Joseph A. Nagle of Delta Dental
While the health insurance industry struggles to cope with devastating cuts in Medicaid reimbursement and the soaring premiums that have resulted, it appears that dental insurance has never been healthier. For example, Delta Dental of Rhode Island — the Ocean State’s largest dental insurer — is coming off a banner year financially.
Not only is its enrollment inching toward 500,000, the company ended 1999 with $27.7 million in reserves and operating expenses have decreased for the seventh straight year.
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Why such a rosy picture for dental insurers?
In sharp contrast to their medical insurance counterparts, dental insurers have cut administrative costs and kept any rise in premiums to a minimum.
Joseph A. Nagle, president and chief executive officer at Delta Dental of Rhode Island, said he is simply not seeing any evidence that companies are looking to drop dental insurance as a way to improve a sagging bottom line.
“When a company drops dental, it is often because the company itself is in financial difficulty – not because of the cost of its total benefit package,” Nagle said.
Nagle said he has found that dental benefits have proven to be extremely resilient. His colleague, Paul Sweeney, vice president of sales and strategic planning at Delta Dental of Rhode Island, agrees.
“It is refreshing that employers are not losing sight of the value of their dental programs,” he said.
Sweeney said there are other factors that help the company’s bottom line, including the fact that Rhode Island happens to be a market where tremendous value is placed on dental benefit programs.
Blue Cross & Blue Shield of Rhode Island does not specifically break down its medical numbers against its dental numbers, said Scott Fraser, the company’s vice president of legislative affairs. But, he said, dental benefits have traditionally presented fewer problems – fewer controversies.
“With dental, you aren’t dealing with a catastrophic situation,” he said. “And there is usually a limit to the number of claims. And many dental procedures aren’t as costly as the medical. It is a simpler product.”
There has also been a significant movement toward prevention. It is a movement that is proving to be a profitable approach for both employer and insurer.
In fact, according to the national Institute of Medicine, dental benefit plans save employers and employees $4 billion per year through their emphasis on prevention, early detection and treatment. Furthermore, dental services as a percent of personal health costs will have decreased 50 percent between 1960 and 2000, according to the Health Care Finance Review.
In short, Americans are going to the dentist more often. As a result, they are staying away from major – and more expensive – procedures. That is saving dental insurers money.
According to the American Dental Association, routine dental exams have increased by 12.1 percent since 1979. Fillings decreased by 51.7 percent.
The results of a Delta Dental Plan of Michigan study evaluating claims data of 750,000 insured dental patients confirms that the shift toward increased preventive measures has led to improvements in oral health.
In 1970, only 6 percent of all Americans had private dental insurance. Today, nearly half of the U.S. population is covered by employer-sponsored dental insurance.
The Michigan study showed that scheduled oral exams have increased from one annual visit to one-and-half since 1980. And while routine dental checkups have increased, treatments for common dental ailments have decreased.
From 1978 to 1990, tooth extractions declined 41 percent. Fillings were reduced by 52 percent. In 1960, the average American over 65 had just seven of his or her original teeth. With today’s level of dental care, baby boomers can expect to have at least 24 teeth left at the same age.
