January 04, 2018
A new executive survey published by West Monroe Partners today found that 96 percent of insurance executives believe the embedding of dental benefits into medical plans is already happening, or will happen. Today, 99 percent of commercial dental insurance plans are purchased through standalone dental insurers.
Competitive margins and profitability, relative benefit simplicity, customer retention, and the increasing proof of correlation between oral health and overall health are driving more health insurers to experiment and invest in adding dental benefits to their plans. Convergence opportunities exist between health and dental insurers, especially as both face significant technical investments necessary to modernize core platforms and address consumer demands. As such, standalone dental insurance plans are attractive targets for health plans – either for acquisition or partnership. In fact, 100 percent of surveyed health plan executives whose companies don’t already offer dental benefits plan to do so in the near future.
The survey results point toward a gap between market realities and leadership action on the dental side of the industry. Nearly half of dental insurance executives (47 percent) feel convergence is a threat to their business, while 38 percent believe it is both a threat and an opportunity, and 13 percent say it would be “positive” for their business. However, 24 percent plan to proceed with “business as usual,” even while 60 percent of all respondents (both dental and health) think the percentage of standalone dental plans will significantly decrease in the next three to five years
The report, titled “Turning Point: The Fate of Standalone Dental,” examines several scenarios for the future of standalone dental plans:
- Dental is absorbed into overall health insurance (one product, one shared premium)
- Dental plans are brought on as partners to health insurance (two products, shared or separate premiums)
- Dental plans diversify, expanding into other ancillary coverage such as life and short-term disability, to remain standalone
“For standalone dental plans, winter is here,” said Will Hinde, managing director of West Monroe’s Healthcare & Life Sciences practice and co-author of the report. “It’s…