Individual enrollment in dental savings plans rose 20 percent to 7.76 million people in 2016 over 2015, according to the latest survey.
The growth was fueled by senior citizens on Medicare, which doesn’t cover dental services, and young consumers looking for discounts on services – teeth whitening, for example – often not covered by regular dental insurance.
“The growth in discount plans for individual products is really focused on the young and the older age groups,” said Evelyn F. Ireland, executive director for the National Association of Dental Plans in Dallas, and publisher of the 2017 NADP Dental Benefits Report.
Dental savings plans are not insurance, but offer a discount off the price charged by a dentist who participates in the savings plan.
The dental discount savings market is made up overwhelmingly – 89 percent – by Individual plans with the remaining 11 percent made up by groups.
Some of the 1.28 million new individuals covered by dental savings plans in 2016 were added through consolidation of plans that previously may not have been reporting into the NADP, Ireland said.
Florida Leading State for Discount Dental
The state with the largest discount dental enrollment is Florida with 1.54 million enrollees, or about 7.6 percent of the Sunshine State’s population, the survey found.
Texas was the next highest with 959,000 dental savings plan enrollees, or 3.5 percent of that state’s population, and New York with 880,000 enrollees, or 4.4 percent of the Empire State’s population, according to the 2017 NADP Dental Benefits Report.
“Florida has a disproportionate segment of the older population with Medicare that doesn’t cover dental so there’s more opportunity in terms of sales,” Ireland said.
Basic Medicare doesn’t cover dental services but coverage for teeth is available through some Medicare Advantage plans.
Under a discount savings plan, rates for dental services are negotiated by insurers and consumers can save between 10 percent to 60 percent off the retail price.
Routine teeth cleaning costing $106.00 might only cost $55.00, or major dental work like root canal, which could run as high as $1,000, might only cost $448.00 with a dental savings plan.
The Price Club Model
Dental savings plans members pay a fee – not unlike a fee paid for joining a warehouse price club – to join a plan offered by a major insurer and then benefit from discounts every time they visit the doctor.
A family of three can join a dental savings plan for a one-time fee of less than $150.00, and waiting periods last no more than 48 or 72 hours.
Since savings plans aren’t insurance, there are no premiums to pay.
Proponents of dental savings plans say they are more convenient and require far less paperwork than standard dental insurance.
As insurers scale back on dental coverage by raising deductibles, boosting copayments and increasing coinsurance payments, some say there’s very little that dental insurance covers for the limited services.
Insured dental plans come in the form of dental HMOs, dental PPOs and traditional dental indemnity plans.
An estimated 250 million Americans, or about 77 percent of the U.S. population, were covered by some form of dental benefit in 2016, according to NADP.
Only about 4 percent of people enrolled in a dental benefit are enrolled in a private nongroup plan, which would include a dental savings plan.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected]
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