In 2018, a survey found that an increasing number of health insurance providers were moving towards the profitable turf of dental insurance. It’s now becoming clear that these two industries are on the verge of convergence, threatening to upset the standalone dental business model.
Research has shown that the number of health insurance companies offering adult dental benefits has doubled since 2018. This has led to many dental insurers in the US preparing for the coming changes. Many of these companies are looking at convergence as an opportunity to partner with health insurance companies by placing their benefits in health plans. Dental insurers who take this change seriously and seize the moment will prosper, while the others will be left to fight for the ever-shrinking market share. Keep reading below to find out more about the convergence of dental and health insurance in the U.S.
Is Convergence an Opportunity or a Threat?
Currently, the majority of individuals in the U.S. still rely on standalone dental companies, but this is likely to change over the next few years. In fact, research has shown that by 2025, most standalone dental insurers believe they will have partnered with a health insurance company and bundled their benefits.
While many of these businesses see convergence as an opportunity, over 48% of businesses also believe it could threaten their business. Some of the potential benefits of convergence could include:
- Dental insurers will have access to networks, scale, capital and technological infrastructures that they would not have had access to previously.
- They will be able to get a more complete view of their patients. This will lead to better health outcomes at lower costs.
- They will be able to offer their customers better deals e.g. they can save money on braces. Find out how you can save money by reading more about braces insurance.
Many of the benefits listed above could give health insurers the ability to topple vulnerable standalone dental insurers. Not only can these businesses offer lower prices than standalone dental plans, but they can also offer a one-stop-shop convenience, which is appealing for younger customers. Worse still, health insurers are not the only businesses interested in competing in the dental insurance market; Non-medical, ancillary insurers are also starting to notice the benefits.
What Can Standalone Dental Insurers Do to Remain Competitive?
In order to remain successful in this competitive environment, dental insurers will need to be strategic and proactive. They will need to be innovative in areas like:
- Data-sharing
- Tele-dentistry
- Cloud-based technology
- Alternative payment models
- Tackling their technology debt
- Exploring their own possibilities for diversification
Oral Health is Overall Health
Last year in the U.S., only 37% of adults visited the dentist for their yearly check-up. One of the biggest factors driving health and dental plan convergence is the integration of dental health into overall health. This integration, combined with the fact that dental coverage often determines whether a person will visit the dentist on a regular basis, as well as value-based dentistry, should help to increase the number of people visiting their dentist for a check-up.
On the medical side, these partnerships (particularly those which have effective technology platforms) can offer better care coordination, drive better health outcomes, and they can provide their patients with an easier to use healthcare system.
The Future
Other insurance companies are already beginning to show an interest in the convergence between health and dental insurance providers. This means that in the future, there’s a good chance we’ll see even more opportunities opening up for consumers. In the next few years, we expect to see insurance companies bundling dental, medical, vision and pet insurance into single policies. Akin to the popularity of bundling life, home and auto insurance, many people believe that we will see this trend moving towards healthcare.
How COVID-19 Affected the Convergence of Health and Dental Insurance
The recent COVID-19 pandemic has sewn some uncertainty into the convergence of health and dental plans in the U.S., but now is not the time for dental payers to sit back and ignore what is happening. With the increasing number of health insurance companies offering dental treatments, and competition from other insurers increasing too, only businesses who take pro-active steps to claim their place for themselves will succeed as convergence accelerates.
The number of health plans offering dental benefits has more than doubled in the last couple of years. Many dental insurers see convergence as an opportunity to partner with new entrants, placing their benefits in health plans. Dental insurers need to take convergence seriously. The companies that take advantage of the moment are more likely to be successful, while others will be left to battle it out for an ever-shrinking portion of market share. If you’re a dental insurer, then make sure you’re ready for the change.