Dental Insurance in the US Industry Market Research Report Now Available from IBISWorld
New York, NY (PRWEB) January 09, 2014 -- Dental insurance currently accounts for 9.1% of the broader Health and Medical Insurance industry (IBISWorld report 52411b). According to IBISWorld Industry Analyst Stephen Hoopes, “An estimated 16.0% of domestic consumers lack medical insurance; while estimates of the share of consumers lacking dental insurance range from 26.0% to 42.0%, there exists a drastic difference between the two types of healthcare coverage.” Dental insurance largely focuses on covering regular maintenance and preventative oral health treatments, while medical insurance emphasizes the coverage of unpredictable and urgent health ailments. Consequently, dental care costs and industry revenue are typically more stable than medical costs.
Over the past five years, a consistent increase in healthcare expenditure (i.e. medical-cost inflation) boosted industry premiums and drove revenue growth. However, lower policy enrollment figures during the recession mitigated the Dental Insurance industry's performance over the period. As such, industry revenue is expected to increase at an annualized rate of only 1.2% over the five years to 2013, to reach $56.3 billion.
Rising unemployment during the recession directly damaged industry revenue through declines in group coverage and indirectly through lower per capita disposable income. Moreover, mounting competition from direct reimbursement and discount dental plans have tempered profit margins in recent years. “Yet, revenue growth is anticipated to pick up a slight 2.0% in 2013, primarily due to increases in workforce figures and disposable income levels,” says Hoopes.
Over the five years to 2018, industry revenue is forecast to increase. While the industry will benefit from an improving economic environment and favorable demographic trends, the enactment of healthcare reform provisions is expected to be the primary driver of growth. The Patient Protection and Affordable Care Act mandates increased dental care coverage, and the legislation primarily explains the rise in industry revenue expected in 2014 alone. Yet, many industry associations, particularly the American Dental Association, have argued that the legislation missed an opportunity to address further issues. More specifically, while 8.7 million children are anticipated to gain dental benefits under the PPACA, reducing the number of children without dental benefits by 55.0%, only 5.3 million adults are expected to gain coverage under the law.
The Dental Insurance industry operates with a medium level of market share concentration. The top companies in the industry are MetLife Inc., Delta Dental and Aetna. Industry concentration has increased over the five-year period, as downstream clients viewed dental insurance as an extra cost and cut dental coverage during the recession to save money. Consequently, industry firms have merged or acquired other companies to enter new geographic markets, cut costs and improve profitability. Moreover, following the Patient Protection and Affordable Care Act, consolidation trends in the dental insurance market have mirrored these trends in the broader Health and Medical Insurance industry (IBISWorld report 52411b).
For more information, visit IBISWorld’s Dental Insurance in the US industry report page.
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IBISWorld industry Report Key Topics
The Dental Insurance industry underwrites (i.e. assuming the risk and assigning premiums) dental insurance policies. Dental insurance helps cover the costs of dental care, ranging from basic preventative coverage to major dental work, depending on the type and scope of insurance plan. Orthodontics coverage may be included in dental insurance plans, but reinsurance of dental policies is not included in this industry.
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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
Gavin Smith, IBISWorld Inc., http://www.ibisworld.com, +1 (310) 866-5042, [email protected]
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