October 2017
Volume 38, Issue 10

Designing a New Payment Model for Oral Care in Seniors

Judith A. Jones, DDS, MPH, DScD; and Michael Monopoli, DMD, MPH, MS


With 10,000 baby boomers turning 65 every day, many will be on fixed incomes and will lose dental insurance upon retirement. This article presents why a dental benefit in Medicare might save the US government money, and who would likely benefit. It details an approach to estimating costs of inclusion of a dental benefit in Medicare, and compares the proposed approach to existing proposals. Additionally, the ensuing steps needed to advance the conversation to include oral health in healthcare for the aged will be discussed.

As more of the US population reaches retirement age—led by the baby boomers—a national discussion has centered around the question of whether it is time to expand access to affordable and quality oral health services, with a growing network believing that indeed it is.1 Given mounting evidence that oral health is a part of total health and impacts the cost of care and outcomes, private healthcare insurers are reducing the overall costs of healthcare by including dental benefits in their plans for older adults.

An assessment by Optum for United Healthcare™ found that people with chronic conditions (eg, type 2 diabetes [T2D], coronary artery disease [CAD], asthma, congestive heart failure, chronic obstructive pulmonary disease [COPD], and renal diseases) who received preventive dental care saved on average $1,037 compared with people who did not receive such care. Of note was that the largest savings were in people who were not compliant with their medical care ($1,849).2 United Healthcare’s work builds on that done by Jeffcoat and colleagues3 who in 2014 studied total costs of healthcare and hospitalizations in persons with T2D, CAD, cerebral vascular disease (CVD), and rheumatoid arthritis (RA) and in pregnant women in a retrospective observational study. They found all groups with completed periodontal treatment had better outcomes and lower costs except for persons with RA. Nasseh and colleagues4 showed annual savings of $664 in healthcare costs in persons with newly diagnosed diabetes. Avalere Health LLC, at the request of Pacific Dental Services, estimated the cost savings associated with a periodontal disease treatment benefit in Medicare to be $63.5 billion over 10 years.5 The economic benefits are in addition to benefits in overall patient health and quality of life.

Based on the data above and the fact that many private insurers provide dental care to capture the substantial savings from general health costs, the Santa Fe Group supports the inclusion of comprehensive dental benefits in Medicare.6,7 Given the current political climate, the potential repeal and replacement of the Affordable Care Act, coupled with the anticipated growth in number of older individuals, the disparities in access to dental care, and the prevalence of oral diseases among older adults,8-10 efforts have focused on saving cost while improving health and oral health outcomes among older adults. Importantly, there has already been a rapid expansion of the Medicare Advantage programs that include the addition of dental benefits.11 Often, though, the benefits offered under Medicare Advantage are quite limited.

The purpose of this article is to describe an approach to the development of a Medicare dental benefit, and present and compare it to other extant options with regard to how it could be developed.



This analysis and commentary makes use of existing published data and results provided by actuarial analyses of the Fair Health® data (personal communication, Michael Monopoli, DentaQuest Foundation) to estimate costs of a dental benefit for Medicare beneficiaries. Figure 1 depicts the process used to estimate the benefits.


The Medicare population was 57 million in 2015 with total expenditures of $647.6 billion.12 Part A, for inpatient hospital and specific other medical care, covered nearly 55 million enrollees (46.3 million aged 65 and older and almost 9 million disabled enrollees) with payments of $273.4 billion in 2015.13 Part B, Supplementary Medical Insurance, provided payments for nearly 51 million people in 2015 (43 million aged 65 and older plus more than 8 million disabled enrollees), totaling $275.8 billion in 2015. Part B helps pay for physician, outpatient hospital, home health, and other services. Part C is the optional Medicare Advantage program, selected by a growing proportion of the Medicare beneficiaries that receive Parts A and B services through approved, capitated private-sector health plans. Most Medicare Advantage plans also include prescription drug coverage, which for non-Medicare Advantage plans is termed Part D. In 2015, Part D covered almost 42 million people, with benefits totaling $89.5 billion. The average monthly premium for Part D in 2017 is estimated to be $34.13

The Process of Benefit Development

The Santa Fe Group, Oral Health America, and the DentaQuest Foundation sponsored the benefit development efforts. A small Development Group, and larger Advisory and Review Groups (members are listed in the Acknowledgments) participated in face-to-face and online meetings from March through September 2016. The Development Group was supported by a private actuarial firm (Milliman, us.milliman.com) to estimate premium costs on a per member per month (pmpm) and per beneficiary per month (pbpm) basis. PMPM costs are those paid per member per month for the insurance. PBPM costs are the average costs per user of the care. Because not all members use care in a given year, the PBPM costs are higher than the PMPM costs.

The Principles of Benefit Development

Critical requirements for the benefit were that it integrated oral health benefits into existing Medicare benefits and maintained robust oral health provider participation, and that dental benefits were available for all participants in Medicare. A focus on inclusion in Medicare Part B most closely met these requirements, given the documentation and strength of oral-systemic relationships14 and the previously described cost savings associated with access to dental care.

Medicare Part B provides access to “physician, outpatient hospital, home health, and other services,” and dental care inclusion for all participants ensures access to services that would identify, treat, and prevent new sources of pain, infection, and inflammation. Part B requires all eligible people to pay a monthly premium (or have it paid on their behalf, see Table 1) that is adjusted for income.13 The income adjustment promotes health equity and social justice. Currently, older adults who are high income are 3.5 times more likely to use dental care.10 Work highlighted by the Santa Fe Group7 and the American Dental Association’s Health Policy Institute10 showed that, while older adults with high incomes were slightly more likely to use dental care between 2012-2013 (from 66.9% to 68.3%), there was a decline in the percent of low-income adults who used dental care (from 29.6% in 2010 to 19.4% in 201310). Thus, inclusion of the benefit in Medicare Part B would contribute to improved access for low-income older adults.


Through an iterative process (Figure 1), the authors developed options that would be acceptable to providers and beneficiaries in terms of coverage and cost. Our initial approach was to develop a “core global benefit” (Global) and a moderate, optional second-level benefit (Level 2). The primary goal of the Global benefit was to prevent pain, inflammation, and infection.14 Thus, at a minimum, the core benefit plan would provide diagnostic (Dx), preventive (Prev), nonsurgical periodontal therapy (scaling and root planing [SRP]), and non-elective oral surgery (removal of infected teeth and root tips [EXT]). The moderate, optional second-level benefit included restorative, removable, fixed, endodontic, and selected implant procedures (ie, two implants under a lower complete denture), as well as a spending cap ($1,500).

Adjustments were made by the actuarial team to account for gender distribution (45% male, 55% female), utilization trends, and the impact of bundled payments by which providers would receive a periodic payment for all of the bundled services (Dx, Prev, SRP, EXTs, and direct restorative procedures). In addition, the actuarial team adjusted the estimates for intangibles like pent-up demand and pre-announcement of benefits, income adjustment (for Level 2 services only), a voluntary benefit adjustment to account for the election of the Level 2 coverage among people who expected to use it, an adjustment for non-users, and for benefit richness.

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