Segal: Dental Costs Remain Low

July 20, 2004 ( plans seem to have avoided the large increases in costs that have been the norm in medical and prescription drug plans in the previous years, with both past and projected growth in the single digits.

The dental per capita claims cost was up by 5.8% in 2002 across all plan types while the total premium rates only increased by 2.7%, according to the fourth report in the 2003 Segal State Health Benefit Survey series, Drilling Down on Dental Plan Coverage, which covers dental benefits for state employees. Segal predicted slow growth in this are as well, with the 2004 Health Plan Cost Trend Survey estimating a trend rate of 7.4% for fee-for-service indemnity plans, 6.8% for dental preferred provider organizations (DPOs), and 5.2% for dental health management organizations (DMOs).

According to the survey, dental costs remain low because “dental trends are closely correlated to the price inflation of services, as utilization is relatively stable. Additionally, strides made in dental hygiene and disease prevention keeps cost increases relatively low.”

The survey also found that for participating states, the average, per-person, monthly premium for employee-only coverage was $23.44 in 2002, with a low of $5.95 inTexas to $56.59 in Oregon . The average monthly premium for employee and family coverage ranged from $15.89 in Texas to $102.42 in New Jersey , with an average of $62.87. The average per-employee composite dental premium, which the survey describes as a blend of employee only and employee-and-family coverage, was $40 monthly or $480 annually.

Approximately 42% of the states in the survey have dental programs that do not require a deductible, but for those that do, the deductibles range from $25 to $125 for employee-only coverage, with Indemnity having the highest average deductible at $54 and DMOs with the lowest deductible at $25.

All managed dental programs have an annual benefit maximum that ranged between $1,000 and $2,000 for employee-only coverage. For indemnity programs, 25% have an annual maximum of $1,500 or more, 42% have a limit between $1,000 and $1,499, and 17% each have either a limit less than $1,000 or have no maximum limit.

Of the four types of dental benefits, states most commonly offer indemnity plans (36%), followed by DPOs (33%), scheduled benefit plans (21%), and lastly, DMOs (9%).

The first three reports from the Segal survey focused on medical benefits for employees and retirees, prescription drug coverage for employees and retirees and medical plan design for employees and retirees, respectively (See Segal: Health-Care Costs Equal 16% of State Employee Wages ; Segal: State Plans Suffer High Drug Costs Too ; Segal: Plan Design Holds the Key to State Health-Care Costs )