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Market Overview: Senior Dental
Brenton Pyle, FSA, MAAA
Consulting Actuary
CSG Actuarial, LLC
www.csgactuarial.com
Dental Market: Overview
Senior Dental Market Overview
• Need For Care
• Market Size
• Product Design
• Projections
• Opportunity
Dental Market Overview: Need For Care
Individuals Eligible for Medicare• Majority (65%-71%) have no dental coverage
• Many (34%-49%) have not been to the dentist in the past year
• 19% of those using dental services spent $1000+ out-of-pocket
Connections between oral health and overall health• Dry mouth is side effect of many medications
• Many diseases interrelated with oral health (diabetes, osteoporosis)
• Higher rates of edentulism, untreated caries and periodontal disease among seniors
Sources: Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey, 2016; National
Health and Nutrition Examination Survey 2013-2016; NCHS, National Health Interview Survey, 2017;
Gerontological Society of America Newsletter, 2017
Dental Market Overview: Need For Care
Medicare Limitations
• Statutory exclusion of routine dental care, dental
prostheses
• Very limited circumstances when dental services covered
Efforts to add Dental to Medicare
• Cardin – January 2019 (S. 22)
• Roybal-Allard – January 2019 (H.R. 576)
• Oral Health America - ceased operations February 2019
Dental Market Overview: Market Size
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Per
cen
t C
han
ge
Year
Historical Changes in Senior Dental Coverage
Dental Coverage Senior Population Linear (Dental Coverage) Linear (Senior Population)
Sources: CSG Actuarial analysis of AHRQ Medical Expenditure Panel Surveys, 1996-2015; Census Bureau Current
Population Surveys, Annual Social and Economic Supplements, 2003-2017
Dental Market Overview: Market Size
Individuals Aged 65+
• 2018: Over 51 million
• Projected: 75 million by 2033
Turning 65 - Projected
3.4
3.6
3.8
4.0
4.2
4.4
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Mil
lio
ns
Dental Market Overview: Market Size
Public Programs
• Medicaid – eligibility expansion following
Affordable Care Act
Private Providers
• Individually purchased dental coverage
• Some Medicare Advantage plans embed dental
coverage or offer as an option
Dental Market Overview: Market Size
0%
10%
20%
30%
40%
50%
60%
Medicare Advantage Medicare Supplement Other
Seniors with Dental Coverage - 2018
Sources: CSG Actuarial analysis of Medicare Current Beneficiary Survey, 2016; Kaiser Family Foundation analysis of the
Medicare Current Beneficiary Survey, 2016; National Health and Nutrition Examination Survey 2013-2016; NCHS,
National Health Interview Survey, 2017;
Dental Market Overview: Market Size
AFLAC Grp, 19%
CIGNA HLTH GRP, 16%
UNITEDHEALTH GRP, 9%
Ameritas Mut Holding GRP, 8%HealthMarkets Grp, 6%
Guidewell Mut Holding Grp, 5%
PHYSICIANS MUT GRP, 5%
Citizens Security Life Ins Co, 5%
Manhattan Life Grp, 4%
UNUM GRP, 4%
Other (32), 19%
Individual Dental Market Share - 2018
Dental Market Overview: Product Design
Dental Product Overview
• No standardized set of benefits
• Often utilize benefit structure similar to group
coverage: annual deductible, annual maximum,
waiting periods, coinsurance
• Dental services often divided into Preventive,
Basic and Major categories
Dental Market Overview: Product Design
Service
Type
Common Dental
Procedures
Typical
CoinsuranceOther Notes
PreventiveExams, Cleanings, Bitewing
X-rays100%
Usually no waiting period, annual limit on
number of covered exams and cleanings,
costs may not count towards annual
maximum
BasicFillings, Non-surgical
extractions80%
Often subject to 3-6 month waiting period
or graduated coinsurance
MajorCrowns, Dentures, Bridges,
Root canals, Inlays/Onlays50% - 60%
Usually subject to 6-12 month waiting
period or graduated coinsurance, may
include frequency limits on timing of
dentures and denture repair services
Dental Market Overview: Product Design
Other Design Considerations
• Networks
• Lower fees charged for in-network providers
• Higher coinsurance for in-network services
• Payments for services at out-of-network providers
may be capped at in-network levels
• Estimate 55% of individual dental products include
network, another 15% offer network as option
Dental Market Overview: Product Design
Other Design Considerations
• Age Considerations
• About 40% of individual dental products available
only through age 65
• Two-thirds of products available to seniors have a
higher premium rate above age 50 or 60
Dental Market Overview: Projections
Assumptions• No material change in lapse and replacement rates
• No material change in dental cost, claim and rate increase trends
• Coverage provided will remain materially similar to current offerings
• No significant changes in delivery of dental care
• No significant changes in medical coverage
• No significant changes in the systems providing health care coverage
Dental Market Overview: Projections
Data & Methodology
• Potential purchasers: only seniors with income
exceeding 300% of Federal Poverty Level
• Average annual premium of $520: typical for
individual dental plans currently sold
• Product performance assumptions
• Loss ratios: 55%-65%
• Lifetime commissions: 15%-20%
• Pre-tax profit: 4%-10% of premium
Dental Market Overview: Projections
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
201
8
201
9
202
0
202
1
202
2
202
3
202
4
202
5
202
6
202
7
202
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202
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0
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1
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2
203
3
Ag
e 6
5+
Pop
ula
tion
(in
10
00
s)
Projected Senior Population and Dental Coverage
Senior Population Seniors with Dental Coverage
Dental Market Overview: Opportunity
Year Potential Purchasers Annual Commissions Annual Profits
2019 13,703 1,086,428 308,311
2020 14,126 1,136,795 322,604
2021 14,538 1,187,523 337,000
2022 14,967 1,240,908 352,150
2023 15,388 1,294,887 367,468
2024 15,794 1,349,003 382,825
2025 16,215 1,405,750 398,929
2026 16,607 1,461,352 414,708
2027 16,966 1,515,363 430,035
2028 17,308 1,569,012 445,260
Projected Senior Dental Opportunities (in 1000s)
Dental Market Overview
Questions?
Brenton Pyle, FSA, MAAA
Consulting Actuary
402-502-7747
18
Q&A and Discussion
