Crowning glory: as employers reduce retiree benefits, more seniors are losing their prized dental coverage.

Dental carriers have something to smile about. Enrollment in dental insurance plans is on the rise and demand for the coverage continues to grow.

But one sector not grinning ear to ear is the growing number of retirees who are losing the valuable coverage as many employers stop providing benefits.

Several dental carriers are trying to brush away those concerns by designing products specifically geared to aging baby boomers and addressing the changing coverage needs of a new generation of retirees.

Many surveys cite dental insurance as the third most requested employee benefit, only behind medical and pharmacy coverages.

While overall sales have remained relatively flat for the past several years, the number of individuals with dental benefits in 2006 increased more than 7 million over 2005, according to a National Association of Dental Plans/ Delta Dental Plans Association report. Today, nearly 170 million individuals have some form of dental coverage.

Part of dental's appeal to employers is that it's relatively inexpensive. Benefits generally run one-tenth of the cost of medical premiums, said Dr. Richard Goren, second vice president of group dental for Guardian Life Insurance Co. of America.

"Employers of virtually every size see dental benefits as essential or as a differentiator in attracting and retaining employees," said Evelyn Ireland, executive director of the nonprofit National Association of Dental Plans.

[ILLUSTRATION OMITTED]

About three-fourths of employers offer dental insurance to their employees, and 22% pay all costs of coverage, according to the fifth annual MetLife Employee Benefits Trends Study. Nearly all larger employers--those with 25,000 or more workers--offer dental benefits, while slightly more than half of smaller employers--those with two to 49 employees--said they offer the coverage, according to the study.

But as rising medical costs drive more employers to cost-shift benefits onto employees, voluntary dental products--still a relatively small market--are growing faster than the overall market, said Gary Shores, dental product manager for Standard Insurance Co.

Limra International's Voluntary Benefits Report Card: The Employer's Perspective, reports that nearly 17% of companies now offer voluntary dental plans.

Filling a Need

The need for dental coverage is clear. Evidence shows a strong link between good oral health and overall medical health. More than 100 diseases--such as cardiovascular disease, diabetes and respiratory illnesses--can be diagnosed from the mouth. Also, medical research shows that bacteria from chronic gum infections can travel through the bloodstream to the heart and other organs.

Pregnant women also are at risk. Women are seven times more likely to deliver prematurely if they have untreated periodontal disease. Studies show that appropriate treatment during pregnancy can reduce preterm births by more than 85%.

"More people visit the dentist than their doctor, so it's an opportunity for members to capitalize on, in terms of diagnosis and identifying conditions," said Goren.

Insurers are introducing benefits to maximize the oral-systemic health connection. Services such as oral cancer screenings, new technologies and treatments, adult fluoride and enhanced periodontal benefits typically are covered.

There's also increasing pressure to cover implants, said Shores. "Considered a somewhat experimental procedure less than 20 years ago, implants now are becoming one of the most commonly accepted choices for replacing missing teeth. Many carriers now offer full coverage for implants and pre- and post-surgical care," he said.

Member education is emphasized, too. Aetna has teamed with Colgate-Palmolive to help its members achieve better oral health as part of overall health. The campaign's focus is on the emerging evidence of a correlation between oral health and systemic health, to promote preventive dental care, and to provide education about using Colgate Total, the only toothpaste both approved by the Food and Drug Administration and accepted by the American Dental Association to reduce and help prevent the gum disease gingivitis.

Retirees: Losing Out?

Another trend is the "greater necessity to tune in to specific care needs around an aging population with services such as periodontal care and prosthetics," said Dr. James Barrett, vice president of provider relations and national dental director for Assurant Employee Benefits.

But while seniors' demand for dental coverage and the awareness about good oral health increases, a growing number of retirees no longer have dental benefits.

About three-fourths of people 65 and older are not in a dental plan, according to the AARP Bulletin. Only about 40% of companies currently offer retiree benefits such as dental, medical or life insurance, according to MetLife's study. Not only that; Medicare typically doesn't pay for dental expenses, and only some private Medicare plans provide coverage.

In response to this growing, underserved market, carriers are creating products specifically to meet retirees' needs.

Delta Dental offers coverage to more than 1 million military retirees and their families through its TRICARE Retiree Dental Plan, a fee-for-service, freedom-of-choice PPO plan similar to most traditional dental plans. "It's 100% enrollee-paid, with a 12-month minimum commitment and benefits that improve over time," said spokesperson Jeff Album.

The company also administers the AARP Dental Plan to nearly 200,000 seniors, and offers low-cost group and individual dental HMO programs designed specifically for retirees.

Assurant Employee Benefits' prepaid dental product is fast becoming an option for its retiree market.

"This product bridges a gap and makes what was thought of as typically higher-end options available and affordable," said Barrett. There are reasonably priced premiums and, in most cases, no annual maximums, predetermination, deductibles or waiting periods, he said.

"Dental coverage is a reality for this sector," said Barrett. "Many are receiving health-care benefits for pre-existing conditions. That can lead them to realize that they may be able to positively impact their overall health if they take better care of themselves dentally.

"The word 'retiree' is taking on an entirely new meaning today," said Barrett. "In prior generations, retirees were older individuals whose dental care usually meant replacement of some or all of their teeth. Baby boomers are the first generation that has entered retirement benefiting from a long-term history of available oral care."

That dynamic is changing the prosthetic landscape. Dentures are quickly becoming extinct among today's seniors. "Now it's usually more about replacing fewer teeth and using implants when appropriate," said Dr. Alan Vogel, national dental director for MetLife.

Fluoridated water and toothpaste, along with regular treatment, also are changing the dynamic, said Roger Skinner, president of GroupLink, a member company of Independence Holding Co.

GroupLink offers retiree-only programs and personal senior dental plans with coverage similar to those provided to active employees and individuals. "Our main difference is that we use age 65 as our starting point," Skinner said. "Those over 65 have higher deductibles and copay levels because they generally have higher utilization levels."

For many retirees, affordability is the biggest deterrent to receiving dental care, said Barrett. "That's perception more than reality. Products such as prepaid plans are up-front about the cost of care at the point of service. It eliminates the financial fear factor for many older Americans," he said.

MetLife's Full Service Dental for Retirees takes responsibility out of the hands of employers. The turnkey offering bundles standard and enhanced dental plans along with participant marketing, enrollment, customer service, record keeping and billing services. Retirees pay the entire premium.

The product offers two dental options with different deductibles and annual maximums. The enhanced option provides additional benefits for major restorative services, and retirees also can cover their spouses, domestic partners and dependent children.

[ILLUSTRATION OMITTED]

Carriers are marketing to retirees through employers, unions, affinity groups and financial planners, said Shores, from Standard Insurance.

"Our biggest challenge is that this isn't just one market," Shores said. "Retirees are very different. Young retirees, for instance, are very Web savvy; those over age 70 are hesitant to allow for electronic premium payments. Carriers need to define different segments."

While dental coverage varies, most policies generally pay 100% coverage for preventive services, such as routine cleanings and X-rays; 80% for basic services, such as filings and minor restorative services; and a 50/50 copay for major services, such as bridges, crowns, dentures and implants.

The types of procedures covered under a typical plan generally account for nearly 97% of all dental procedures performed, said Goren.

"Enrollees have major skin in the game, and in a way dental plans have always been a consumer-directed product because enrollees need to consider treatment plans and recognize they'll have to pay a good portion of the costs," said Delta Dental's Album.

Periodontal disease services, such as root scaling and planing, are covered under many plans. "And some products offer up to four periodontal cleanings or periodontal maintenance a year after active therapy," MetLife's Vogel said.

Some carriers are changing the frequency of coverage in their products. "Members can opt into products that allow preventive care more frequently or as their lives dictate a need," said Barrett.

Certain buy-up options have appeared in the market. Standard Insurance offers two types, said Shores. The first is a base buy-up plan in which employers pay 100% coverage for a lower-cost base plan and employees can opt to purchase a richer benefit schedule under the same policy. The second, a high-low plan, is fully or partially funded by employees, and they select one of the two plan designs within the policy.

Cosmetic services, such as teeth whitening and bleaching, are not covered under most plans. "But the line is graying as to what these services are," said Shores. He cited "increasing pressure for carriers to begin covering composite restoration on all teeth as opposed to allowing only amalgam or silver fillings on posterior teeth."

Brace Yourselves

The Centers for Medicare and Medicaid Services, the federal agency that administers Medicare, Medicaid and government-paid children's insurance programs, expects more than $118.3 billion will be spent on dental expenditures by 2012.

With the demand for dental coverage expected to grow, the popularity of voluntary products probably won't crest for at least the foreseeable future.

Newer plan designs, such as direct reimbursement plans, also will gain some traction, said Shores.

What's more, said Barrett, "We'll likely see more of a linkage between oral benefits as part of a total approach to health-care benefits. There will be more oral health-care therapies around coronary artery disease, obstetrics and diabetes, and we'll see a closer association between oral and medical benefits, such as disease management programs."

Outreach to retirees also will rise. "Retirees face the reality of aging and accumulated neglect on their teeth, and many take medications and have more chronic conditions that take a toll on their oral health," said Vogel.

As a result, he said, "Carriers will continue to build plans that have both service coverage and price points that retirees are looking for. We'll also be asked to monitor plans and identify individuals, retirees and actives not using the plan and send exam reminders."

But education needs to begin earlier, said Barrett. "We've implemented products that make services like orthodontics for kids more accessible and affordable. Orthodontics early has a huge impact on oral health in the latter part of life."

[GRAPHIC OMITTED]

* What's Up: In 2006, the number of individuals with dental benefits rose about 2%, but 140 million Americans still lack dental coverage.

* What's New: Insurers are designing dental products for retirees, who are increasingly losing post-retirement dental insurance.

By the Numbers: Dental Facts

98

Percentage of midsize employers (100 to 499 employees) that offer dental insurance.

1

The percentage rise in the number of employers that offered dental coverage in 2007 over 2006.

30,000

The number of Americans diagnosed with oral cancer annually.

8,000

The number of Americans that die from oral cancer each year.

38.5

The total days an average American spends brushing his or her teeth over a lifetime.

56.4

The percentage of persons age 65 and older who had a dental visit in 2000.

75+

The percentage of American adults with some form of gum disease.

59

The percentage of children ages 5 to 17 affected by tooth decay.

$2 billion

The amount spent annually by Americans on dental products.

$2

The Tooth Fairy's average reward per tooth.

Sources: Society of Human Resource Management; Delta Dental; Securian Dental Plans; Centers for Disease Control and Prevention; American Dental Association; University of Maryland Medical Center; Family Gentle Dental Care in Nebraska.

New Options

Another option retirees may choose is discount dental plans. A growing number of dental carriers are considering adding these plans to their product portfolios.

[ILLUSTRATION OMITTED]

Discount dental plans aren't insurance policies. Rather, managing organizations negotiate prices with local providers for various procedures; discounts generally are 20% to 70% off the regular American Dental Association pricing code.

The plans are quite inexpensive, said Delta Dental spokesperson Jeff Album: average individual monthly costs are under $10, but members incur higher out-of-pocket expenses than with true insurance.

Unlike traditional dental plans, there are typically no yearly maximums, waiting periods on services or claims forms. Plans often include discounts on cosmetic dentistry and orthodontics.

But there's been some fraud associated with some discount plans, said Album.

"A few dishonest dentists have been known to rack tip costs by performing unnecessary procedures, and a few discount plans have been known to be disingenuous with the size of the discounts they claim the dentists in their networks will offer," he said.

Bridging the Gap

Dental benefits have seen little substantial change over the past 50 years. "There's not much magic in dental insurance," said Gary Shores, dental product manager for Standard Insurance Co. "Plans are more simplistic than medical plans. There aren't as many moving parts, and there is a finite number of dental procedures that can be performed, unlike medical with constant changes. Dental insurance is the quiet stepchild."

[ILLUSTRATION OMITTED]

Today's dental products range from preferred provider organizations to discount plans.

PPO plans continue to have the greatest momentum, said Delta Dental spokesman Jeff Album. In 2006, 91.7 million individuals were enrolled in a dental PPO, up from 80 million in 2005. Sales of dental HMO products, however, remained flat, and dental indemnity plans continue to decline, according to a recent national enrollment survey sponsored by the National Association of Dental Plans and the Delta Dental Plans Association, he said.

There's room for growth, Album said. Currently, 140 million Americans lack dental coverage--triple the 48 million without health insurance. There's continuing competition for health-care dollars as "medical costs rise and lawmakers enact changing rules. We'll see dental carriers work hard to try and fill the gaps," he said.

Annual maximum rollovers, which allow an unused portion of the annual maximum under certain criteria to be rolled over to the following year, are gaining popularity. "Up until this year, only a handful of carriers offered that benefit. Recently, several major insurers introduced their own version," said Shores.

A growth opportunity also exists for dental products catering to small businesses with 50 or fewer workers, and for individuals, said Album.

But individual coverage often comes at a price. The National Association of Dental Plans said premiums for an individual plan are 11% to 25% higher than group coverage.

Premium increases for dental insurance have lagged significantly behind medical premiums and inflation, said Evelyn Ireland, executive director of the association. In 2006, the rate of change in group dental premiums (employee only) remained below increases in health insurance premiums, at 5.3%, according to the association's Dental Benefits Report: Premiums. Family dental premiums rose by 5.5% in 2006. The NADP expects premium increases to range between 4.7% for dental HMOs and 6.8% for dental indemnity products this year.

Learn More

Assurant

A.M. Best Company # 70135

Distribution: Agents

Delta Dental Insurance Co.

A.M. Best Company # 09147

Distribution: Agents, brokers, consultants, direct, government programs, association

Guardian Life Insurance Co. of America

A.M. Best Company # 06508

Distribution: Career agents, independent agents and brokers

Independence Holding Co.

A.M. Best Company # 58054

Distribution: Brokerage general agents, strategic partnerships with other carriers, administrators and marketing organizations

Metropolitan Life Insurance Co.

A.M. Best Company # 06704

Distribution: Career and independent agents, wirehouses, banks, affinity marketing

Standard Insurance Co.

A.M. Best Company # 07069

Distribution: Brokers, consultants

For ratings and other financial strength information visit www.ambest.com.

Dental Benefits Enrollment

1996   132,808,989   49%
1997   140,425,887   51%
1998   148,047,174   54%
1999   152,937,642   55%
2000   154,562,953   55%
2001   154,572,985   54%
2002   154,544,868   54%
2003   155,939,275   54%
2004   159,286,497   54%
2005   162,510,015   55%
2006   169,619,443   57%

In 2006, the portion of the population covered
by dental benefits grew significantly for the first
time since 1999--jumping from 55% to 57%.

Source: 2007 NADP/DDPA Enrollment Report

Note: Table made from bar graph.