Modest slowdown in premium growth distinguishes second-quarter financial results for MPL specialty insurers
We look at the financial results for medical professional liability (MPL) insurers for the second quarter of 2022.
Out of the portfolio of benefits offered by employers to employees and their families, dental insurance is one of the most highly valued benefits by workers: 61% of employees consider dental an important benefit.1 When dental benefits are available, 68% of employees participate in the plan, second only to medical coverage. Not surprisingly, the participation rate depends on the portion of the dental premium paid by the employer, but even when the dental premium is fully employee-paid, about half of eligible employees enroll.2 Employers recognize the importance of dental benefits as well; in a 2018 National Association of Dental Plans employer survey, 87% responded that offering dental was essential or a differentiator in attracting and retaining employees.3
Despite the importance of dental as an employee benefit, it can be easy to overlook during periodic employee benefit assessments. With premiums of roughly one-twelfth the size of medical premiums, it is reasonable to expect employers to focus more energy on health insurance. However, as simply stated in an article by the Society for Human Resource Management (SHRM), “too much benign neglect of dental plans could be a mistake.”4 Performing periodic due diligence on a dental plan’s provider network, benefit features, service metrics, and overall cost to employers and employees can help employers optimize their dental benefit offering and keep employees’ health on track.
Even the most generous dental benefit may not be considered valuable by employees if an insufficient dental provider network makes it difficult for them to find convenient, high-quality care. At the same time, the advantages of a larger provider network must be weighed against the financial savings that can come with a more focused network offering more competitive provider fees. Layered on top of general network size and cost considerations is how the plan’s benefits interact with the network to provide value to both the employer and the employee. Analysis of the current dental provider network and how well it meets the needs of your employees is a critical element of a periodic dental benefit assessment.
If the dental plan allows patients to see dentists outside the contracted network—as most dental preferred provider organizations (PPOs) do—what proportion of patients chooses nonnetwork providers? Which specific out-of-network providers are patients seeing, in which geographic areas, and for what types of services? Are patients choosing them because there are no nearby in-network providers, because they are considered especially high-quality providers, or for another reason? Analyzing the “who” and “why” of out-of-network utilization can uncover targeted opportunities for network improvement that may both enhance patient experience and lower plan costs. Having the right providers in the contracted network, as well as a generally convenient and accessible network, can be an important differentiator in network usage and employee satisfaction.
Under a “passive” benefit structure, member coinsurance and other cost sharing is the same regardless of whether the service is provided in-network or out-of-network. Even under a passive benefit, employees have some financial incentive to use in-network providers, as the in-network cost sharing is calculated based on contracted dentist fees, which are lower than prevailing billed charges outside the network. “Active” plans that offer higher levels of coverage—i.e. lower member cost sharing—for in-network services can further encourage members to use contracted dentists. Some plans go a step further and use a schedule-based provider reimbursement mechanism outside the network as well; these Maximum Allowable Charge (MAC) plans reimburse dentists according to a fee schedule even outside the network. Out-of-network providers will only receive the discounted fee from the insurer, and may balance-bill the patient for the remainder of the cost up to the dentist’s normal billed rate. This may substantially increase the ultimate out-of-pocket cost for a patient to see an out-of-network dentist, further incentivizing in-network usage.
The appropriate plan benefit and network construct depends on employer budget and priorities, workforce composition and needs, and other factors unique to each employer group. Incentives to use in-network dentists may allow patients to access richer benefits at lower costs, but also may create satisfaction issues if many patients still want to use out-of-network providers.
While MAC plans allow out-of-network dentists to bill patients for amounts not paid for under the plan’s fee schedule, some other dental plans may also allow dentists, even contracted network dentists, to bill patients for certain procedures. A common example is fillings on posterior teeth: the dental plan may only reimburse the dentist according to the contracted fee for an amalgam (metal) filling regardless of the actual material used. If a patient receives a composite or porcelain filling, the dentist may balance-bill the patient for the cost difference between the filling materials. While the insurance policy documents spell out these rules, consumers may not be aware of the potential for additional charges and may be surprised by a bill. If this is an area of dissatisfaction for an employer group, working with the dental plan to adjust benefits or provider reimbursement for affected procedures can help employees feel more confident in the plan’s value.
Multiple industry resources, including the American Dental Association (ADA) and SHRM, emphasize the importance of providing coverage of preventive dental care with limited member cost sharing and encouraging employees to utilize those services. Promoting use of routine dental services like oral exams and cleanings through member communications, appointment reminders, and other means are critical elements of success. According to SHRM, about a quarter of those covered for dental say they have not visited a dentist due to cost, indicating a potential lack of understanding of how their dental benefit works;5 employees accustomed to deductibles on medical plans may not realize that many dental plans cover routine care with little to no cost sharing. Increased utilization of preventive services will not necessarily increase the cost of a dental plan; in fact, a benefits study by Guardian showed that employer groups with relatively high preventive dental care utilization spent 16% less on dental claims overall, due to less spending on major services.6
A review of your dental plan’s performance on delivering preventive dental care to employees should include the following elements:
While most medical plans offer protection to members against high claims via an out-of-pocket maximum, dental plans typically have an annual plan benefit maximum, which has the opposite effect. For example, for a dental plan with a $1,500 benefit maximum, after the plan pays out $1,500 in claims for a particular patient, that patient is then responsible for all additional dental costs through the end of the policy year. If this benefit maximum is kept constant year after year, the plan provides a lower and lower value to the member as underlying claim costs rise. The lower the plan’s benefit maximum, the more quickly the plan loses value, as the maximum benefit is likely to be reached by a patient more often, as illustrated in Figure 1.7
If a dental plan’s benefit maximum has not been revisited in many years, it could be time to compare it to competitive norms to ensure the plan is providing sufficient value to employees; otherwise, employees could start to max out their benefits with a series of fairly common dental procedures. Another option aside from simply increasing the benefit maximum is to consider a benefit plan that excludes routine preventive and diagnostic procedures from the annual benefit maximum. This construct essentially increases the effective annual benefit under the plan, giving employees the comfort of knowing that periodic dental check-ups will not take dollars away from other more expensive and urgent dental needs that may arise.
The provision of dental services is constantly evolving with new technologies and protocols. Each year the ADA publishes a set of dental procedure codes, incorporating changes and additions based on the newest clinical practices. Aside from keeping up with new procedure codes, dental plans can adapt in other ways to help employees get the most out of their dental benefit. Examples include:
Screenings for oral cancer and other conditions: The ADA publishes a list of features of a comprehensive dental benefit plan, designed to aid employers in choosing quality dental coverage; included on that list is coverage of screenings for oral cancer and other dental- or medical-related conditions.8 According to Delta Dental, more than 90% of systemic diseases have oral manifestations;9 as such, sometimes a dentist may be the first medical professional to identify, just from a routine dental visit, health problems such as diabetes, heart disease, or other conditions. Coverage of such testing can potentially affect medical outcomes as well as dental.
Connections with overall health: In addition to oral screenings that may identify broader health concerns, dental care may promote better health more generally. Correlations between oral health and overall health have been widely studied, and some medical conditions including diabetes, chronic obstructive pulmonary disease (COPD), and cardiovascular disease may be better managed with consistent oral care. Some dental insurance plans provide extra dental cleanings, periodontal procedures, or other benefits for plan members with chronic health conditions. To the extent that better oral health improves a patient’s disease state, savings to an employer could outweigh the extra cost for this dental care. Some dental plans take this concept a step further via fuller integration with medical coverage. An Anthem report indicates that more companies are integrating health and dental care as the shared health data and consistent communication to members across lines of business can help detect and manage chronic disease.10
Teledentistry: While still a very small proportion of total dental services, the provision of dental care using teledentistry methods is becoming more mainstream, and the COVID-19 pandemic accelerated the use of such technology during 2020. Exploring dental plans that cover teledentistry services or even promoting them could enable more utilization of the plan’s preventive and diagnostic benefits, potentially improving access to diagnostic care and mitigating more expensive dental issues down the road.
It’s no surprise that employers want to work with dental plans that provides excellent service to them and their employees. Prompt claim payment, a responsive call center, and efficient administration are expected. But, in particular, plans that can help employees and their families understand and access their dental benefits may result in more productive use of dental coverage. According to SHRM, only half of employees feel that their employers provide sufficient information about their dental coverage.11 To enhance awareness and understanding, many plans now offer member-facing interactive tools such as web portals or apps to help patients find a dentist, better understand what’s covered and how much a service will cost, and remind them to get needed care.12,13 Targeted communications for identified subpopulations—those who have not yet seen a dentist during the policy period or those with chronic health conditions, for example—might further help employers ensure that their employees are using dental coverage effectively.
Each employer’s budget for dental benefits is different, and each employer has its own unique priorities related to offering dental coverage based on the needs of its employees. Similarly, each dental plan’s combination of benefits, provider network, and administrative processes makes up the value as well as the price point of the plan. When employers make the effort to periodically take stock of their dental plan offering, they can avoid the impact of “benign neglect” and update the offering to provide optimal value for employer and employees alike. Conducting competitive market checks and/or periodically putting the dental coverage out to bid allows employers to ensure that both the cost and the benefits associated with their dental plans continue to be competitive and meet employee needs.
3WhyDental.org. Why Offer Dental Benefits to Your Employees. National Association of Dental Plans. Retrieved February 22, 2021, from https://www.whydental.org/employers/why-offer-dental-benefits-to-your-employees.
7Murawski, T. & Hilton, S. (October 2019). Is Your Dental Rating Manual Stale? Milliman White Paper. Retrieved February 22, 2021, from https://www.milliman.com/en/insight/Is-your-dental-rating-manual-stale?utm_source=healthcare-townhall&utm_medium=social&utm_campaign=healthcare.
8ADA. Tools for Employers: Choosing a Dental Benefits Plan for Employees. Retrieved February 22, 2021, from https://www.ada.org/en/public-programs/dental-benefits-plan-for-employees.
9Delta Dental. Diabetes? Heart disease? Osteoporosis? Your dentist may know before you do. Retrieved February 22, 2021, from https://www.deltadentalins.com/oral_health/dentists-detect.html.