Business is booming across healthcare benefits as employers look to support the health and wellbeing of their workforces. But, with inflation putting budgets under pressure, cost-effective options are proving popular.
Among the benefits attracting plenty of attention are optical and dental, whether through standalone products or as part of a broader cash plan. “The pandemic has pushed healthcare to the top of the agenda,” says Paul Gambon, sales and marketing director at Medicash. “We’re also seeing lots more interest from employers to use cash plans as a tool for recruitment and retention. We sold a record 122,000 new policies last year and we’re already up to 85,000 this year.”
Pandemic performance
Things haven’t always been quite so rosy in recent times for the providers of optical and dental benefits. Government forced both dentists and opticians to close during lockdowns and, even when they were allowed to reopen, consumer appetite to get up close and personal remained muted.
NHS figures show just short of 40 million fewer courses of dental treatment were carried out in England over the course of the pandemic – equivalent to a whole year’s worth of dentistry.
While technology provided a useful stopgap across many areas of healthcare delivery, it was much less successful for optical and dental. “We were able to offer helplines and online services such as virtual GP and physiotherapy but dental and optical are very much face-to-face businesses,” says Jenni Wilson, group sales director at Simplyhealth. “There was a real limit to what we could do.”
Claims rollercoaster
Without an alternative, claims dropped, especially on dental. “It was a much lighter claiming year,” says Wilson. “We returned money to customers but also funded PPE for dentists.”
At Health Shield, the drop in claims meant it was able to hold prices and increase benefits for members. “We increased benefit by between 5 and 10 per cent for our members,” says Paul Shires, commercial director at Health Shield. “When pricing cash plans, you have to look at the longer-term picture. A large increase or decrease in claims in a single year is usually a one-off. Where they drop, it’s also possible that claims will come back stronger the following year as members catch up on treatment.”
This rebound has certainly been seen in dental. At Health Shield, dental claims are up by 18.2 per cent this year, with the average value of a claim nearly £50. Similarly, at Medicash, there was a 55 per cent increase in dental claims in 2021.
These increased costs come down to higher prices for dental work, but also a year or more without a check-up. “Not being able to see a dentist in 2020 has meant that some people ended up with more severe dental problems, which can cost more to rectify” says Gambon. “As these get sorted, I do expect to see these types of claims levelling off now.”
Sight test
Against this claims rollercoaster ride for dental, optical remained fairly stable through the pandemic. At Medicash, there was a 17 per cent increase in optical claims in 2021, while Health Shield’s Shires says that as soon as access was eased, optical claims returned to pre-pandemic levels and beyond.
The relative stability of optical claims is down to the way consumers access care at the opticians. Rather than the six-monthly check-up recommended at the dentists, the NHS says most people should get their eyes tested every two years.
Additionally, while people might not have been able to get an eye test during lockdown, they could still buy glasses and contact lenses online. This, and finding the right pair of glasses for back-to-back video calls, ensured that optical claims remained fairly stable.
Growth opportunities
Claims across both dental and optical may be stabilising following the pandemic but demand is expected to rocket. As well as satisfying the post-pandemic yen for all things health-related, there are a number of other reasons, dental and optical benefits are proving increasingly popular.
Post-pandemic, it’s much harder to find a dentist. In May, the British Dental Association reported that 41 per cent of adults were struggling to access care.
Where someone is able to get an appointment, costs can often be a deterrent. A survey by Healthwatch England found that 49 per cent of respondents felt NHS dental charges were unfair, with 34 per cent saying they’d had to pay privately to get all the treatment required and 24 per cent feeling pressured to pay privately when they booked their dental appointment.
The cost of living crisis is adding to these financial barriers. Isaac Feiner, director at Lifepoint Healthcare, says: “Cash plans put money in employees’ pockets for everyday health costs. Where money is tight, having dental and optical benefits can prevent someone from postponing a check-up.”
Shires agrees. “A cash plans give an employee the confidence to get routine healthcare sorted,” he says. “We expect to see people using their cash plans more as they look for ways to save money.”
Even without the current financial pressures, health and wellbeing benefits are highly appreciated by employees. The Investors in People Health and Wellbeing Good Practice Guide states that 80 per cent of people would feel more positive towards their employer if they offered better health and wellbeing benefits. This makes the provision of dental and optical benefits a winner for employers too. “People want health-related benefits and, with unemployment low, employers can use them to attract and retain employees,” says Wilson.
Cover options
There are a few different options when it comes to providing optical and dental benefits. Standalone plans are available but it’s also possible to wrap both with a range of other healthcare benefits within a cash plan or a medical insurance scheme.
Unsurprisingly, Gambon is a fan of the cash plan route. “There’s something for everyone on a cash plan, which makes it a much easier message to communicate,” he says. “If someone has good teeth, a dental plan can be perceived as offering less value.”
Preferences for different types of health benefits mean that, where possible, offering both a standalone dental plan and a cash plan is ideal. “We see plenty of employers that offer both, perhaps through a flex scheme or as a voluntary benefit,” adds Wilson. “Employees can have very different needs for treatment but everyone will get some value out of these benefits.”
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