Dental Benefit Pricing
Underwriters consider plan design, dental care costs, trends, group characteristics, funding sources, and administrative expenses when developing the pricing for a proposal.
Benefit elements such as coinsurance levels, copayment amounts, maximums, deductibles, waiting periods, limitations, and exclusions are all levers used to control price. Generally, the more the plan covers, the higher the premium rate. When comparing pricing, consider the following:
- Does the plan design encourage the employee to seek preventive care, which can favorably impact overall health?
- What are the differences in limitations, exclusions and frequencies?
- Are the same procedures covered in the same category of care? Some can be moved between basic services and major services which can affect your rates.
Dentist Care Costs
The plan design offered and the network utilized as well as enrollees' expected utilization of contracted dentist facilities can cause premiums to vary due to the contracted dentist fee agreements and how they impact claims costs. When comparing pricing, consider the following:
- How are network dentists reimbursed?
- How does access compare? Will there be network disruption?
- What coverage is offered when patients attend non-network dentists?
Dental Cost Trends
Most carriers look at annual dental fee trends to determine to what extent professional fees are increasing. Trend percentages between carriers will vary due to the type of network used and established fee monitoring and control. When comparing pricing, consider the following:
- What trend percentage was used?
- How could this impact renewal rates?
This includes industry type, number of company locations, previous claims history and number of employees.
Source of Funding
The ratio of employer to employee contribution affects the price. Higher employee contributions can reduce enrollment and may also affect the utilization patterns. Carriers quoting a dual choice option (between a PPO and DHMO, for example) must also estimate the number of employees that will sign up for each option.
The cost of a plan is determined not only by claims costs but also by administrative expenses. The level of services offered may impact the overall premium rates. Some carriers reduce their administrative rates by not offering a wide array of cost and quality controls or professional oversight. When comparing pricing, consider the following:
- What services are included?
- Will there be an assigned account manager?
- What reporting packages are provided?