Broker blog from Delta Dental

Category: Individual dental coverage

What drives buyers of individual Delta Dental plans?

As you’re probably well aware, attracting new clients and pinpointing their needs can be challenging. To help you, Delta Dental recently explored the characteristics of people who buy individual dental plans.

PPO versus DHMO dental plans: What’s the difference?

A PPO plan, or fee-for-service plan, is a network-based plan in which enrollees can visit any licensed dentist, although they’ll save more by visiting an in-network dentist. These plans usually have annual deductibles and plan maximums.

A DHMO plan is a prepaid dental benefits product in which enrollees usually must visit their selected primary care general dentist to receive benefits. These plans have no annual deductibles or plan maximums — enrollees pay a fixed copayment amount for covered procedures.

Who buys individual dental insurance?

Anyone who has either had an employer-sponsored dental plan or bought an individual dental plan in the past is a potential client. Even clients who currently have individual dental insurance may be willing to change or update their coverage to get better rates or richer benefits.

DHMO buyers are more likely than PPO buyers to be switching from one individual dental plan to another. PPO buyers are usually transitioning to an individual plan from employer-based group dental coverage. Not surprisingly, the most common reason for this is because they retired from a job and lost their coverage.

What are some major drivers for dental insurance buyers?

Clients shopping for individual dental insurance obviously care about their dental health. That’s why for both PPO and DMHO buyers, having coverage for preventive care and being able to maintain the appearance of their teeth are the two most important factors in their decision to buy.

For PPO buyers, key factors include a dentist network that allows them to keep their current dentist. Consider suggesting plans that offer a large dentist network, which increases the likelihood that their dentist participates in the plan. PPO buyers also like to stick with what they know — we find that familiarity with a brand is an important factor in choosing a dental plan.

Among DHMO buyers, cost and value are more important. Key factors for purchase include low out-of-pocket costs, lowest price and the best coverage for the price.

Income may help you determine which products to consider for your clients. For clients with higher incomes, consider PPO plans, because we’ve found that these clients usually want the flexibility to see the dentist of their choice. Brand recognition is also important.

For clients who earn less, a DHMO plan may be a better option. Both cost and the ability to meet dental care needs are important to these clients, so knowing ahead of time how much a procedure will cost — and being able to plan and prioritize care accordingly — could be a plus.

For all clients, consider bundling offerings. Dental insurance buyers may also be interested in medical and vision insurance. However, they tend to be less interested in other types of insurance, such as life, disability, accident or pet insurance.

How do buyers like to shop?

According to a recent survey, the broker channel is a preferred method among American insurance buyers, with 43% selecting a broker or agent as a favorite option. That rate was higher among baby boomer and Generation X buyers, 61% of whom purchased insurance from a broker. Among millennials, 23% said they used an agent or broker to buy insurance.

The most popular shopping method overall was online, and most of the buyers surveyed said they used more than one channel to shop.

Among the most influential factors when shopping were an easy application process, followed by trust in the brand.

Is there anything else about buyers that I should be aware of?

Our research indicates that all buyers have a similar perception about value of dental insurance. They believe that dental insurance saves money on unexpected costs and makes visiting a dentist more affordable. Both direct PPO and DHMO buyers agree — dental insurance is a smart financial choice.

Selling dental insurance to the Asian American and Pacific Islander market

May is Asian American and Pacific Islander Heritage Month. So what better time to learn more about this diverse community and how to better serve your current and prospective Asian American and Pacific Islander (AAPI) individual clients?

Perhaps more than any other group, the AAPI community presents opportunities for dental insurance brokers who sell directly to individuals.

That’s intriguing. But when we say “AAPI,” who are we talking about, exactly?

While this can be a complicated and somewhat divisive question, AAPI is all people of Asian, Asian American or Pacific Islander ancestry, according to The Asian Pacific Institute.

This can include people with origins from:

  • East Asia (including China, Japan and Korea)
  • Southeast Asia (including Indonesia, Thailand, the Philippines and Vietnam)
  • South Asia (including India and Pakistan)
  • Central Asia (including Afghanistan and Mongolia)
  • Hawaii and the Pacific Islands

In all, more than 50 countries fall under the AAPI umbrella.

Wow, that covers a lot of people. How do I cater to such a diverse group?

Not surprisingly, finding a “one-size-fits all” approach to attract and support AAPI clients probably isn’t realistic. For example, different Asian American and Pacific Islander groups vary widely in terms of income, education level, languages spoken and English fluency, and determining the specific needs of the AAPI population in your area will require some research on your part.

That said, a recent Nielsen report found some commonalities among Asian American consumers’ demographics, media preferences and buying habits.

They’re asking about you.

Broker tip: Building loyalty with your AAPI clients is important, not only to retain their business but also to attract new customers from their network of family, friends and neighbors.

When it comes to doing business with the AAPI community, positive recommendations — from friends, family and the internet — are critical.

  • More than 40% of Asian Americans surveyed said family members influence their buying decisions
  • Almost 30% said that they prefer to buy products and services their friends approve of
  • Almost 75% said that they read online reviews by others before making a purchase 

Speaking of family, AAPI households tend to be large. And affluent.

Broker tips:

  • Successfully attracting one AAPI client could potentially lead to a lasting business relationship with the client’s extended family.
  • Discuss dental plans for families and for seniors.

The AAPI community has a higher-than-average household income of $85,000, compared to $60,000 for the total population. Asians also have the highest top and median incomes among any U.S. population.

An important caveat is that there’s a large income disparity among specific groups within the AAPI community. For example, a recent Pew Research study found the following:

  • Asians at the top of their income distribution earn more than 10 times more than Asians at the bottom
  • Indian households have a much higher than average household income and rate of college graduation ($100,000 and 72%)
  • For certain Southeast and Central Asian populations, the poverty rate is as high as 35%

One of the reasons AAPI households earn more on average than the overall population is size. They’re 17% larger than the average U.S. household and are often multigenerational.

The multigenerational element is important, because heads of AAPI households are more likely than other populations to make purchase decisions for the entire household, including their spouses, children, parents and relatives.

The AAPI community loves technology and media.

Broker tips:

  • Consider targeted television and internet advertising to attract new clients.
  • Maintain an online presence, including social media accounts and an attractive, useful and up-to-date website optimized for mobile use.

Not only do AAPI households tend to be larger than the U.S. average, these households also tend to be wired. Among AAPI households:

  • 99% have internet access
  • 97% have a smartphone
  • 89% have a computer, which is 13% higher than the overall population

And they use these devices. A lot. AAPI households spend more time than average surfing the web on their computers, social networking on their smartphones, watching video on both computers and tablets, and shopping online.

  • The AAPI community shops online at a rate 34% higher than the total population
  • Almost 90% have purchased a product or service online in the past year

The AAPI community also spends another 23 hours per week watching television — more than any other group in the U.S.

Language can be tricky.

Broker tips:

  • Determine both the ethnic groups and age groups within the AAPI community you want to target.
  • Depending on which demographic you want to reach, advertising on native-language media outlets, such as cable channels, radio, magazines, newspapers, and online and social media, might make sense.
  • To attract younger clients, conventional English-language advertising, or a mix of both, might be more effective.
  • If you have a staff, determine whether anyone speaks a relevant language and if not, consider hiring someone who does.

For both marketing and interactions, language can be a challenge. Unlike other groups that share a single language, the AAPI community speaks more than 50 languages and thousands of dialects.

Of course, many members of the AAPI community also speak English — among native Hawaiians, that number is nearly 100%. But English literacy differs greatly between immigrants and those born in the United States. 

The key factor here is age. For example, among Asian Americans and Pacific Islanders under the age of the 35:

  • 34% were born outside the U.S.
  • 95% percent speak English well or exclusively

Contrast that with ages 55 and older:

  • Approximately 85% were born outside the U.S.
  • For several communities, such as Thai and Vietnamese, the number who were foreign-born approaches 100%
  • 56% have limited English proficiency (and more than 85% for certain groups, such as Vietnamese and Hmong)
  • Only 15% speak English at home

Attracting and working with older AAPI clients might then seem daunting. But a bit of community research can help. Find out who the largest AAPI population is in your community and focus on them. If there are several, Bill Imada, Founder and Chairman of AAPI-focused ad agency the IW Group, advises starting with one group, learning from your experience, and then using the lessons learned to focus on others.

And when you advertise, be sure to feature images of Asian Americans and Pacific Islanders. A recent Porter Novelli report found that people who didn’t feel represented in a company’s marketing were less likely to support that company.

Finally, if you have a staff, find out if anyone is at least partly fluent in a relevant language — you might already have an invaluable resource and not even know it!

Being able to communicate effectively with these clients is important. That’s because insurance brokers often play an essential role in the providing the AAPI community with access to the health and dental coverage they need. For example, according to recent data about California’s insurance marketplace, most Chinese, Korean and Vietnamese enrollees buy plans through certified insurance agents, as opposed to community groups or the Covered California website.

Support the AAPI community

Broker tip: Support your local community and work with organizations that serve it.

Family and community are very important to the AAPI community, and more than half said they’re more likely to purchase brands that support a cause they care about.

With that in mind, a great way to promote yourself and your business is to support local and national organizations that help the AAPI community. Certainly, a cash contribution is always welcome, but other suggestions for getting out and making a difference are:

  • Working with a local organization to expand dental access to the community
  • Volunteering or collaborating on an outreach project to help recent immigrants navigate the individual health and dental insurance market
  • Advertising or sponsoring an event to promote dental care

Some local and national organizations that serve the Asian and Pacific Islander communities include:

That’s helpful. But what else can Delta Dental do to help me?

Older Asian Americans and recently arrived immigrants can face challenges accessing oral health care. They might be unfamiliar with the U.S. health care system and have difficulty communicating in English.

Fortunately, Delta Dental offers materials and services that can help you make it easier for them:

  • The Language Assistance Program. Through this free service, your clients can get professional translation and interpretive services. This includes phone assistance, written materials and more. They can even request in-person interpreter services for dental visits, with 72 hours’ notice.
  • The Find a Dentist tool. Your clients can search for dentists who meet their specific language needs, such as Chinese or Tagalog. You can even use the directory to compile a list for them.

Supporting an individual client base as diverse as the AAPI community can be a challenge. But with some research and some help from Delta Dental, you can create strong relationships that can last for years, and perhaps even generations, to come.

The Supreme Court nomination and the ACA: What’s at stake for dental insurance

In the case of California v. Texas, scheduled to be heard before the United States Supreme Court on November 10, parties challenging the Affordable Care Act (ACA) seek to overturn the law as unconstitutional. What might this case mean for the future of the ACA and insurance more widely?

The usual questions surrounding the outcome of this case have been complicated by the appointment of Amy Coney Barrett, a new justice to the Supreme Court, nominated by President Donald Trump.

What’s at stake for the ACA?

The elimination of the ACA could have significant consequences, including:

  • Decreases or complete loss of state and federal Exchange enrollment, adult Medicaid enrollment and commercial enrollment of dependents up to age 26
  • A reduction or elimination of individual health insurance subsidies, which could erode Exchange enrollment
  • A reduction or elimination of dental benefits for adults in Medicaid

So what’s California v. Texas about, anyway?

The state of Texas, along with a group of other states and individual plaintiffs, is arguing that the ACA is unconstitutional. Specifically, they say that the 2017 changes to tax law, eliminating the penalty for failure to purchase health coverage, essentially eliminated the individual mandate, upon which the entire law depended.

Originally, the individual mandate required most people to have health insurance coverage. It penalized those who failed to comply by requiring them to pay a financial penalty to the IRS. The 2017 Tax Cuts and Jobs Act eliminated the financial penalty, but left the mandate in place.

The Texas-led plaintiffs argue that because the mandate no longer produces revenue for the federal government, it’s unconstitutional. Further, they say that the mandate can’t be severed from the rest of the ACA, so if the mandate is unconstitutional, the entire ACA is unconstitutional.

In December of 2018, a U.S. District Court judge in Texas agreed. In 2019, the case went to the U.S. Court of Appeals for the Fifth Circuit. That court agreed with the District Court’s decision that the mandate was unconstitutional, but didn’t rule on whether the mandate was inseverable. 

On the other side, California, together with a group of 18 other states, is defending the ACA.

In an unusual move, the federal government is siding with Texas, though offering arguments to allow some elements of the ACA to continue.

The Supreme Court has agreed to hear the case, scheduled for November 10. It will decide whether the Texas case has merit, whether the mandate is unconstitutional and, if so, whether this invalidates the entire ACA, or whether to let lower courts rule on severability.

Why a new Supreme Court justice matters

Justice Amy Coney Barrett has been confirmed and will fill a vacant seat on the Supreme Court. 

Barrett was formerly a circuit judge on the U.S. Court of Appeals for the Seventh Circuit. She’s considered a political conservative and constitutional originalist, which means she believes the U.S. Constitution should be interpreted as it was understood at the time it was written. As a judge, she has also ruled against the ACA in the past. She replaces Justice Ruth Bader Ginsburg, known for being one of the Supreme Court’s most liberal justices.

What specifically Barrett’s confirmation means in terms of a ruling is unclear, said Jeff Album, Vice President of Public & Government Affairs for Delta Dental.

“We’re not sure how the conservative judges are going to hear this particular case,” Album said. “Conservatives are thought to be originalists or strict interpretationists, and if they were truly to follow an originalist philosophy, striking the entirety of the ACA is not consistent with that.”

That’s because, Album said, if Congress had intended to overturn the ACA, the 2017 tax cut bill would have explicitly called for such an overturn, and the merits of that debated openly in hearings. That this didn’t happen speaks to the intent of Congress, which is an important consideration for a Supreme Court reaching a decision based on originalist thinking.

“Strict interpretationists are loath to reverse an act of Congress,” Album said. “They don’t want to counter Congressional intent, and they certainly don’t want to legislate from the bench. And if you listen to remarks that Amy Barrett has been making in the hearings, she’s gone out of her way to say she doesn’t believe that it’s a judges’ job to do anything other than enforce the Constitution and enforce the law.”

Still, that’s not a guarantee that Barrett will rule to preserve the ACA, Album said.

“We know that Amy Barrett is not fond of the ACA,” Album said. “She’s ruled against it many times, so she already has that track record.”

So what if the ACA is struck down? Then what?

If the Supreme Court rules to strike the entire bill, the impacts are “going to be profound,” Album said.

In that scenario, blue states such as California, New York, Massachusetts and Maryland would pass state laws to attempt to preserve some elements of the ACA, Album said, but they might lack federal support for the subsidies people depend on to afford those programs. Few red states, meanwhile, would be prepared to run their own Exchanges without the federally facilitated marketplace. This could lead to enrollment in Exchanges dropping substantially, Album said.

And this could lead to substantial enrollment declines for insurance companies with sizeable managed Medicaid and Exchange business.

About 1.9 million adults who have purchased optional, non-subsidized dental benefits in the Exchanges could lose their coverage. Young adults between the ages of 19 and 26 who were added to commercial employer coverage as a result of the ACA will lose that coverage if the ACA is completely struck.

Congress could decide to provide relief, but its ability to do so is dependent on the results of the November election. We’ll take a closer look at what the election results could mean for these issues in an upcoming article.

However…

Regardless of what happens, Album said, don’t expect anything to happen any time soon. Following the California v. Texas hearing in November, the decision won’t be announced until April or May, and possibly as late as June.

And if the Court agrees that the mandate is severable and sends that question back down to the lower courts, it could take years before that outcome and the additional legal challenges it will face.

A final twist is that while the current administration is arguing that the mandate should be struck down, it’s also urging that lower courts rule which provisions should and shouldn’t be invalidated.

“Even the Trump administration has suggested, and perhaps will argue in the Supreme Court, that some things should be left alone,” Album said. “We just don’t know which things they would cherry-pick in terms of what should be inseverable and what shouldn’t.”

Note: This post was updated to note Barrett’s confirmation to the Supreme Court on October 26.

Policy pops: How does dental fit into the gig economy?

3‑minute read

Join our guest blogger, Devin McBrayer, as she explores the role of dental benefits in the fast-growing gig economy. Devin is a Legislative and Policy Analyst based in Sacramento, California.

The large majority of Americans have dental benefits — 77% in fact, according to the National Association of Dental Plans. Most Americans receive this coverage through their employer or groups like AARP. However, the job market is changing. Each year, more Americans are leaving traditional workplaces to join the gig economy and be their own boss. This shift could change the landscape of the benefits industry in the very near future. 

Who’s in the gig economy?

Nearly one quarter of Americans earn some or all of their income in the gig economy, Edison Research estimates. Not surprisingly, a 2019 survey by Bankrate shows that almost half of Millennial workers work in the gig economy in some capacity. While that’s more than any other generation, a 2018 Prudential study notes that Gen X‑ers work the most hours per week in their gig jobs of any generation and are also more likely to rely exclusively on gig work for income. Baby boomers tend to use gig work to make extra money in retirement. 

Do gig jobs offer dental benefits?

The increasing number of Americans working odd jobs for TaskRabbit or driving for Uber may not receive traditional employee benefits, including dental coverage. That can cause anxiety, when an estimated 44% of American gig workers rely on the gig economy as the sole source of their income. Gig workers might be able to afford to purchase individual dental coverage directly from a carrier or through their state’s exchange, but for some, that coverage might be more than they can afford. A 2017 study by Freelancers Union & Upwork found that over half of freelancers dipped into their savings each month to make ends meet.

On the other end of the spectrum, the gig economy workers using their gig to supplement their income from a more traditional employer may already have dental benefits from their primary job. If not, they may actually use the extra cash to purchase individual coverage.

What does the trend mean for benefits brokers?

Gig workers, especially those who have never had access to employer-sponsored benefits, may need education about the value of dental coverage. Adults with dental benefits are more likely to visit the dentist and seek preventive care, according to the 2017 Delta Dental Plans Association, Adult Oral Health and Well-being Survey. Routine dental exams can detect health problems early and lower the risk for costly conditions down the road like crowns, implants or even oral cancers. 

The rise of the gig economy could also change the way that dental benefits are sold to this population. For workers in the gig economy exclusively, individual dental plans with competitive coverage and pricing will become increasingly important. Many gig workers use apps like Lyft and Postmates to earn money, which may signal that they’re more likely to purchase insurance online and look for plans geared toward tech-savvy consumers. 

For more thought leadership from Delta Dental, subscribe to Insider Update, our newsletter for brokers, agents and consultants.

If you’re a benefits decision maker, administrator or HR professional, subscribe to our group newsletter, Word of Mouth.

Policy pops: Health care exchanges — 2019 enrollment results

3‑minute read

Join our guest blogger, Devin McBrayer, as she reviews the outcomes of the 2019 open enrollment period for health care exchanges. Devin is a Legislative and Policy Analyst based in Sacramento, California.

The open enrollment period to purchase Affordable Care Act (ACA)-compliant individual health insurance coverage off the health insurance exchanges for 2019 has come to an end. Sign-ups were off to a slow start at the beginning of the enrollment period, leaving many experts fearful that ACA plans would experience a significant decrease in enrollment. However, total enrollment only decreased by about 3.8% nationwide on Healthcare.gov, much of this due to a 15% reduction in new sign-ups. 

While the total enrollment drop in individual health insurance plans on the exchange may have been less drastic than expected, it is still worth exploring why new enrollment decreased considerably and why year-to-year enrollment continues to decline. Several 2018 policy changes, combined with a growing economy, could help explain the decrease in enrollment in ACA plans for the 2019 plan year. 

Are policy changes to blame?

In 2018, Congress reduced the tax penalty for not having an ACA-compliant health insurance plan to zero, effectively eliminating it. The federal government also shortened the open enrollment period and reduced marketing for open enrollment. Simultaneously, the federal government passed several rules that expanded the availability of cheaper and less comprehensive insurance plans such as short-term limited duration plans. No tax penalty for lack of coverage, combined with a shorter sign-up period and more plan options outside the exchanges, may help explain the enrollment decrease.

The impact of the economy

Another possible explanation for the drop in enrollment could be attributed to an improving economy. When open enrollment started on November 1, 2018, 2 million more jobs were added to the economy than were added at the same time in 2017. As more people head back to work, it’s possible that they’re gaining access to employer-sponsored health insurance, eliminating the need to renew their ACA plan. 

What does this mean for dental?

Any loss in enrollment for medical coverage also means less people enrolled in dental coverage on the exchange. (As a reminder, dental coverage is an essential health benefit for children but not for adults.) 

In the exchanges, dental coverage is included in some health plans or consumers can get a stand-alone dental plan and pay a separate premium. However, there is no way for consumers to purchase a stand-alone dental plan without also purchasing a medical plan on the health care exchange. Pushing for states and the federal government to allow for the independent purchase of stand-alone dental plans on state and federal health insurance exchanges is a top priority for the Public & Government Affairs team at Delta Dental.

For more thought leadership from Delta Dental, subscribe to Insider Update, our newsletter for brokers, agents and consultants.

If you’re a benefits decision maker, administrator or HR professional, subscribe to our group newsletter, Word of Mouth.

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