It's been a tumultuous year for the dental industry. While health care reform has dominated headlines over the past year, other trends such as technology, demographics and the economy will affect the industry going forward.
EBA solicited feedback from industry pros, including Tom Giddens, senior vice president and co-director of U.S. sales at Aflac, Bebe Shuler-Mure, assistant vice president of product for CIGNA's dental products, Eric Sternberg, president of AlwaysCare Benefits and Chris Swanker, vice president of group dental and vision with Guardian, for their thoughts on reform, technology, demographics and the economy.
What are some of the biggest changes you expect from health care reform?
SWANKER: The important thing to note is that standalone dental and vision plans are exempt from most of the near-term market impacts of health care reform. Something like 96% of people covered by a dental plan are covered by a standalone plan. It's not part of their medical plan. And right now the ability to use standalone dental plans is preserved within the exchanges under 100 lives but there are still some clarifications needed to preserve that right outside the exchanges.
A very specific example of this is that all medical plans upon the first renewal after Sept. 23 need to provide access to dependents benefits up to age 26. That new requirement does not transition over to standalone dental and vision plans. But the [employers] have a decision to make. Will an employer want to extend dental benefits to age 26 to align with their medical coverage or not? Frankly, we're getting some mixed signals. Only 40% of employers we surveyed have made a decision as to what they're going to do. And of those who've decided, it's roughly two-to-one that they just want to leave the dental benefits as it is because I think employers understand that while there may be some convenience to this it will add some cost. And they're in the process of weighing that cost and benefit of aligning their benefits with medical versus keeping their benefits the way they are today.
STERNBERG: There are still a lot of questions that will have to be answered over the next 12 to 24 months. Any time you have this kind of sea change it's certainly going to affect what we do. Employers have a lot of decisions to make. We changed all of our dependent guidelines to match what's happening with health care reform. There's a lot of questions about how pediatric dental benefits will be delivered in the exchanges and outside of the exchanges and that's going to evolve and become much clearer in 2011.
GIDDENS: In a recent study we commissioned, 42% of employers who do not currently offer supplemental insurance will be interested in offering dental coverage after health care reform is implemented.
What changes have you seen in how employees want to receive information about their dental benefits?
SWANKER: The biggest game changer has been using technology and online services specifically around enrollment. [According to our research,] 61% of employees are now using a computer-based enrollment for a portion of their enrollment period, which compares to just 23% five years ago. Within the dental space we continue to see a shift to more high/low buy-up plans, whether they're all PPO plans or whether it's a DHMO/PPO dual choice plan, but where employees have a choice of two or more different dental plans, the online experience has got to help people decide [between] Plan A or Plan B.
I think we'll start to see some of this information and comparison shopping moving from just the point of enrollment into also finding a dentist and providing information about the dentists. But as an industry we're not quite there yet. It will come with consumerism and consumption of health care.
SHULER-MURE: Many dental offices now are texting appointment time reminders to their members. We have Web reminders. You set it up the way you want it set up and you'll get a reminder via e-mail or text. Technology plays a really big part in setting an expectation. We overhauled our explanation of benefits recently and now give people the option of viewing it online because people were telling us we were sending them too much paper.
STERNBERG: Clients are demanding more and more information be available electronically. Even in parts of the country that have historically been somewhat resistant to change and to technology, we're seeing more acceptance and a lot more request for it. People are saying 'if you don't have it, we can't work with you.' I would say we get less of a push on the enrollment side than we do on the back office administration side.
What effect will baby boomers retiring have on the dental industry? And what about generation Y?
SHULER-MURE: The biggest challenge is they [Gen Y] are the 'young invincibles.' They [feel they] don't need insurance. If it's not 100% employer paid, that's not necessarily something they feel they have to have, unlike their parents and grandparents. With them, it's about driving home the message of attaining an ideal health state, and your mouth speaks volumes about the health of the rest of your body.
SWANKER: Different segments of the population need different aspects of the overall benefit. Whereas coverage for implants may be more important for the baby boomers, things like cosmetic coverage may be what's important to Gen Y-ers. I think you'll start to see plan design evolve to try and target those different segments a little better.
We're at the beginning stages of quite a long run of baby boomers retiring. And they're really the first generation to do so that is used to having insured dental benefits. It'll be interesting to see whether they choose to continue that and seek out insured dental plans or move to a cash, self-insured sort of system. The key to that market is going to come down to figuring out an efficient way to deliver it.
Will people come back to their dental benefits post-recession? Did they leave in the first place?
SWANKER: Dental benefits are highly valued among employees. The recession really didn't have an impact on employees' willingness to [make payments] out of pocket. We've really had strong participation in our dental plans since the fall of 2008. However, as unemployment increased, there was an impact as more people were not covered because they lost their jobs. I think the recession strengthened appreciation employees had for their benefits. And that increased awareness caused quite a sharp increase in utilization of dental benefits in 2009.
STERNBERG: What we've observed is employees holding on to their benefits. And they're using them. The market has become harder. Employers are more reluctant to move, particularly when worrying about things like grandfathering of health care coverage. Losing a dental plan pales in comparison financially. So the market's become tougher but consumers are holding on to their benefits.
GIDDENS: The economy's placed an obvious financial concern in the minds of employers. How can you continue to provide a valued benefit at an attractive price? A LIMRA study found that 32% of employers would offer dental insurance to employees if they could afford it. As employers continue to shift benefit costs to their employees, voluntary dental insurance plans are expected to grow in popularity. The National Association of Dental Plans predicts that 15% of employers who currently offer dental coverage are likely to transition to voluntary dental plans in the near future.
Adoption rates for electronic dental records are still fairly low. Do you see that changing anytime soon?
SWANKER: President Bush made a goal of interoperable health records, increasing that number by 2014. That objective has been reinforced by the Obama administration because it's a fundamental initiative within PPACA. There are incentives to have dental and medical providers increase utilization. I think there are still some barriers in the way, such as the cost of implementation. I don't know that the dental industry will be on the leading edge compared to some of the hospital and medical providers.
STERNBERG: We're trying to collect the data and get ourselves into a position where we can have our clients give us the authorization to share that kind of data with a medical management company or a health plan. That's something we're looking at very closely.
Davis is the managing editor of Employee Benefit News.
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