J Dent Educ. 69(9): 1022-1031 2005
© 2005 American Dental Education Association
Financing and Reimbursement of Elders’ Oral Health Care: Lessons from the Present, Opportunities for the Future
Judith A. Jones, D.D.S., M.P.H., D.Sc.D.
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Abstract
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This article describes current financing and reimbursement for elders’ oral health care and presents innovative options and opportunities for the future. Current health and dental care financing data from the Centers for Medicare and Medicaid Services and Agency for Health Care Research and Quality are reviewed. Existing and potential reimbursement options for the future are presented. Options for future financing and reimbursement include extending dental insurance into retirement, inclusion of oral health care into existing comprehensive health care plans, developing retiree plans for selected, well-defined (by the sponsor) groups of retirees, prepaying dental care during employment, development of an Elders Health Insurance Program for the poor and near poor, and developing optional "Part D (for Dental)" plans within the Medicare program. Given the absence of universal oral health insurance, a mix of financing options and reimbursement schema will be required to cover the costs of oral health care and eliminate disparities in oral health access and outcomes for the growing elderly population.
More elders are using dental care than ever before.1–3 The graying of the 76 million strong baby boom generation will result in more elders than ever before, on both an absolute and percentage basis.4 Elders’ increases in use of dental care are likely to continue, yet important disparities in access to and outcomes of oral health care are evident.5–7 Further, there is variability in access and oral health status based on region, socioeconomic status, race, and ethnic diversity.8,9 Given the expected increases in racial and ethnic diversity and until poverty is eliminated, health professionals will be challenged to meet the oral health needs of elders. How can we best meet the growing need and demand for oral health care among elders? And who will pay for dental care among elderly baby boomers? The purpose of this article is to describe how dental services for U.S. elders are currently financed and reimbursed and to identify innovative options that will address one or more of the future challenges with these specific goals in mind:
- Eliminate disparities in access to and outcomes of oral health care in elders;
- Universal continuous access to care; and
- Primary care: treatment that goes beyond pain and infection and includes basic diagnostic, preventive, restorative, and periodontal services.
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Oral Health Disparities and Determinants of Health
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Health disparities in general, and disparities in access to and outcomes of oral health care in particular, are described in detail by Kressin and Gilbert.5,6 For the purposes of this discussion, the term "oral health disparities" refers to "diminished [oral] health status of population subgroups defined by demographic factors such as age, socioeconomic status, geography, disability status, and behavioral lifestyle. . . . None of these factors, singly or in combination, can explain why some people are healthy and some are not. Rather, there are at least four interdependent and interacting determinants of health, namely the unique biology of the individual, behavioral lifestyles, the environment, and the organization of health care."10 The complexity of these interactions is well described by several other articles in this issue.2,3,5,6 These provide the critical background for this discussion of current and future options for financing and reimbursing oral health care.
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Use of Dental Care
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A key indicator of oral health status is use of care. National data on use of dental care in the United States show that more elders are using dental care than ever before (Table 1
).9,11–15 Moreover, over the past five decades, elders have made the greatest increases in use of dental care of any age group. For example, in 1958–59, only 16 percent of persons over the age of sixty-five had used dental care in the past year.11 By 2002, data from the National Health Interview Survey (NHIS) show that 55 percent of persons age sixty-five and older used care in the last year.9 This represents over a three-fold (3.3 times) increase over forty-six years, an increase that is dramatically greater than the increase for forty-five to sixty-four year olds (two times) and people of all ages (less than two times).
Use of dental care is similarly affected by sociodemographic factors such as race, household income, education, and dental insurance coverage and dentition status. Figure 1 shows the impact of selected sociodemographic characteristics on use of care among elders in 2002.9 Specifically, elders who were black, Hispanic, poor or near poor, and from rural areas and the South were least likely to use care. Table 2 presents similar data from the Centers for Disease Control and Prevention (CDC)’s Behavioral Risk Factor Surveillance System (BRFSS) on the impact of selected sociodemographic factors on use of dental care in the United States in 1995. The BRFSS data show that persons who have higher levels of education and income consistently have higher use of dental care.8 This will have a profound impact on the demand for care since the graying baby boomers will be better educated and have higher disposable incomes,16 and thus will be more likely to demand dental care. In addition, people with teeth tend to use care three times more often (72.5 percent) than persons without teeth (24 percent). Because the baby boomers are more likely to keep their natural teeth than ever before,1,17 more elders than ever before will be seeking dental care. The current situation and opportunities for future financing of oral health care are presented below.
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Figure 1. Percent of persons 65+ with a dental visit in last year by selected characteristics, United States, 2002, NHIS
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Financing Oral Health Care: Current Situation
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A review of the costs and mechanisms of financing oral health care today will give us some ideas for directions to explore for the future. The term "financing" care refers to the mechanisms by which money enters the health care system to pay for the delivery of services by varying types of providers. This is different from reimbursement, which describes how providers are paid for their services.
The Center for Medicare and Medicaid Services (CMS) presents annual estimates of the cost of health care in America.18 National health expenditures in the United States in 2002 were more than $1.55 trillion. Of that, Americans spent $73 billion on oral health (dental) care. This amounts to 5.3 percent of every health care dollar, or $249 for every man, woman, and child in America. To put the 5.3 percent in perspective, Figure 2a depicts the relative magnitude of various health care expenditures in 2002. Thus, the 5.3 percent for dental services is less than the 12 percent for prescription costs, 10 percent for nursing home plus home health care, 36 percent for physician services, and 36 percent for hospital care.
The sources of the health care dollars spent are shown in Figures 2b to 2d.18 Each figure depicts the sources of health care dollars spent in 2002. Separate figures are presented for health care spending overall, physicians’ services, and dental services. As shown in Figure 2b, 36 percent of payments for health care overall come from private insurance, 19 percent from Medicare, 16 percent from out-of-pocket payments, 10 percent from Medicaid, 4 percent from other public funds, and 4 percent from other private sources. Physician and dental services are considerably different, as shown in Figures 2c and 2d. Private insurance covers half (49 percent) of physicians’ (Figure 2c) and dental services (Figure 2d). However, out-of-pocket payments are markedly different, comprising 10 percent of payments for physicians’ services compared with 44 percent of dental services. Medicare covers 20 percent of physicians’ services, but less than 1 percent of dental services, whereas Medicaid contributes 4 percent of physician services and 3 percent of dental services. Finally, other public and private sources total 3 percent and 7 percent, respectively for physicians and less than 1 percent for dental services. Thus, the financing for dental care in the United States is very different from that of medical care, both from health care financing as a whole and from our physician counterparts.
Current Public Financing of Oral Health Care: Medicaid and Medicare
General tax revenues are used for Medicaid (Title XIX of the Social Security Act), a federal-state partnership that provides health insurance for low-income pregnant women, families and children, and the aged, blind, and disabled. Because of this partnership status, dental benefits for adults and seniors vary from state to state. Of note is that Oral Health America19 surveyed all fifty states and gave grades for level (comprehensiveness) of Medicaid dental benefits; four states received a grade of "A" for providing full benefits to the eligible population, four had a grade of "B" for comprehensive but not full care, fifteen received a "C" for limited benefits, twenty received a "D" for emergency only benefits, and six received an "F" for no adult benefits. Overall, the grade of "D" was given. Thus, the existing Medicaid program infrequently provides basic care for the majority of elders it covers. Moreover, Medicaid reimbursement, when the state includes dental, is only available to poor elderly. Thus, because most elders are above the poverty threshold, even in states where Medicaid does pay for basic dental services for the elderly, benefits would not be applicable to them.
The earmarked taxes for Medicare currently cover less than 1 percent of all the financing for dental care (Figure 2d
). However, a 2000 study conducted by the Institute of Medicine (IOM) focused on extending Medicare coverage for preventive and other services.20 The IOM recommended the following four requirements be present for dental care to be considered medically necessary:
- Benefits of dental care outweigh the harm;
- Dental care improves the outcome for medical conditions;
- Effective dental care exists for those oral health risks; and
- The disease burden from oral health risks on medical condition is substantial.
Using these four requirements, the IOM went on to identify and consider five conditions it considered potentially eligible for medically necessary dental care. These conditions include head and neck cancers, leukemias, lymphomas, organ transplant recipients, and heart valve repair or replacement. The IOM found it "reasonable to cover both tooth-preserving care and extractions" for patients with head and neck cancers to prevent osteoradionecrosis. In addition, the IOM found it also "reasonable to cover a dental examination, cleaning of teeth, and treatment of acute infections of teeth or gums in leukemia patients prior to chemotherapy." However, the committee found the evidence "insufficient to support positive or negative conclusions about dental services for patients with lymphoma, organ transplants and heart valve repair or replacements." Given the very narrow definition of medically necessary dental care adopted by the IOM, we are unlikely to see federal Medicare coverage of a substantial portion of dental care in the foreseeable future.
However, another possibility would be to develop a new "Part D" for dental care in the Medicare Program. Medicare (Title XVIII of the Social Security Act) provides health insurance for covered persons who are aged, blind, or disabled. Part A in Medicare provides hospital insurance for all covered persons. Part B is optional health insurance that covers physician’s services. Participants (or their employers or former employers in the case of retirees) pay a premium for Part B. Part D could be similar to Part B, in that a monthly or semiannual premium could be priced so it would cover the costs of basic or comprehensive dental services. Development of such a payment mechanism would likely go a long way toward increasing access to dental care for seniors.
Private Financing
Several traditional reimbursement mechanisms are routinely used in the delivery system in the United States. Recall in Figure 2d that the majority of payments for dental care are currently split, with half coming from out-of-pocket payments and half from private dental insurance.18 Private insurance coverage is most often provided as an employment benefit or extension thereof. Currently, Hawaii is the only state in which more than half of the elderly have some form of dental insurance.21 However, many insurance payment systems are not available to retirees,22 and, as shown in Table 3, less than one-third (31 percent) of the elderly had dental insurance in 1995.8 Nevertheless, dental insurance is an important determinant of access to care. Data from the 1996–2000 Medical Expenditure Panel Survey (MEPS)23 show that persons sixty-five and over who had Medicare and private insurance were more likely to see a dentist (49 percent) than elders with Medicare only (34 percent) or Medicare and public insurance (17 percent). Finally, out-of-pocket costs are paid by those without dental insurance or the underinsured. Additional out-of-pocket payments are comprised of co-payments, deductibles, and services not covered by insurers.
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Innovation in Financing for the Future
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What are the dental care reimbursement options for the aging baby boomers in the United States as we begin the twenty-first century? Regardless of our approach, we should build on the principles articulated by the IOM for assessing proposals for health insurance reform.24 That is, health care coverage should be "universal, continuous, and affordable to individuals and families. Further, the health insurance strategy should be affordable and sustainable for society. Finally, coverage should enhance health and well-being by promoting access to high quality care that is effective, efficient, safe, timely, patient centered, and equitable."
An assumption integral to this article is that universal health care is not an option. Further, implicit in the options described below is that new money would be required to pay for the new services. The sources of the new money depend on the recipient of the services: money for oral health services for the poor would likely come from government; for working people and retirees it would come from a combination of the workers themselves, as well as possibly their employers. An even greater challenge would be to create a scenario where there would be no new money. Research is needed to inform us whether cost savings would result from preventive services in older adults, as they have in children.
What does success look like? Success will be achieved when all elders who need care receive it. This need could be either professionally or personally determined. Success will be achieved when all elders, regardless of age, health status, race, socioeconomic status, and geographic location, receive continuous access to high quality care. High quality care is defined as treatment that goes beyond pain and infection and includes basic diagnostic, preventive, restorative, and periodontal services.
A mosaic of reimbursement options will be required to meet the needs of tomorrow’s elders, depending on elders’ personal resources, the business community’s willingness to include dental insurance for their retirees, and combinations of public and private programs, as shown in Table 4. Two articles in this issue describe novel approaches: inclusion of dental services in a packaged HMO plan25 and prepayment of dental insurance for retirement.26 The prepayment option developed by Washington Dental Service/Delta Dental takes an innovative approach to funding dental care in retirement. This program would allow a person to prepay the benefits while at the peak of his or her earning power. This is an attractive strategy since it eliminates the majority of the cost burden during the period of life where fixed income dollars need to be preserved. An example of including dental services in an HMO plan is the "First Seniority Plan" that was in effect in the Harvard-Vanguard System in Greater Boston during 1997–98. The plan was a pilot program financed by Medicare and provided dental care as a covered benefit, as detailed in Dr. Compton’s article.25
Several existing private plans for retirees are described in Table 5. These include the American Association of Retired Persons Plan, the plan for military retirees (personal communications, Dr. Lowell Daun), and the plan for retired teachers (personal communications, John Brouder). All of these plans are voluntary and self-paid. In an era of concern over the rising costs of Medicare and Social Security and a growing interest in self-funding of retirement, these options appear attractive and are likely to grow among middle-income and well-to-do elders.
Opportunities for innovative publicly funded and combined state-federal and even federal-private partnerships are shown in Table 6 and briefly described here.
Elders of limited means, meaning those below the poverty level or even within 125 percent-200 percent of the poverty level, have little ability to cover the out-of-pocket costs required even for basic dental services. Two options come to mind with respect to remedying this situation. The first is to develop an Elders Health Insurance Program (EldersHIP) similar to the SCHIP programs for the poor and near poor. At the Elders’ Oral Health Summit, Dr. Steve Eklund presented this option. A summary of this plan is shown in Table 6. Its advantages include the delivery of care to the most needy elders, especially if it encourages more providers to see them. Dr. Eklund estimated that costs for 7 million poor elders in 2002 would range from $720 million, assuming $300/user/ year with 40 percent utilization, to $1.89 billion, assuming $450/user/year with 60 percent utilization.
A second option includes dental care as a benefit under Medicare, as an optional "Part D," presented by Dr. Richard Manski at the summit. Table 6 presents three of Dr. Manski’s options for adding a Part D for dental under Medicare. All are optional programs, funded by the participants. Actuarial data from existing private plans could be used to develop these options.
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Summary
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Disparities in access to and financing of dental care among older Americans will become more critical with the aging of the 76 million baby boomers—a generation that will begin to retire in 2006 and start reaching age sixty-five in 2011. At a time when the elderly are an ever-larger proportion of Americans, the greatest percentage increases within the oldest age groups will occur among minority elders.4 We expect unprecedented growth in the proportion of Americans who are old, especially among minorities. At the same time, minority elders have not shared in the gains in oral health status and access to dental care made by nonminority elders.1,5,27 Thus, there is a need to plan for equity in access to and financing of dental care among the elderly in the decades ahead. The existing and theoretical innovative programs described above are only the beginning. Only a combination of publicly and privately funded plans will be able to satisfy these criteria and provide adequate dental coverage for the oral health needs of elders in the twenty-first century.
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Acknowledgments
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The author thanks Drs. Alex White and Linda Niessen for their expert advice and comments on multiple versions of the presentation and this manuscript.
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Footnotes
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Dr. Jones is Associate Professor in the Boston University Schools of Dental Medicine and Public Health, Chair of the Department of General Dentistry, and Convener of the Elders’ Oral Health Summit. Direct correspondence and requests for reprints to her at Department of General Dentistry, Boston University School of Dental Medicine, 100 East Newton St., Boston, MA 02118; 617-414-1065 phone; 617-414-1061 fax; judjones{at}bu.edu.
Grant Support: NIH R13 DE014703
[GenBank]
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Abstract
Oral health disparities and...
