Dental Health Care In America – A Case Of Lower Returns For Higher Prices

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Health care at affordable prices is the mantra every welfare state seeks to bequeath on its citizens. All over the world, affordable quality healthcare is increasingly occupying the attention of the policy-framers and America is no exception to the same. Yet for the entire hullabaloo surrounding the health care, it is an ironic paradox that dental coverage has escaped attention. Over the past two decades standard dental coverage has remained immutable that translates naturally into an increased personal out of pocket consumer expenditure.

Why is dental care expenditure increasing?

Inflation and decreasing value of the dollar in consonance with other global factors has led to a dramatic escalation of dental care expenses. This is more so owing to the dental insurance benefits and restrictions on the benefits accrued from the dental health plans remaining stagnant. This escalation is marked by the surge of dental expenditure from $270 in 1996 to $332 in 2008 (data courtesy American Dental Association).

The report attributes it primarily to a combination of three forces at work concurrently:

Unemployment:

1. Rising unemployment implies lower decreased income levels.
2. With the health care costs escalating by astronomical proportions, it is becoming increasingly impossible for consumers to opt for dental insurance plans.
3. Subsequently any dental treatment entails expenditure borne wholly by the consumer.
4. Unemployment also entails lower purchasing power and thereof a sluggish economy.
5. Job cuts, downsizing and outsourcing are natural outcomes of unemployment.
6. This then translates directly into a loss of group insurance plans which are more affordable and provide more benefits.
7. Subsequently a significant proportion of consumers who fail to find immediate employment opt out of securing a dental insurance plan.

Naturally this translates into the surge in the form of direct dental care expenses.

Gradual reduction in firms offering dental benefits:

1. The report points out that the dental insurance market is witnessing a gradual erosion of the percentage of firms that offer dental benefits.
2. The report quotes the Census Bureau report that observed that 69.2 % of employers offered health benefits in 2000.
3. The corresponding number for 2010 plummeted to 58.6 %.
4. Lesser companies entail lesser competition and enjoy an increasing monopoly of the firms that are able to weather the economic downside.
5. Subsequently the law of demand comes into operation with more demand and less supply leading to an upward surge in dental benefit plans and a downward surge in the benefits offered.

Cost cutting strategies by firms:

1. The ADA report points out that the sluggish economy and global recession has set in firmly, showing no signs of recovery.
2. The firms shift the burden of costs to the customers.
3. Lower revenue models and slow recovery entails that the firms must rethink their expenses to survive.
4. Thereof, the Kaiser Family Foundation and the Health Research and Educational Trust concludes on the basis of  a survey conducted in 2010 that employers are gradually limiting and reducing the health benefits such that the out of pocket expenses increase proportionally.
5. Or the employers are providing the same benefits offered previously at lower contributions to a higher price and hence greater expenditure for the same benefit.

This article is submitted by Judith Jones. She is a certified healthcare professional who gives useful health and insurance tips to his readers.

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