Is Dental Insurance Worth the Money?
There you are, having a nice routine visit with your dentist. During the checkup, the dentist suddenly informs you that you’ve got a tooth that’s in trouble. If you get a root canal and crown soon, you can rescue that troubled tooth and save a lot of money by avoiding a dental implant somewhere down the road. The procedure will cost you about $2,500. For most of us, that’s a lot of money to produce on short notice. But hey, life is good. You got dental insurance a few months ago. You’re covered!
Unless you have a super-duper-platinum dental insurance plan, you’ll almost certainly be paying for that procedure yourself.
What Does Dental Insurance Cover?
Medical insurance is different from dental insurance – so much so that some insurance providers simply refer to their plans as “dental benefits” rather than “coverage.”
Healthcare insurance covers costs after your medical bill reaches a specific financial amount – as an example, an Obamacare mid-range silver plan has an average deductible of $2,927 per individual or $6,010 per family. Once you spend that amount on healthcare, the insurance kicks in.
Dental insurance only covers you up to a specific limit. Typically that limit is $1,000-$1,500 annually. When your reimbursable dental costs go over that limit, you are responsible for paying your dental care costs for the rest of the year.
The policy caps on dental insurance have remained the same for the past forty years. Meanwhile, expenditures for dental services continue to rise, at an average rate of 5.5 percent annually. Given that the average cost for a crown is $750-1200, and the cost of a single implant starts at $1500, you can exhaust your annual dental allowance fairly quickly.
That said, according to the National Dental Insurance, only 2% to 4% of Americans use their yearly maximum dental insurance allowance. The low usage rate is probably testament to the power of preventative care. A typical dental insurance plan offers what is known as"100-80-50" coverage. This means the plan will pay 100% of the cost of routine preventive and diagnostic care – typically two checkups with cleanings annually. The big plus of dental insurance is that it encourages you to get preventative care. And for every dollar spent in preventive services an estimated $50 is saved on more expensive, complicated procedures, according to a PBS interview of Dr. James Stephens, president of the California Dental Association.
The typical dental insurance plan, such as those offered by Aetna and Careington, will also pay 80% of the cost of basic services such as fillings or root canals, and 50% of the cost of major procedures such as crowns and bridges. You pay the rest of the money owed, a process that’s known as “co-pay.” So even if you haven't used up your annual maximum by the time you need the expensive procedure, you may still have to pay a portion of the bill out of pocket.
Most dental insurance plans are also likely to have a “deducible,” an amount that you will have to pay out of pocket for dental services before your insurance will begin to cover their portion of the costs.
Don’t plan on buying dental insurance and getting immediate coverage for pre-existing conditions. There will almost always be months-long waiting period before you can get reimbursed for major procedures such as crowns or root canals. Remember too that dental insurance often will not pay to restore teeth that were missing before you purchased the policy, or work that was underway prior to the policy going into effect.
Do the math and it’s easy to see that for most people, dental insurance amounts to pre-paying for dental care. That may work perfectly for some. If your employer is covering the cost of the monthly premiums, or if you anticipate you won’t need much more than basic preventative care, insurance may be the right choice. You might also opt to “self-insure,” and simply bank what you would have spent on monthly premiums in a health savings account. Another option to make dental care affordable is a dental savings plan, which offers discounts of 10-60% on average dental care rates, for members who pay an annual fee. Dental savings plans are an affordable alternative to insurance, have no annual caps, no waiting period is applied for accessing care, and no restrictions on obtaining care for preexisting conditions.
What Kind Of Dental Insurance Is Best?
Individual dental insurance comes in three forms:
- Dental Health Maintenance Organization (DHMO)
- Low premium payments, no annual cap, must use in-network dentists
- Dental Preferred Provider Organization (DPPO)
- Annual cap, may pay a higher % of dental care costs than a DHMO, higher fees for out-of-network dentists
- Dental indemnity insurance
- Highest premiums, annual maximum cap. Small if any deductible, very wide range of dentists to choose from
Which to choose? In most cases you’ll go with whatever type of plan your employer or professional association offers. If you have a choice, or are buying your own insurance, talk to your dentist and see what plans the office accepts and recommends. If you don’t have a dentist, or don’t mind going to a new dentist, shop for a plan that offers the coverage that you need, at a price that you can afford.
If you know you’ll need major work at some point in the future, you may want to look for a policy with a high cap. You’ll pay higher premiums, but you probably won’t max out your coverage in one visit.
There are some exceptions to the waiting period imposed for major procedures; a few insurers – notably Careington - may waive the wait policy with proof of continuous coverage immediately prior to your purchase of their policy. The assumption being that you didn’t get bad news from your dentist and rush right out to buy dental insurance.
If you know you’ll need major work eventually, you may want to look for a policy with a high cap. You’ll pay higher premiums, but you probably won’t max out your coverage in one visit.
Carefully consider your options – dental insurance, a dental savings plan or self-insurance, and choose the dental plan that’s right for you.