Broker Buzz: Don't Forget About Direct Reimbursement

As goes major medical, so goes dental. While employers look to dam up health care cost increases, dental benefits - although still significantly less expensive - also are being reconsidered in a cost-containment light.

Voluntary dental plans are growing in popularity, as the National Association of Dental Plans reports that 69% of consumers now pay at least a portion of their dental premiums.

"Dental seems like it always moves slowly, but now it's starting to pick up steam with the growth of voluntary on the group side," says Tom Dolatowski, vice president of marketing communications at Delta Dental. "Employers are looking at their overall costs, but still not eliminating dental benefits."

Alan Vogel, national dental director for MetLife, concurs. "Voluntary is a big trend, so much so that we have to ask, At what point is a plan voluntary?' For our part, we've said that if a plan is more than 50% employee-paid, it is voluntary."

Dental carriers appear to be embracing the shift toward voluntary plans. In an industry where change generally is slow, "We're glad to have the opportunity to be this creative," says Bebe Shuler-Mure, vice president of products at Cigna Dental.

Expanded choice, better support

The growth in voluntary plans has pushed carriers to offer consumers greater choice and decision-support tools similar to those that experts say must accompany consumer-driven health plans.

"Purchasing decisions change when employees pay more than 50% of the cost," Vogel says.

"So in turn, insurers are providing better information so members can make better choices."

Shuler-Mure notes: "Carriers had to figure out what other aspects of dental were key to engage members around, beyond a vanilla variety of things," specifically citing dental cost estimators and even dental risk assessments to show employees their risk for chronic conditions - including heart disease and diabetes - if they neglect their oral health.

As employees are asked to pay more for their dental benefits, she says cost estimators have been particularly important.

"Helping members budget for dental in a way they weren't before and making the costs known makes a big difference."

It's also made a difference for retirees, Vogel says. "Under the voluntary mindset, especially plans that are 100% employee-paid, we're seeing retiree dental starting to grow. Employers are saying, We don't mind giving retirees a dental benefit because we don't have to do anything.'"

He adds that such plans coupled with an education and risk assessment component also give employers a way to tap into keeping retirees thinking about their overall health.

Focusing on wellness

Virtually all dental carriers had employers and employees alike thinking about the link between oral health and overall health in 2007, and experts predict such integrated education and outreach efforts will continue this year.

"Integrated programs will only accelerate in 2008," affirms Alan Hirschberg, the head of dental at Aetna.

He says carriers that offer both medical and dental coverage are uniquely positioned to cross-promote wellness because "we can identify at risk medical patients who also haven't been to the dentist and reach out to them."

Citing an Aetna program that conducts just such outreach , Hirschberg says more than 60% of targeted members ultimately sought dental care.

Another aspect of dental plans that is beginning to look similar to health plans is the increase in dental wellness incentives.

At Aetna, members who simply visit the dentist any time during the calendar year will see their coinsurance levels escalate, thus lowering out-of-pocket expenditures for the following year.

Other carriers have adopted full dental disease management programs, a move that Vogel says "makes a lot of sense," but he cautions that such programs are a "reactive approach, and we should be educating people in a proactive way."

By targeting members already suffering from or showing signs of risk for chronic illnesses and getting them to focus on oral health, "you're missing a large segment of people who could still become diseased, or pregnant or at risk, and the people at risk aren't just ones with a medical problem," he argues.

"If a woman has not been to the dentist in 18 months and then gets pregnant, is that the point when we should start working to help her?" he continues. "Employers are being wooed into only looking at a reactive approach."

Regardless of the approach employers and carriers adopt, Shuler-Mure stresses that "early prevention is what's most important, is what resonates and what contributes to a healthier workforce."

Watching the horizon

In addition to keeping an eye on how the 2008 presidential race plays out, dental carriers also are keeping close tabs on a slow uptick in costs and decrease in the nation's supply of dentists - two issues employers will want to watch as well, experts say.

"Yes, dental costs are small compared to medical, but plans are increasing in cost by 5% to 7% a year, and remember- the plans only cover essentially one disease," meaning periodontal disease, Vogel explains.

"That's opposed to medical which covers thousands of diseases, and if you were to break out medical costs singly - like dermatology, for instance - you'd start seeing much lower costs. In that way, employers could end up spending even more for dental care. It's something to be concerned about, especially because the supply-and-demand curve favors dentists."

Indeed, Dolatowski says, "there is an underlying concern about when dentists will ask, Do we really need to be in networks anymore?' With [declining] trends of enrollment in dental schools, if there are fewer dentists, providers will be better able to control price, and payers will be able to exert less influence in terms of discounts."

With price points between providers being relatively small, Dolatowski asks, "Why would a dentist want to join a network when there is little or no incentive for subscribers to choose them?"

That is where tiered dental networks come in, where providers are grouped based on their meeting certain quality standards, but such networks are just beginning to take shape now, with a fair degree of resistance from dentists.

Meanwhile, Vogel says, the bottom line is that "employers need to start thinking about how to get the best value from their dental plans - not the best cost, but the best value."

Finding that value could prove challenging, as Dolatowski admits "a lot of carriers are taking a wait-and-see attitude because, with the 2008 election on the horizon, they are wondering where health care - and therefore dental - will be in the national debate."

Meanwhile, Shuler-Mure says: "I would love to have a crystal ball, but all that we can really do is more of what we already do well."