AUTHOR: MARK BORCA, VICE PRESIDENT OF BUSINESS DEVELOPMENT
For Medicare Advantage (MA) managed care plans, the decision on whether to add Medicare dental coverage is a roll of the dice.
On the plus side, if adding dental helps the plan pull members away from other managed care organizations (MCOs) and increase market share, it can be a huge win. Look at the math.
For the sake of argument, say there are 12,000 eligible members in an area paying $400 per member per month (pmpm). If adding Medicare dental can attract just 1% of those members away from other plans, that’s 120 new members, adding $48,000 per month, or more than half a million dollars per year, to top line revenue. That’s a pretty compelling case.
On the downside, since there is no upcharge to members for adding Medicare dental to an MA plan, if the strategy doesn’t work and no (or not enough) new members come on board, the MA plan can end up losing money. That’s why they call it gambling.
How do you know whether it’s worth the risk? The first thing to look at is the competitive landscape. Is anyone else in that region offering dental as part of their MA plan? If not, including Medicare dental can be an obvious differentiator. Conversely, if everyone else is offering that benefit it won’t be a differentiator and is unlikely to draw anyone new. So it may be best to put that money elsewhere.
If the market opportunity is there to add Medicare dental, one thing to keep in mind is to ensure everyone knows what is and isn’t included in the program. That includes brokers and other salespeople, incidentally.
Traditionally, most Medicare Advantage MCO’s create a basic program that includes an oral exam, teeth cleaning and X-ray at no cost to the member. Any and all additional services the dentist performs, however, are billed at the provider’s usual and customary rate. Many retirees who had dental through their employers are used to having additional services covered, so it’s important to ensure they understand that those services will now be coming out of their own pockets.
Adding Medicare dental to your MA plan is a roll of the dice under any circumstances. But when you work with the right benefit administration company, it’s like the dice are loaded in your favor.