An Under-Appreciated Truth – Consumer Protections in Dental Plans Are Increasing

An Under-Appreciated Truth – Consumer Protections in Dental Plans Are Increasing

By Mike Adelberg, NADP Executive Director

July 20, 2023

We’ve all been guilty of it at some point. Someone we know tells us something as if it is a fact, and we repeat the non-fact as if it is a fact without verification. And, so it goes until the non-fact lodges as fact in the conventional wisdom.

Even before joining NADP last November, I had heard that consumer protections in dental benefits are not improving even as dental premiums rise yearly. As NADP’s Executive Director, I have quietly listened to presenters repeat these non-facts. Thanks to the excellent work of NADP’s Research Commission and NADP’s Research Director, Jerry Berggren, I’ve seen data that bust these twin myths.

• FACT 1: Dental plan annual maximums are increasingly generous. In 2017, 5% of dental PPOs had annual maximums of $2500 or more; in 2021, 18% of PPOs had annual maximums of $2500 or more. (Based on data from employer group market PPOs, which comprise roughly 90% of this market.)
• FACT 2: Dental plan premiums have held steady. Between 2017 and 2021, employer group dental plan premiums rose less than 1% per year, on average, and only once more than 2%. This is less than half the nation’s inflation rate and compares favorably to medical plan premiums that rose 3.1 – 4.2% in these same years. (Based on data from employer group market PPOs.)
• FACT 3: Dental plan deductibles are shrinking. In 2017, 22% of plans had low deductibles (under $50); in 2021, this number rose to 41%. (Based on data from employer group market PPOs.)
• FACT 4: Dental plans are innovating. Many dental plans now 1.) reward members for using preventive dental care; and 2.) roll over part of a member’s unused annual benefit into the next benefit year (in effect, increasing the annual maximum).

A related non-fact is that dental plans oppose offering plans with more generous benefit structures, such as plans with no Annual Maximums. Many dental plans already offer products with no Annual Maximum, and more will do so as more employers show interest in these more expensive products. In the same way, a car company charges more for an SUV than an economy car, dental plans must charge employers more for plans with no Annual Maximums. Like a car company, a dental plan sells the products that its customers want to buy.

A question worth asking is whether dental plans can continue to offer employers and consumers increasingly better products without significantly raising premiums. Many things need to be discovered to this question. Still, powerful competition in the dental market (most states have more than 25 companies competing for dental plan business) suggests continued innovations as long as major external events do not shock the dental benefits market.

An arbitrary medical loss ratio in Massachusetts threatens dental market stability and the impressive facts listed above. I worry that consumers in Massachusetts will be hurt on January 1 when the new medical loss ratio takes effect. NADP will be watching events in Massachusetts closely, and we urge legislators and policymakers nationwide to do the same.