The Affordable Care Act (ACA) has greatly increased the number of people with dental coverage. According to the American Dental Association, 8.7 million children and 17.7 million adults may gain some form of dental coverage under this law. Unfortunately, the increase in the number of people seeing the dentist could drive up dental costs. It’s really an issue of supply and demand.
It is estimated that the ACA will increase dental spending in the U.S. by $4 billion a year, and this comes at a time when there are already not enough dentists. While there is no guarantee that this increase in spending will lead to increased dental costs, it’s important to be prepared so you can continue to provide a strong benefits package and manage your budget. Here are some ways for you to offer competitive dental coverage despite rising costs.
Share the Cost With Your Employees
Rising dental costs might make it impossible for your company to bear 100 percent of your dental plan’s costs. If this is the case, it’s reasonable to choose a plan that requires your employees to pay part of the tab. For example, you can pick a plan with a higher annual deductible, which means your employees will need to pay more out of pocket each year before their insurance kicks in and pays for covered treatments. Another option is to choose a cost-sharing plan where your employees pay a higher percentage of the cost for each treatment. Both options lower the monthly or annual premiums that you would need to pay for your plan.
Whenever you consider a cost-sharing arrangement, make sure that your plan still offers generous coverage for preventive care such as cleanings and X-rays. It makes sense to cover 100 percent of these services every year. These treatments can pay for themselves by preventing more serious and more expensive dental problems down the road.
Set an Annual Limit
Another way to manage costs is to set a maximum limit to the amount your plan will cover each year. For example, your plan might cover treatment up to a maximum of $2,000 per year for an employee and their dependents. An employee would then need to cover any costs over this amount out of their own pocket. This way, even if dental costs shoot up, you still keep the same dental budget. At the same time, this would also encourage employees to be smarter shoppers when it comes to dental treatment. Since they know their plan will only cover a fixed amount, they may be more likely to compare their options before signing up for treatment.
Consider an HMO or a PPO Plan
Health maintenance organization (HMO) and preferred provider organization (PPO) dental plans use a network of approved dentists that have agreed to a lower fee structure. As a result, these plans offer dental coverage at a lower cost. An HMO plan is the least expensive option, but it restricts your employees to only seeing dentists in the network. With a PPO plan, they can still see dentists outside the network if they pay more out of pocket. Either approach lets you offer dental care at a lower cost than fee-for-service plans, which allow employees to see any dentist they want.
Educate Your Employees
If you’re thinking about changing your dental benefits, your employees need to be part of the discussion. Let them know that dental costs could be going up in the future, and you are reviewing all your options to ensure that you can still offer a competitive plan. Take the opportunity to ask what changes your employees would prefer. For example, would they rather pay more out of pocket for a plan with no dental network, or would they prefer a lower-cost HMO plan, even though it would restrict which dentists they could see?
You should also explain to them how they can do their part to keep costs down. Highlight the importance of preventive care—both for maintaining good oral health and for preventing more costly problems down the road. Point out that the cost of preventive care is mostly (if not 100 percent) covered by typical dental plans. You should also request that employees compare prices at different dentists for more serious treatments. In the future, your employees will need to play their part to keep costs down.
Hopefully, the cost of dental care will not increase dramatically in the future, even with the fallout from the ACA. However, by following these strategies you’ll be ready, just in case.