New survey shows the changing landscape of dental insurance. Here’s what you need to know

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By Benjamin Baenen and Will Hinde

The number of health plans offering adult dental benefits has more than doubled since 2018, according to a new survey by West Monroe Partners, as health and dental insurers rush to converge.

While in some ways this represents a radical change, in others it corresponds to sweeping changes in health care: moving away from costly fee-for-service models and moving to coordinated care, reimbursement. value-based and more streamlined, affordable and experiential-based prevention.

Yet the effect of this accelerated convergence will be felt throughout the dental industry. Independent insurers who have historically dominated the market will be forced to evolve, to associate with health plans or to lose in the face of new competition. Dental practices will need to adapt to new insurance plans and growing consumer demand for value-based care and changing reimbursement models. Ultimately, ideally, consumers will reap new benefits from their payers and dental providers.

Here, we will detail some of these impacts, drawing on the main findings from West Monroe’s latest survey of health and dental insurers.

The convergence is there, and is accelerating

As more health plans offer dental benefits, the territory that independent dental payers have long had for themselves may be shrinking: a third of survey respondents suggested that the market share of these payers will fall to 90% by 2025 (compared to around 97% today); one in five thinks it will drop below 85%.

It may not seem like a significant drop, but for dental and health plans it represents a seismic and rather sudden change. In our 2018 survey, for example, executives of medicare plans that did not currently offer dental benefits had no real intention of doing so; this year, a quarter of health plan executives say they are likely to offer them in the future. In addition, auxiliary (non-medical) insurers are also part of the mix, with half of the executives surveyed suggesting that these players exert significant pressure on the oral services market.

In response, dental payers have started to lay the operational and strategic foundation necessary to remain competitive, with most expecting to partner (54%) or bundle benefits (46%) with a local health insurer. 2025.

This, of course, is easier said than done. The survival of stand-alone dental plans depends on their ability to be truly proactive and strategic in their efforts. This can be innovative in areas such as alternative payment models, teledentistry or data sharing; updating technological capabilities, which 67% identified as their main areas of investment; optimize processes through data management strategies and improved operational metrics; or explore their diversification options, whether that is to become pure third-party administrators, to merge or acquire other companies, or to offer their own ancillary products (e.g. vision, hearing, life, animal of company).

What dental insurance will look like in the years to come

Although convergence is accelerating, bundled health / dental plans remain in their relative infancy. Insurers have yet to see the plan to integrate the two products and coordinate aftercare between doctors and dentists. Meanwhile, the technological capabilities needed to administer and underwrite a unified product smoothly remain underway, despite progress made by health insurers. (The number of respondents citing the lack of appropriate technology as a barrier to convergence has fallen from 10% since 2018 to 36%.) Gradually. Still, West Monroe recommends preparation.

However, today’s consumers increasingly demand and expect more convenience. Perhaps this explains why respondents in 2018 saw health and dental insurers move into a two-product, two-premium model, while this year that scenario took precedence over a one-product, two-premium model: in Indeed, while the administration may take place separately behind the scenes, the product (health and dental benefits) will always appear unique to the consumer.

This single product model has some key advantages: It appears bundled and cheaper (the combination of products allows plans to offer discounts) to the consumer, while the underlying operations require limited administrative changes. Because a single system capable of linking products and procedural codes remains out of reach for now, this model offers today’s insurers the fastest route to market.

Consumer demand will increase

Only 37% of American adults visited the dentist last year, a number that, in light of COVID-19, is unlikely to increase in the immediate future. Pandemic aside, the statistic reflects some skepticism, expressed by a number of health insurance executives in our survey, that millennials may see less value in dentistry because of better oral health products, fluoridation and a variety of additional factors that have reduced susceptibility to dental disease.

Yet this year’s survey also shows that many see the same glass as half full. When asked about the factors behind the abandonment of stand-alone dental plans, a majority of respondents noted the integration of oral health with overall health. This integration, combined with value-based dentistry, partnerships with health insurance plans and the fact that dental insurance coverage is the strongest determinant whether a person will be making regular dental visits – should ultimately lead to a higher overall visit volume.

Additionally, nearly half of respondents to this year’s survey (48%) say they expect the market for employer-sponsored dental plan memberships to grow over the next five years, and only 14% think it will decrease. This is particularly true in the personal market, where 63% anticipate growth. As COVID-19 and high unemployment cause a shift from employee-sponsored plans to individual plans, this market could see an even bigger increase than our survey (conducted before the COVID-19 hit) initially suggested.

As consumer demand increases and convergence accelerates, the promise for consumers, dentists and insurers is that sharing health and dental data will offer more holistic and meaningful insights, insights which will ultimately lead to better health outcomes and a more transparent, engaging and practical patient experience.

In other words, while the impending change poses some risk for the content of dental plans to rest on their laurels, it also presents a real opportunity for providers and payers to provide more coordinated and trust-based care. value to more patients at a lower cost.

Convergence is the future, and it’s happening fast. Now is the time to assess whether you are ready for it.


Benjamin Baenen is the Practice Director for Health & Life Sciences at West Monroe, where he leads transformational initiatives spanning product innovation, market entry, business transformation and technology disruption.

Will hinde is the Managing Director of Life Sciences and Health Practice at West Monroe, where he builds multidisciplinary teams to identify innovative ways to increase profitability, create and capture value and secure an advantage competitive to clients of healthcare plans, healthcare systems, life science companies, and specialty healthcare spaces.

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