Bundling coverage is already common in the property/casualty world, but now health insurers are increasingly looking at bundling coverage.
Health insurers are far more interested in offering dental benefits now than they were two years ago. That’s the main finding in a new report, “Convergence of Dental and Health Insurance Accelerates,” released 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 2018 report, “Turning Point: The Fate of Standalone Dental.” That report found health plans are moving aggressively into dental insurers’ turf. 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 from 68% in 2018 to 80% today, and the percentage offering adult dental benefits has more than doubled to 48%. Of the 20% of health insurers who do not offer dental benefits, 25% are likely to offer them in the future. This is a shift from 2018, when health insurers that didn’t offer dental benefits essentially had no plans to add them.
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.
By 2025, most dental respondents foresee partnering with (54%) or bundling benefits with (46%) a health insurer.
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. However, 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 and health product but administering dental as a separate product—a one-product, two-premium model.
“The health insurance market and the dental insurance market are traditionally so slow to change. So these findings are significant,” said Benjamin Baenen, director of health care and life sciences at West Monroe.
The survey findings provide some insight to benefits brokers, Baenen added. “If you can offer a single purchasing decision that covers health, dental, vision and critical illness, you have a compelling story and you can provide a better insurance plan.”