Thank you for your question and welcome to Just Answer.
The sad fact of the matter is that government dental insurance programs such as Medicaid were never set up to comprehensively cover all needed dental treatment. These programs were set up to cover basic services only as the funds allocated to these programs are limited. I practiced in California for 20 years and we have a similiar program called MediCal. They would pay for any needed treatment for the front upper and lower 6 teeth but only for fillings on any back teeth, If a back tooth needed a root canal, they would only pay to extract it. Their reasoning was they they would pay money to make the patient look presentable to society in order for them to be able to get a job, therefore only front teeth were completely covered.
The truth of the matter is that is is cheaper to extract a tooth (average fee $125) rather than do a root canal (about $1,000 for a molar) and then a crown (again about another $1,000)
What is true, however, is the the long term health effects of removing a tooth rather than saving it are detrimental. You can play that angle at the hearing. A missing back tooth that is not replaced with a bridge (they won't pay for one) will cause a few things to happen:
1. The patients ability to chew will be diminished and might affect the digestion (minor point)
2. Over time the two teeth adjacent to the missing tooth will drift and lean into the empty space. Also the tooth that used to bite against the missing tooth will super-erupt into the empty space. There is a good diagram of this here, the second example down on the page:
The consequences of this tooth migration, as mentioned in the article are periodontal pocket formation, tooth decay and bone loss. These are all conditions that Medicaid would have to pay for, that is, fillings and managing gum infections.
The shifting of the teeth as a result of not replacing a missing tooth can also change the meshing together of the bite and elicit TMJ symptoms. A good article about the signs and symptoms of TMJ are here:
Although not directly mentioned in the article, A bad bite can trigger TMJ. Medicaid will not pay for TMJ treatment.
You best angle will be to argue the detrimental health effects not paying to replace this tooth will have on the patient and that some of the excluded benefits are actually detrimental to the long term health of the patient. Go for the health issue. You will not win the "what's covered and what's not" issue. This is all spelled out in black and white in the contract.
I hope this answers your question. If you would like to discuss this further or have any additional questions, please reply to my answer and I will get right back to you.
Sincerely, XXXXX XXXXX DDS