Financing Mechanisms for the Senior Dental Market

Dr. Kathy O’Loughlin, Moderator

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The Panel

• Lowell Daun, DDS – Senior Vice President, Delta Dental of California

– Government/Non-Group Market

• John Baackes – CEO, Senior Whole Health

– Dual Eligible Market

• John Brouder – Partner, Boston Benefit Partners

– Commercial Market

3

The Market• Seniors = 76 million Baby Boomers• Affluent

– Independent– Higher level of education– Healthy– Higher utilization of services– With financial resources

• Middle Class– Culturally diverse– Independent, healthy, limited resources, price sensitive

• Poor– Frail– Lower utilization of services– Dependent– Poor health/Complex health issues– No financial resources

4

National Health Expenditures, 2002

(CMS, August 2004)

36%

4%12%10%3%5%

3%

36%

Hospital Medical Products

Rx Nursing Home, Home Health

Other Personal Dental

Other Professional MD

Dental

5

Dental Services by Source of Payment, 2002

(CMS, August 2004)

44%

1%3%1%

50%

1%

Out of Pocket Other Public MedicaidMedicare Private Health Insurance Other Private

<

<

<

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Sources of Financing

• Self Pay – Out of Pocket

• Social Security

– Medicare

– Medicaid

• Health Insurance Corporations

– Employer-based

– Group or Non-Group

– Voluntary or Contributions

• Discount Plans/Cards

• Dental Annuity/Health Savings Accounts

7

Government Financing Mechanisms

• Federal Employees Retiree Programs

• Retired Military

• Medicare

– Medically necessary dental care only

– <1% of Medicare tax dollars

– Part D for dental care/pharmacy

• Medicaid

– Title XIX of Social Security Act

– Varies from state to state

– Poor elderly only

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Massachusetts

• M.G.L. Chapter 58

• The Connector Authority

• Commonwealth Care and Commonwealth Choice

• 600,000 Adults have dental and vision benefits

• 50,000 newly eligible have dental benefits

• Employers: provide coverage for 550,000 uninsured over next three years

9

Health Care Reform

• Dental is an inseparable part of health and overall wellness – 89% of consumers surveyed agree on medical/dental connection

• Dental is different: 3rd party carriers add value with negotiated fee arrangements

• Dental coverage creates affordable access for millions of Americans – 164 million

• Large untapped market: Nearly half of population lacks a dental benefit