View of the Stand-Alone Dental Market

There are many stand-alone dental carriers in the market, such as Blue Cross Blue Shield Association and several regional stand-alone dental carriers. But the largest and most solidly financed are the Delta Dental Association carriers.

All stand-alone dental carriers, large or small, have the same competitive issues when it comes to premiums. Other than large employers or unions who issue RFP’s (request for proposals), stand-alone dental carriers are at a distinct disadvantage for individual, association, and small employer group policies. Why?

  1. Their competitors can quote multiple products through group quoting and enrollment systems. (i.e. MetLife, Guardian Life, Unum, and several smaller competitors).
  2. There are few, if any, online individual and group quoting and enrollment systems with up-to-date technology, the ability to connect to administrative systems, and broker and consumer portals available to stand-alone dental carriers.
  3. The quoting and enrollment systems in the market do not have the ability to quote multiple products such as vision, life, or accident policies on the same platform.
  4. Even if they did have a quoting and enrollment platform to handle multiple products, many Delta Dental plans, and regional stand-alone dental plans, are not chartered or licensed to sell or offer multiple products.
  5. Most Delta Dental carriers are not licensed as TPAs, so they cannot provide these services, even if their administrative systems could invoice and administer multiple products.

What is required for the stand-alone dental carriers to remain competitive in individual and small group markets for the long-term?

  • They must acquire the latest technology for individual and group quoting and enrollment platforms, and program their present systems to accept data files from the new platform.
  • They could either change their charters and become licensed to sell multiple products and TPA services, or partner with someone who is already licensed to provide these services.

If they choose to produce and acquire, the following must be considered:

  • What is the cost of the software technology?
  • Not knowing until after the cost are incurred if the newly purchased technology will work as advertised and be accepted by the brokers.
  • The cost and time for training employees to operate these new technologies.
  • It could take from 9 to 18 months to market for the acquisition and training of brokers and employees to use these new technologies.

The bottom line for stand-alone dental carriers seems to be a decision to build the technology themselves, buy the technology from someone who has it, or find a willing partner who has the technology currently in operation. Each has its pros and cons, but time to market would be my main consideration in each option.

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