Effect of an annual benefit limit on adult dental expenditure and utilization: a cross-sectional analysis

Despite widespread use of dental benefit limits in terms of the types of services provided, an annual maximum on claims, or both, there is a dearth of literature examining their impact on either cost to the insurer or health outcomes. This study uses a natural experiment to examine dental care utilization and expenditure changes following Indiana Medicaid's introduction of a $600 individual annual limit on adult dental expenditure in 2003.

In a before and after comparison, we use two separate cross-sections of paid claims for 96+ percent of the Medicaid adult population. Paid claims were available as a per-member-per-year (PMPY) figure.

Between 2002 and 2007, the eligible population decreased 3 percent (from 323,209 to 313,623), yet the number of people receiving any dental services increased 60 percent and total Medicaid dental claims increased 18 percent (from $34.1 million to $40.1 million). In both years, those Dually (Medicare/Medicaid) Eligible had the largest percentage of members receiving services, about 75 percent, and the Disabled Adult group had the lowest percentage (5-8 percent), yet both populations are likely to have high dental need due to effects of chronic conditions and medications.

The increase in the number and percentage of people receiving Diagnostic and Restorative care suggests that the expenditure limit's introduction did not impose a barrier to accessing basic dental services. However, among those receiving any service, PMPY claims fell by 37 percent and 31 percent among the Dually Eligible and Disabled Adults categories, respectively, suggesting that the benefit limit affected these generally high need populations most.