Dental benefits utilization holds up despite recession"s toll on workers

The U.S. recession's effect on the usage of dental insurance ranges from slight rises to small declines, with little change in the cost and design of the benefit, experts and benefit managers say.

The pattern may become clearer later this year, experts say.

A spokeswoman for the American Dental Assn. in Chicago said its survey found more dentists' decreased incomes and gross billings decreased in the fourth quarter of 2008 vs. the third quarter. While a first-quarter 2009 ADA survey saw “a small improvement,” the results were “still bad,” Wayne Wendling, managing vp of the ADA's Health Policy Resource Center, told ADA News.

In the Midwest, the Chicago Dental Assn. surveyed 305 area residents in February, finding that 22% had a family member who needed dental work but was putting it off because they couldn't afford it.

Of those surveyed, 47% had no dental insurance. That may explain why some insurers and a major employer said they have not seen a significant change in utilization. Dental claims indicate that people with employer-provided dental benefits continue to visit the dentist.

“We have seen (dental) claims stay steady,” said Chris McSwain, director of global benefits at Whirlpool Corp. in Benton Harbor, Mich. “There's nothing in our numbers that indicates an economic downturn impact.”

“While we hear from dentists that the amount of work being done is less than it was last year, our claim activity does not show that,” said Jon Seltenheim, senior vp of customer service operations at dental insurer United Concordia Cos. Inc. in Harrisburg, Pa.

“The dentists that I speak with are saying they are having fewer requests for cosmetic procedures and in some cases are seeing openings in their hygiene schedules, which they rarely see, but it's too early to have any strong conclusions. Hopefully, we'll see some clarity in the middle part of the third quarter,” Mr. Seltenheim said.

Kevin Jackson, group vp for underwriting at San Francisco-based Delta Dental of California, New York, Pennsylvania and Affiliates, said dental utilization has increased, but “it's so nascent, I'd be reluctant to call it a trend.”

Patti Friedman, senior consultant at Watson Wyatt Worldwide in New York, said, “We're seeing in some cases where an organization has had a lot of layoffs or is considering layoffs, there has been an uptick in utilization. But overall, we don't see utilization going up.”

A first-half 2009 national health care trend survey by Buck Consultants L.L.C., which contains dental insurers' renewal projections, showed little change in utilization and rates.

“We have not seen any significant change in the trend rates being used for dental plans, despite what the ADA is reporting,” said Tony Rienzi, a principal in Buck's New York health and productivity practice.

Because 100% coverage of preventive dental care is routine in employer-paid benefits, he and others say there is no reason to expect a drop in utilization of those services.

However, Ms. Friedman said providers at onsite employer clinics were reporting fewer visits as employees were reluctant to take time away from work.

Two insurers, however, said plan members had increased their use of preventive dental services.

Alan Hirschberg, vp and head of Hartford, Conn.-based Aetna Dental in Fairfield, N.J., said a slightly higher trend in preventive services can be attributed to programs that give members financial incentives to receive preventive care.

Chris Swanker, vp of group dental and vision for New York-based Guardian Life Insurance Co. of America, said the industry's emphasis on preventive services, plan designs that stretch benefits—including allowing annual maximums to roll over—and fears of layoffs are “driving a fairly substantial increase in utilization.”

As for major services, Mr. Swanker said their use is trending about the same and data shows no indication that people have delayed undergoing major work.

Mr. Hirschberg said there has been “some trail-off” in use of higher-cost services such as orthodontia, which is covered at 50% up to a certain maximum. “There's a slowdown, not that it fell off the ledge,” he said.

As for the future, “We may be seeing some more expensive treatment done in anticipation of an uncertain job market,” Mr. Seltenheim said.

Starting late last year, there was a “resurgence” of employer interest in Aetna's dental health maintenance organization plan, Mr. Hirschberg said. “Employers who may not have looked at it before are looking at it and buying it now,” he said.

As the economy has tightened, more small employers in New York state have turned to a voluntary dental HMO instead of a standard, employer-paid preferred provider organization dental plan, said Vince Ashton, New York-based executive director of HealthPass, a purchasing cooperative for small businesses whose plans are underwritten by Guardian.

For reprints of this story, please contact Lauren Melesio at 212-210-0707 or email lmelesio@crain.com

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