Dental Insurance: Do I Really Need It? Part Two

Last week I went through some of the exclusions and limitations that dental insurance companies employ to pay out less and less every year. This week, I wanted to get into dental insurance alternatives, and why I think that individuals might be better off without any dental insurance at all.

How dental insurance works these days is that usually you, or your employer pays the insurance company a monthly premium. For that monthly premium the insurance company offers a dental benefit, typically of $1000 a year, and like I said last week, they pay out on a percentage level. One hundred percent for preventative services, usually eighty percent for basic services, and fifty percent for major services. What the insurance companies don’t tell people is that a lot of the plans they offer, and almost all of the plans that they offer to individuals, have a waiting period for anything other than preventative services.

Most times the waiting periods for basic services are six months, and for major services it is usually twelve months. What this means for the patient is that the insurance company will collect the monthly premiums from the patient or the patient’s employer for the first six or twelve months respectively, before they will pay out any benefits for any services other than a preventative service like a cleaning.

A pretty conservative estimate for a dental insurance plan monthly premium would be approximately $30. Which would make the yearly premium for the insurance plan $360. Keep this number in mind for a little later on. What this means is that you or your employer have to pay the insurance company $180 before they will even start paying for basic services, at eighty percent, after your deductible is applied. For major services it would be $360 before they start to pay fifty percent, after your deductible. And that is before they start applying the exclusions and limitations that I was talking about before.

So, say you had a tooth break and needed a crown done. If it was within the first year of coverage, you would owe the full amount, let’s call it $1000 for a nice round number. If you needed that crown done in the second year of coverage, after the waiting period has been satisfied, you would be looking at 50% of the total cost, after your deductible, which is usually $50. When you do the math, that makes the patient portion $525. That $525 is a little misleading though, because that doesn’t include the premiums that were paid during the first year of coverage, or any exclusions or limitations that the plan might have for crowns, such as an alternate benefit limitation. So in reality, the total cost of the crown ends up being $885. The insurance ended up contributing $115 toward a $1000 procedure after making the patient wait a year to get the procedure done. This is all assuming, of course that the crown was done in the first month after the 12 month waiting period, the monthly premium was only $30, which is a pretty conservative estimate, and the deductible was only $50.

A lot of dental offices are turning to in-office discount plans to rival the growing disdain that their patients are feeling toward dental insurance companies because of the rising premiums and the shrinking benefit payouts. The offices that are doing this are receiving positive feedback from their patients because they still get a percentage off of the usual and customary rate for the area, and they do not have to deal with the headaches that dental insurance usually brings.

Another  alternative to dental insurance that some offices are employing are loyalty programs. These loyalty programs work somewhat like a dental insurance plan would, but the dental offices would be the ones collecting the premiums, and there are no waiting periods at all. It is a discounted premium, usually around $15 or $20 a month. For that monthly premium the patient would get two preventative cleanings, two exams, and any necessary x-rays covered every year, and a deeper discount than an in-house discount program could provide for any other treatment the patient would need.

These programs are somewhat new to the industry and differ by dental office, so you would have to contact your office for details about the plans that they offer. We would be happy to explain the different options we have available, just send us a message or give us a call at any time at 602-993-4200.

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