Keeping an Eye on Healthcare Reform
By Gary W. Price, CEO, of Dental Trade Alliance
For several months we’ve watched the Congress and the President debate changes to our healthcare system. The far-reaching proposals would require healthcare coverage for almost all Americans. It would make some changes to oral healthcare coverage and many changes to the tax laws. While it seemed to fizzle after the Massachusetts election of a Republican Senator, the debate is back on course and the Congress may well have passed ‘something’ by the time you read this article. That being said, the debate is far from over. In order to secure a majority of votes for passage of this massive piece of legislation many deals are being made. This means the Congress will be spending a lot of time over the next few years amending any law they pass this year. The dental community will be affected in a couple of specific ways.
One provision that seems likely to be included is expanded coverage of dental care for children. Estimates show that this additional coverage could add between $6 billion to $10 billion to our $100-billion plus market. The differences in the estimates relate to how one projects utilization. Since few individuals with dental plans use all their benefits, it is difficult to guess how much new dental care might be provided under this provision.
The second provision that could impact the dental market will be a new tax on medical devices. To pay for new healthcare benefits under the new law, the Congress has looked for every opportunity to find tax revenue. The excise tax on medical devices currently includes Class II and Class III devices, as categorized by the Food and Drug Administration. We estimate that about half of all dental devices sold fall into these two categories. While not final as I write this, the latest proposal is for a 2.9 percent excise tax at the point of sale. Congress justifies the tax because it claims the industry will receive a windfall from adding new dental patients to the market. Unfortunately, it appears for the dental industry that the tax will exceed the “windfall” by as much as three times.
The DTA is working with the Congress and a variety of coalition partners to mitigate the effects of the tax on our industry. We have pointed out that the tax contribution from our market segment will far exceed the benefit of new dental patients. Unfortunately, it may take some time to work through these issues with the Congress.
The issues in the healthcare system reform debate are important to us all. DTA has engaged a Washington lobbyist to represent our interests on Capitol Hill, but more help is needed. We are asking everyone in the industry to register their opinions on health system reform with their elected representatives in Washington. Our DTA Web site (www.dentaltradealliance.org) has information on how to contact them and summaries of the issues. We don’t just welcome your support – we need it. The changes being made in Washington will dramatically influence how our market functions and whether it continues to grow appropriately. Let us know if you can help in this effort to represent the dental industry.
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