Understanding Your Dental Insurance Options
Every tooth in a man's head is more valuable than a diamond.
~Miguel de Cervantes, Don Quixote, 1605
Plans vs. Insurance: What's the Difference?
There are two primary ways to ease the financial burden of caring for your pearly whites: with a dental plan or with dental insurance. Those may seem like interchangeable terms but they're not. Read on to learn more!
1. Dental plans: Also known as discount or referral plans, these are not insurance policies. Plan members are given access to a network of dentists who have agreed to provide them services at a discount rate. Most plans do not provide discounts for out-of-network care.
2. Dental insurance: Dental insurance is similar to health insurance in that the patient (or, more commonly, his or her employer) pays a premium in exchange for care; of the half of the population that has dental insurance, most get it through work. It is not always (rarely, in fact) the most cost-effective solution for individuals.
There are two primary types of dental insurance: indemnity plans and managed care plans.
Traditional/indemnity insurance plans: Traditional fee-for-service structure. Plans pay for most if not all preventative care, and between 50 and 80 percent of other services.
There are two common types of indemnity insurance:
Usual, Customary and Reasonable (UCR) insurance plans (UCR): In UCR policies, the insurer determines the "usual, customary and reasonable" cost for dental services. Insurers will pay up to but not more than their predetermined prices. Heads up: before you sign up, make sure what the insurer deems "usual" is, in fact, usual. (If they claim the usual and customary cost of filling a cavity is $20, and your dentist thinks it's $300, you'll have to make up the difference.)
Table of allowances insurance plans: These plans cover a finite number of procedures, each of which is associated with a dollar amount, much like a UCR plan.
Managed care plans: These provide comprehensive coverage to policyholders in exchange for a monthly premium.
Capitation insurance plans (DHMOs): Capitation plan holders pay monthly premiums and receive any and all treatment they require. Like regular HMOs, you may sacrifice some flexibility for more comprehensive coverage.
PPO (Preferred Provider Organization) insurance plans: In general, this option allows for more flexibility in terms of whether you seek care from an in- or out-of-network provider. Like capitation plans, you pay a premium in exchange for care.
EPO (Exclusive Provider Organization) insurance plans: These are similar to PPOs and capitation plans, but as the name implies, you must use the insurer's network of providers in order to get benefits.
Insurance for Individuals?
The American Dental Association (ADA) says insurance for individuals isn't common, "because dental needs are highly predictable." (Thus, it's an unattractive situation for insurers and the insured—either the premium is prohibitively high for the patient or prohibitively low for the insurer.)
For that reason, those who do carry dental insurance usually have it through their employer—an arrangement that's more attractive to both the insurer and the insured.
Enter Dental Plans
Dental plans have become popular options for those who (1) wish to maintain good oral and financial health, and (2) don't have the option of getting conventional insurance through their employer.
Still, you should know that dental plans are not insurance policies and usually require that you stick with their network of providers. So if you've seen the same dentist since your teething days and he or she isn't on their roster, you're out of luck.
Considerations for the Dental Insurance Shopper
If you're in the market for traditional dental insurance, these are some things to consider:
Exclusions and Limitations
An insurance plan should cover preventative, basic and major procedures. Some plans have a tiered approach, paying, say, 100 percent for preventative care, 80 percent for basic, and so on. The same goes for periodontal and orthodontic procedures: Some plans cover all or most, some leave costs entirely to the patient. It's best to read the fine print.
In order to keep overall costs down, many dental insurance providers require patients to pay a portion of the cost of a procedure or office visit. Copayments can vary widely. Make sure you're familiar with a prospective plan's copayment structure.
Annual and/or Lifetime Benefit Maximums
Occasionally an insurance plan will have a yearly or lifetime payment maximum. In order to ensure adequate coverage, examine your dental needs and the plan's benefit maxes.
In many cases, there is an incentive to use a dentist that's part of a provider's network. Most managed care plans are more restrictive than indemnity plans.