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6 Questions to Ask Before Purchasing "Dental Insurance"
The conversation usually starts out a little like this…. "Hello, it has been awhile since I’ve been to the dentist and I know I have some work to be done, so I was considering buying dental insurance. I was wondering if there was a certain plan you could recommend." I find that I receive at least a dozen inquiries similar in nature each week.
The implementation of the Healthcare Reform Act has made dental insurance seem more attainable to some people that may not have had coverage in the past. However, understanding the coverage of the many varied, and continuously changing plans available can be challenging and frustrating. I have seen many scenarios where a patient purchases a dental policy without proper research and eagerly heads to their dentist to catch up on long over-due treatment, just to get hit with a large and unexpected bill.
The term, "dental insurance" is actually a misnomer. Insurance is a form of risk management, typically purchased to transfer liability to another entity in order to protect oneself from the financial impact of a major incident or affliction. Dental insurance is rarely comprehensive enough to cover more than a couple of hygiene appointments and a few fillings. It is important to be aware that dental plans are not structured the same way that health insurance plans are. Also, dental coverage for adults is not a requirement through the Affordable Care Act so there are no "minimal essential coverage" requirements to regulate what is offered. It is best to view a dental policy as a way to offset some of your treatment costs, and not as true insurance.
While there is no straight forward answer as to which plan is best, there are a few key questions that you can ask when considering a stand-alone dental plan.
1. What is the annual plan maximum? This should not be confused with medical insurance out-of-pocket maximums, where once a patient has paid a certain dollar amount during the year, insurance kicks in and pays the rest in full. A plan maximum is the total amount that insurance will pay out during the year; any remaining balance becomes an out-of-pocket expense to the patient. Dental maximums are commonly around $1000 to $1500 per year. Unfortunately, annual maximums are still similar to what they were when dental insurance was first introduced in the 1960’s, even though dental costs and dental premiums have increased significantly.
2. What is the level of coverage? Usually dental benefits are broken down into 4 categories:
Class I or Preventive: cleanings, exams and x-rays
Class II or Basic: fillings, endodontics, periodontics and oral surgery
Class III or Major: crowns, bridges and implants (occasionally endodontics, periodontics and oral surgery are considered at this level of coverage)
Typically, group plans will cover Class I at 100%, Class II at 80%, and Class III at 50%. Orthodontics are not always covered, but when it is, the coinsurance is usually 50% up to a certain lifetime maximum. It is not uncommon for stand-alone, private dental plans to cover these services at a lower percentage rate. The more affordable plans rarely have coverage over 60% and won’t have orthodontia coverage. Payment is always based on the company’s UCR (usual, customary and reasonable) fees. These fees vary amongst each insurance company and may not always match up to a provider’s fee schedule. Often times an insurance company’s UCRs can be around 50% of the average dental office fees. The difference is an out-of-pocket expense to the patient and added to their coinsurance.
3. Is there a waiting period on services? Most people that obtain dental benefits are eager to begin using them and take care of issues that have been plaguing them for a while. Pay close attention to the "plan limitation" section of these policies. Typically at the very end, any waiting periods will be disclosed. It is not uncommon to find waiting periods of 6 months for basic restorative work such as fillings, and waiting periods of 12 months for major services such as crowns, endodontics and oral surgery. These waiting periods usually apply when the consumer has not had previous coverage, or their dental policy has lapsed for more than 3 months. A plan with waiting periods isn’t very beneficial to someone with urgent and comprehensive treatment needs.
4. Can I use this insurance at my dental office? Usually the answer is yes. However, be cautious of the more prevalent EPO (Exclusive Provider Organization) plans common through the insurance marketplace. Typically, even if your provider isn’t "in-network" with your insurance company, they can still obtain out-of-network benefits on your behalf, however EPO’s are provider specific and can be misleading. No benefits will be available through these plans unless you go to a specific provider. EPO coverage is more beneficial in the Portland/Metro area and are nearly useless in Jackson County. Naturally, these plans are usually the least expensive.
5. What are the limitations and exclusions? Not everybody can be an insurance specialist, but it is still important to know what your needs are, and if the insurance plan you are considering paying for is going to be suitable for those needs. If you have periodontal disease like 47% of adults in the U.S.1, then you will require more frequent, deeper cleanings. Some plans only cover 2 cleanings a year of any kind. Furthermore, some of the more limited, affordable plans will consider the periodontal cleaning under class II or class III services and waiting periods may apply. In other words, the most basic and necessary of services may not even be covered! Other exclusions are common including; fluoride, implants, orthodontics, and cosmetic services.
6. Is the plan cost-effective for my needs? If you select a policy which imposes a waiting period, be prepared to lose money during the first year of coverage. Below is an example of what an average, healthy adult without periodontal disease can expect to pay for preventive care along with the cost of one of the common dental plans from MODA.
Annual Preventive Costs
Annual Plan Premiums
Patient 50% Coinsurance
Total Annual Out-Of-Pocket
*Fees based on 2 prophy cleanings, appropriate x-rays and an exam
If this plan is only used for preventive care and nothing else, the cost of premiums and coinsurance exceeds the benefits by $111.50 and $172.50 respectively. Some ground could be made up if the patient has class II services performed after the 6 month waiting period is met. However, there is still a $1000 annual max and the coinsurance would increase proportionately.
Be cautious of low-cost plans and take time to do your research. A licensed insurance agent or the insurance coordinator at your dental office are both good resources. You may find that the best solution for you is to forgo a dental plan altogether. An alternative may be to put that monthly payment into an HSA account to use at your discretion or to inquire into a no or low fee payment plan offered by your dental office. If you have urgent and comprehensive treatment to be done, have realistic expectations for your coverage and be prepared to pay. Bottom line….there is really no such thing as "dental insurance."