Of the 87% of executives who see convergence already happening, 89% say it is accelerating—up from 21% who said the same in 2018
Although dental payers feel less threatened by health plans, health insurers are far more interested in offering dental benefits now than they were two years ago. That is the principal finding in a new report, "Convergence of Dental and Health Insurance Accelerates," released today by West Monroe, a national business and technology consulting firm.
The study—based on a survey of 106 executives of commercial and government dental and health plans across the country—is a follow-up to the firm’s January 2018 signature research, "Turning Point: The Fate of Standalone Dental," which signaled an aggressive move by health plans into the profitable turf of dental payers. Both studies examined potential scenarios for the future of dental plans, such as:
- 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, short-term disability, and pet insurance to remain standalone offerings
Overall, the percentage of health insurers offering dental insurance products has risen substantially, from 68% in 2018 to 80% today, and the percentage offering adult dental benefits has more than doubled to 48%—clear evidence of an accelerating shift toward convergence.
"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," said Will Hinde, managing director and West Monroe’s Healthcare & Life Sciences practice leader. "A threat to a thriving business model – like the one standalone dental has profited from for decades—will inevitably feel like a crisis. But in crisis lies opportunity for those that are strategic and prepared. As disruptive as the changes may be, dental insurers that embrace the trend and get in front of it aggressively will be the winners."
Nearly 9 in 10 health and dental plan executives say that convergence is already happening (43%) or will happen eventually (44%). Of executives who believe convergence is already happening, 89% say it is accelerating – far higher than the 21% who said so in the 2018 study.
The survey found clear evidence of a desire for "bundling" —when a distinct, separate dental insurance policy is sold in a package with a health plan—but the preferred strategy for doing so has shifted. In the new study, health plan executives expressed a preference for offering consumers a single, bundled dental/health product but administering dental as a separate product—a one-product, two-premium model—given the underwriting complexity. This contrasts with the 2018 survey, where respondents considered the most likely partnership scenario to be one that aligns benefits from a consumer perspective but continues to operate separately (a two-product, two-premium model). Today, executives consider this the least likely scenario.
"The pandemic has introduced uncertainty, as tens of millions of workers lose their jobs, potentially leading to slumping insurance revenues and a shift from employer-sponsored to individual coverage," Hinde said. "Insurers that can offer technology tools to support their members or plans for those recently unemployed may see opportunity. In the meantime, invoice credits, waiting periods, and teledentistry services will have a big impact."
About West Monroe
West Monroe is a national consulting firm that was born in technology but built for business—partnering with companies in transformative industries to deliver real, measurable results. Technology is who we are, it is not something we bolted on overnight, and we believe it is one of the greatest enablers of business value. That’s why we work in diverse, multidisciplinary teams that blend industry expertise with deep operational and technology capabilities to create quantifiable, financial value for our clients. Our 1,500 employees based in seven offices across the United States also own 100% of our business, so when you partner with us you know we are committed—because your success is our success. Our undeniably different approach breeds undeniable results. Visit WMP.com to learn more.
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