Benefits specialists are not quite sure what to think about the current dental insurance enrollment season. Many employers have been reporting solid profits this year and adding employees. Then Hurricane Irene hit, European financial crisis fears resurfaced, and the mood darkened.
“It’s a struggle out there,” according to Steven Stender, a senior actuarial consultant at OptumInsight Consulting, Eden Prairie Minn., a unit of UnitedHealth Group Inc., Minnetonka, Minn. (NYSE:UNH).
The dental benefits picture looked bright in early September, Stender said, but then at the end of the month, “things tanked.”
Dental insurance is almost as popular with the employees who have a chance to sign up for it as major medical health insurance is.
U.S. civilian employers offered major medical coverage to 73% of workers in March, and the take-up rate among workers with access to coverage was 81%.
In the dental insurance market, the offered rate was only 47%, the same as in March 2010, and strong employee participation rates helped push the take-up rate to 79%. In 2009, in a weaker economy, employees kept the take-up rate at 80%.
In 2009, the latest year for which figures are available, dental insurance covered about 57% of the $102 billion cost of U.S. dental services, and patients covered most of the rest of the cost with their own cash.
The dental services market has been booming in recent years.
“For a while,” Stender said, “dentists were making more money than regular physicians.”
Then, in 2008, the financial crisis hit.
Now, Stender said, “dentists are complaining about empty chair time.”
More affluent consumers are somewhat less likely to go in for teeth whitening services; the most cash-strapped consumers are more likely to have sick teeth pulled out and replaced by dentures rather than replaced by high-cost implants.
Dental plan enrollment also suffered.
Mike Schwartz, a vice president in the dental product management at a unit of MetLife Inc., New York (NYSE:MET), said total dental plan enrollment and new dental plan sales tend to change much more slowly than the equivalent figures in the major medical market, because the cost of dental coverage is relatively low.
But the overall weakness of the economy and the stubbornly high unemployment rate have both shaped dental insurance results, Schwartz said.
“Growth has been affected by employers who have reduced jobs, which affects the number of covered lives participating in employer-sponsored dental plans,” Schwartz said.
Sales for 2011 have been stronger than sales for 2009 and 2010, but, so far, 2011 is not stellar, Stender said.
PEARLY WHITE ECONOMIC INDICATORS
One concern is the kinds of medium-term and long-term effects the slump might have on Americans’ mouths.
Benefits experts tend to divide dental plan enrollees into two categories that could be represented by the hypothetical workers: Broke Bob and Eager Ellie.
The Broke Bobs of the market have responded to the recession by skimping on preventive care—even when they still have coverage and their plans provide preventive care for low prices, or for free.
The U.S. Centers for Disease Control and Prevention (CDC) may have caught the beginning of that trend when it released 2008 survey figures that show the percentage of U.S. adults who see a dentist at least once per year fell to 43% in 2008, as the economic crisis was developing, from 44% in 1996. Officials had hoped the annual dental visit rate would increase to 56%.
Probably because of the Broke Bobs’ unwillingness or inability to get appropriate dental care, “you’re seeing more severe cases within dentists’ offices,” Stender said.
But, at the same time, the Eager Ellies have responded to fears of layoffs by getting thorough dental care while they still have coverage.
At MetLife, for example, Schwartz saw an increase in utilization of dental services that started in late 2008, as individuals sought care before their dental benefits disappeared. “This has stabilized somewhat recently,” Schwartz said.
The rush by prudent, nervous Eager Ellies to use their dental benefits has helped offset the effects of the Broke Bobs going without care, by getting those conscientious employees’ mouths into unusually good shape.
The Eager Ellies’ rush to get cleanings and checkups, and overall improvements in dental hygiene and dental care, seem to be contributing to improvements in oral health.