Covered California, the state's new marketplace for health insurance policies, has positioned itself as a powerful advocate for consumers and small businesses. But in a disputed move, it threatens to raise costs for one group of Californians: parents of young children who aren't covered by group plans at work. Against the advice of lawmakers and regulators, the insurance exchange has barred policies that include both medical and pediatric dental coverage. As a result, parents could face not only higher monthly premiums but also larger deductibles. That's wrong, and the exchange should reverse its stance.
The 2010 Patient Protection and Affordable Care Act, better known as Obamacare, requires health insurance policies to cover 10 "essential health benefits," such as hospital stays, outpatient treatments and maternity care. Those essential benefits also include pediatric — but not adult — dental and vision care. The law makes one exception: Policies sold at a state exchange do not have to include dental coverage for children if the exchange offers at least one stand-alone pediatric dental plan. The point was to provide more flexibility and choice for consumers, enabling those without children to pick a potentially cheaper plan.
Covered California, however, has turned that flexible approach into a rigid one, barring insurers from including pediatric dental coverage in the policies they sell through the exchange. Several insurers filed combined medical and pediatric dental policies with the exchange, but were told to withdraw them. Instead, shoppers at the exchange will find up to six medical-only policies, nine dental policies for children, and one plan that bundles a medical policy with a pediatric dental policy.
The exchange contends that this approach is better because it makes it easier for shoppers to compare medical plans and allows for lower out-of-pocket limits for dental care. But that simplicity comes at a price. The separate dental plans force parents to pay more in premiums and raise deductibles for some families, and there are no federal subsidies for stand-alone dental policies. That means routine dental care could cost parents more than it would have if Covered California had allowed insurers to offer combined plans.
Insurance Commissioner Dave Jones argues in a letter to the exchange board that state law requires all individual and small-group health plans to include all 10 essential health benefits, not just 9 1/2 of them. There's a good reason for such a requirement: It would spread the cost of services that are vital to public health among everyone who carries insurance. But even if the law doesn't go that far, the exchange shouldn't have barred insurers from offering combined plans that some parents would have considered a better value. With the Oct. 1 deadline for signing up customers fast approaching, the exchange should work with insurers to make combined plans available as soon as practical.