchange system, including those who lost coverage because of the pandemic, can look for plans.
States with their own marketplaces are also creating special enrollment periods, although the time frames and eligibility requirements may differ.
The Centers for Medicare & Medicaid Services (CMS) has earmarked $50 million for outreach and education during the enrollment period.
The ACA’s Navigator Program will return
Reversing the prior administration’s move to defund this program, CMS will now provide about $2.3 million to help people find coverage on the federal exchanges, a process that can be confusing. The money will fund 30 Navigator Programs in 28 states. This, Album said, should help bolster dental enrollment.
“Several studies suggests that consumers are completely unaware of marketplace open enrollment dates, including the special enrollment periods,” Album said. “We believe this type of outreach will definitely help promote adult dental voluntary enrollment.”
Subsidies for exchanges will increase
The Biden administration included increases to ACA subsidies in its COVID-19 relief package. Consumers with household income more than 400% the federal poverty threshold will receive federal assistance to ensure that no more than 8.5% of their income goes toward a plan.
“The subsidies are getting better and the Biden administration is trying to bring more people into the exchanges,” Album said. “A great many small business and individuals impacted by the economy and COVID will now have an opportunity to get exchange-based dental coverage.”
Waivers that allow states to circumvent exchanges may be eliminated
Section 1332 of the ACA permits states to apply for a waiver to pursue “innovative strategies” to provide their residents with access to affordable health insurance, so long as they retain the basic protections of the ACA.
However, in 2020, the state of Georgia used the 1332 waiver to effectively eliminate its exchange program and force Georgia residents to purchase plans from private insurers without any kind of centralized platform. As a result, President Biden directed federal agencies to reexamine all waiver policies, including 1332.
“I think this administration is going to be tougher than the former one when it comes to deviating from the ACA’s framework,” Album said. “We’re not likely to see any other states attempt a direct enrollment alternative to centralized state-based exchanges or the federally facilitated exchange.”
Medicaid eligibility under the ACA may expand
The COVID-19 relief package recently passed by the U.S. House of Representatives included incentives to encourage states to expand Medicaid eligibility under the ACA. States that choose to expand would receive a 5% increase in Federal Medical Assistance Percentage (FMAP) payments to current Medicaid enrollees.
“The FMAP increases are important because that’s what allows states to do optional benefits like adult dental,” Album said. “Here in California, the adult dental Medicaid program was going to be in trouble if the state didn’t receive more financial assistance. It now looks very likely that Congress will pass some FMAP increase in the near future.”
A “public option” with a dental benefit could be created — but probably won’t
A public option would be a federal health insurance program offered on states’ exchanges as an alternative to private plans. It would probably be subsidized for lower income Americans and at least partially paid for by enrollees who don’t qualify for subsidies.
While dental coverage wouldn’t be a guaranteed benefit for anyone other than children, it could be made available on a voluntary basis.
Initially, it seemed as though a clean sweep by the Democrats would almost guarantee a public option. Candidate Biden repeatedly said he supported it during his 2020 campaign. And California Attorney General Xavier Becerra, Biden’s pick for Secretary of the U.S. Department of Health and Human Services and a long-time proponent single payer healthcare, said during a recent Senate hearing that he would support Biden’s efforts to do so.
However, the Democratic sweep in the 2020 election might not be enough to push this through. Despite their control of the Senate, the Democratic majority depends on the tie-breaking vote of Vice President Kamala Harris. Furthermore, the Democratic majority in the House narrowed significantly.
“Given the Democrats’ razor-thin majority in both the Senate and the House, and Republican opposition to the concept, a public option currently seems unlikely,” Album said. “I don’t see it happening.”
Leaving the ACA, here are a few other possible issues to consider.
A dental benefit could be added to Medicare
Democrats in the House and Senate have introduced bills to add dental under Medicare Part B. However, as introduced these bills don’t specify which benefits should be added, and neither the House nor the Senate is likely to take these bills up in earnest until the latter half of the year.
There may be changes to tax laws that dentists should be aware of
Biden’s tax plan includes proposals to raise taxes on corporations and people who earn more than $400,000 per year. These are some changes that could affect dentists:
- The tax rate on incomes above $400,000 would increase to 39.6% from 37%.
- The Section 199A 20% deduction for practice and real estate profits would be repealed for people whose taxable income exceeds $400,000.
- Your payroll taxes might increase because a 12.4% Social Security payroll tax, split between you and your employees, would be imposed on earned income that exceeds $400,000.
- If you plan to sell your practice, be aware that the tax rate on capital gains and dividends would increase to 39.6% (not including the 3.8% Affordable Care Act tax levied on gains) from a maximum of 20% if your taxable income exceeds $1 million.
- The estate tax exemption would be reduced to $5 million from $11,580,000, and the estate tax rate would increase to 45% from 40%.
As with any new administration, there are more questions than answers at this point, and how — or if — some of these proposed changes will be implemented is uncertain. What is certain, however, is that we can expect more proposals and policy updates that will affect dentists in the upcoming months. Be sure to refer back to FYI for news and updates as they become available.