Traditional Model of Separate Coverage for Health and Dental will be a Thing of Past
According to a new West Monroe study, a national business and technology consulting firm, there is an increasing trend of the plans having both health and dental insurance. Since 2018, the health plans offering dental benefits have doubled, and many health plan executives today prefer to offer consumers a plan with combined benefits of health and dental care. According to a recent study it was discovered that out of the 20% of health insurers who were not offering dental benefits, more than half of insurers are likely to offer dental plans in the future. About half of dental insurers are likely to associate with a health insurer by 2025.
A new report titled “Convergence of Dental and Health Insurance Accelerates” was released by West Monroe in June. It included survey report of over 100 executives working at dental and health insurers of the U.S. As said by Will Hinde, managing director, and West Monroe’s Healthcare & Life Sciences practice leader, “It is becoming apparent that the health and dental insurance industries are on the verge of convergence, threatening to upend the standalone-dental business model. This survey reinforces the call to action for dental plans.”
It was revealed through the report that only those dental insurance companies will survive the merging of health and dental insurance who were quick to react to the changing business model. According to the study, there is a significant increase in the percentage of health insurer offering dental insurance products, from 68% in 2018 to 80% in 2020, and the percentage of insurers offering adult dental benefits has more than doubled to 48%. The study also indicates that there is a desire for merging of both these plans.
According to Will Hinde, the merging of health and dental insurance will be a threat to a flourishing business model, as a standalone dental plan has earned huge profits for decades. The changes may be disruptive but the dental insurer that will quickly adopt this trend will eventually prove winners. The study has provided three potential market shifts that are, dental plans will be merged with overall health insurance, dental plans will be made available as a partner to health insurance, and thirdly dental plans may vary and include coverage for life or short-term disability insurance.
Hinde further said that the COVID-19 pandemic has brought uncertainty because millions of workers have lost their jobs, leading to a reduction in insurance revenues and also a shift from job-based coverage to individual coverage. Health insurers need to provide technology tools to support their plans or members for recently unemployed who may see opportunity.