GUEST POST: Unraveling the "Pediatric Age" Proposal

NOTE: The source of this guest post by Esther Ferington is a wee bit out of date by now, but it's still an interesting topic and she's done her research, so I figured it should still be posted; I apologize to her for the delayed publication: 

Unraveling the "Pediatric Age" Proposal
by Esther Ferington

When HHS rolled out its proposals tied to Open Enrollment for 2016, many of the usual topics made the list (re-enrollment guidelines, start and stop dates for open enrollment, and so on). One that seemed a lot less familiar was "pediatric age":

Pediatric Age.  We propose that pediatric benefits be provided until the end of the plan year in which the enrollee turns 19.

So... that was unexpected. And since we're in new territory here, it raises a few questions:

What are "pediatric benefits"?

To start with, the ACA includes many preventive services for kids, like childhood vaccines, hearing, vision, and developmental screenings, and so on. Beyond the prevention side, states have been defining pediatric medical services under the ACA somewhat inconsistently, per this major recent study in Health Affairs. But the ACA also lists pediatric (but not adult) dental and vision benefits as "essential."

In practice, pediatric dental coverage has become more optional than required. The story behind that is complicated enough that it defied my attempt to summarize it (here's one take on it, with a bonus close-up of somebody's teeth: ACA's Dental Coverage for Children Loses Its Bite). But as things stand today, the exchanges give parents three choices: buy a QHP (if available) that includes pediatric dental benefits; buy a QHP with no dental coverage, plus a pediatric dental plan (which, unfortunately, does not qualify for a subsidy); or don't buy dental insurance. More succinctly, as per the explanation on healthcare.gov, pediatric dental coverage "must be available, but you don't have to buy it."

By comparison, the world of pediatric vision benefits is simplicity itself. Pediatric vision benefits are part of a QHP. For a silver BCBS plan in my area, for example, "members up to age 19" are entitled to an annual eye exam and "one set of glasses/lenses" a year, at no cost.

"Members up to age 19"

And that phrase, "members up to age 19," is the point of the proposed HHS regulation for 2016. Under the current rules, an insurer doesn't HAVE to provide pediatric benefits from the very day an 18-year-old turns 19. If the teenager has an eye exam or get a new pair of glasses before that date, no worries, it's covered – regardless of the insurer or the plan. If there's a delay (the eye doctor gets the flu and reschedules the appointment, the 18-year-old is saving up for better glasses, whatever), it may not be.

The same applies to the "family dental plans" I've spot-checked on the exchange; pediatric benefits are currently for those "under age 19." The key difference in these plans is that pediatric dental benefits, unlike adult dental benefits, have an out of pocket maximum. Scroll down in this "Teeth Matter" blog post to find the 2015 OOP maximums (and the story of where they came from): $350 for one child and $700 for more than one. Without the protection of that pediatric maximum, an 18-turned-19-year-old's coinsurance for having four wisdom teeth extracted could easily go up a thousand dollars – simply for having the procedure too late in the year.

What's confusing about all this, though, is that the QHP itself (or the standalone dental plan) does not go away—nor should it, of course. It still runs through the calendar year that ends on December 31. The premiums stay the same, the same providers are still in or out of network, the health or dental insurance card is still valid, and so on. It's just that the benefits, for someone turning 19, are suddenly not as good.

Aside from the fact that this "unseen" change could be easy to miss, there's also the advance need for the 18-year-old or his/her family to clearly understand at the start of the year which benefits are considered pediatric, will therefore go away, and must be scheduled ASAP, and which are not pediatric and will continue year-round.

You can see why HHS is revisiting this situation.

Simplicity – at (perhaps) a bargain price?

Under the HHS proposal for 2016, all this would change; 18-year-olds could expect the same benefits throughout the year, no matter when they turned 19. For those with early January birthdays, that's almost a year of extra pediatric benefits; for those with late December birthdays, it might be a few days. But from the insurers' point of view, this should average out to about six months more of pediatric coverage for plan members who are 18 at the start of the year.

That can't come without a cost, of course, which presumably would be passed along as premium increases – either generally, or perhaps just to families with 18-year-olds (since premiums are based on age, that should be possible).

Realistically, though, I wonder whether the marginal difference for this one type of benefit for those people turning 19 mid-year will be very significant, given the way that healthcare pundits like to equate "young" and "healthy" (speaking, as here, on average, in large groups). That question is one for actuaries, not me, to figure out—and due to the HHS proposal, I assume they are doing so already.