How State Budget Shortfalls Could Put Medicaid Dental Coverage at Risk

Congress is considering cutting $880 billion in spending on Medicaid, the jointly funded federal and state program that provides health coverage to more than 72 million Americans. At least eight states also face budget shortfalls this year. While states with reserves can fill gaps for short periods of time, experts say recent policy changes have slowed economic growth, so long-term shortfalls are likely. During economic declines and federal funding reductions, states can shrink Medicaid programs to balance their budgets. Because Medicaid is a countercyclical program — meaning more people become eligible for it as they lose their jobs during economic crises — the erosion of benefits often comes at times of high need.

Medicaid spending is generally cut by reducing enrollment, benefits, provider reimbursement rates, or a combination of the three. Dental benefits for adults in Medicaid are a frequent target for cuts. This is concerning, since low-income adults are three times more likely than higher-income adults to have untreated dental infections, and twice as likely to have gum disease and unmet dental needs due to cost.

How do states address Medicaid budget shortfalls?

To address Medicaid budget shortfalls, states can either raise new revenue, reduce the number of enrollees by capping or eliminating optional coverage groups, end or limit optional benefits, or lower provider reimbursement rates. Each option has trade-offs, from public resistance to raising taxes and lost coverage for some enrollees to fewer providers accepting Medicaid patients.

Federal law requires states to cover certain groups and services — such as children in very-low-income families and dental and vision screenings for kids — while coverage for other groups and benefits remain optional. Optional coverage, such as adult dental services and home and community-based services, are often on the chopping block during economic decline.

How much does Medicaid dental coverage cost states?

Costs to states can vary based on the comprehensiveness of dental benefits, which can be categorized into four levels:

1. None.
2. Emergency-only, which includes pain relief in defined emergency situations.
3. Limited, which includes fewer than 100 diagnostic, preventive, and minor restorative procedures recognized by the American Dental Association (ADA), and an annual cap of $1,000 or less per-person.
4. Extensive, which includes more than 100 diagnostic, preventive, and minor and major restorative procedures approved by the ADA, and an annual cap of $1,000 or higher per person.

The ADA estimates that extensive adult dental benefits can cost, on average, 1.1 percent of total state Medicaid spending, although the actual share varies by the scope of benefits, reimbursement rates, the number of enrollees, and usage rates. Based on 2023 Medicaid spending, this translates to about $249 million in New Jersey, $46 million in Maine, and $132 million in Wisconsin. In 2022, 25 states and the District of Columbia offered extensive adult dental benefits.

The potential for direct savings from reducing or eliminating adult dental benefits, however, has made them a target for states facing budget deficits — even though such cuts undermine health outcomes for people on Medicaid.

How have states cut Medicaid dental coverage in the past?

While states are required to ensure that children covered by Medicaid have access to comprehensive dental services, any level of dental coverage for adults in Medicaid is optional. Adult dental benefit cuts have occurred in Republican- and Democratic-led states facing budget shortfalls:

• Illinois cut coverage of most adult dental services in 2012, keeping only coverage of emergency extractions.
• Missouri cut adult dental services in 2005 and has slowly been restoring coverage and access over the past 20 years, with limited adult dental benefits added in 2015, dental reimbursement rates increased in 2022, and routine dental exams covered in 2024.
• In 2009, California eliminated most nonemergency adult dental benefits but later reinstated coverage in 2014.
• Massachusetts stopped paying dental providers for most services in 2010, retaining only cleanings and extractions. But the state started restoring services in 2013 and returned to extensive dental benefits in 2021.

How does cutting Medicaid adult dental benefits impact enrollees?

Similar to the effects of interrupted insurance coverage, fluctuations in adult dental benefits create confusion and uncertainty among Medicaid beneficiaries and providers, which impairs access, continuity of care, and outcomes. Historically, cuts to Medicaid adult dental benefits have led to increases in emergency department (ED) visits for nontraumatic dental conditions because people no longer have access to preventive and early-intervention care.

When California eliminated comprehensive dental benefits for adults in 2009, there was an immediate increase in ED visits related to dental care and then a decrease in 2014 following the partial restoration of benefits. Massachusetts and Maryland saw similar trends. In 2018, 42 percent of the costs for dental-related ED visits were paid by Medicaid. Alongside increased spending on dental-related ED use, adult Medicaid dental benefit cuts increase all ambulatory medical care use because of the adverse impacts of poor oral health on overall health and nutrition. The ADA estimates that ending adult Medicaid dental benefits in all states would increase health care costs by $9.6 billion over five years.

What are the unintentional effects of cutting Medicaid adult dental benefits?

Eliminating Medicaid dental coverage for adults has unintended consequences for children. Research shows that when parents have dental coverage, their children are less likely to have untreated dental infections, When adult dental benefits are cut, Medicaid-covered children living in the same household as Medicaid-enrolled adults receive fewer dental examinations.

Cutting adult Medicaid dental benefits can impair enrollees’ employability. Approximately 30 percent of low-income adults report having a hard time in interviews for jobs due to the condition of their mouth and teeth. Poor oral health has been shown to reduce the probability of being employed. Untreated dental conditions among adults also cost nearly $45 billion in lost productivity each year and lead to 183 million hours of lost productive time. The ADA estimated that removing adult Medicaid dental benefits would make it difficult for 2 million enrollees to find employment due to the appearance of their teeth, low confidence, or persistent dental pain.