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Dental savings plans vs. dental insurance: the 'tooth' about options for grinding down dental bills

You’re reclined in the dentist’s chair. The nitrous oxide is beginning to kick in and suddenly you are floating. Ahhhh. Modern dentistry can take a lot of pain out of a simple filling.

Unfortunately, it does little to dull the pain you’ll feel in your wallet when you climb out of the dentist’s chair.

The good news is that dental patients have two distinct options designed to help grind down the kind of bills that can really strike a nerve. They’re discount dental plans vs. dental insurance and the main thing they have in common is that folks who have chosen either option tend to get more treatment and have fewer teeth extracted. (The top reason Americans don’t go to the dentist is that they don’t have dental coverage.)

Dental discount plans

Dental discount plans are conspicuously different from dental insurance. In fact, the first thing buyers need to be aware of is that dental discount plans are not dental insurance. These plans are more like buying a club membership with specified discounts for each procedure you may need. You always pay the dentist when service is performed, but with your card, you receive a designated discount off the dentist’s rack rates, depending on the plan chosen and services rendered.

The plans aren’t insurance, but they do resemble dental insurance. One obvious similarity is that if you have a dental discount plan, you can only receive discounts from providers within a plan’s network – similar to the managed-care dental plans mentioned earlier — since these are the only dentists who have agreed to accept the discounted prices.

And the plans do offer attractive features, which may explain why they are widely available for consumers. Among those pluses? In most case, the absence of many factors that make insurance unattractive: deductibles, coinsurance, waiting periods, annual maximums and insurance claim forms. (You simply pay and the dentist simply provides a discount at the time of the procedure; the plan itself isn’t paying anything towards your bill.) The cost of a dental discount plan is also typically lower, and plan holders can usually see procedure costs and their discounts ahead of time.

One issue to research before purchasing one of these plans is whether the plan has a waiting period. (You certainly don’t want to learn while sitting in the dentist’s chair that the root canal you need won’t be eligible for a discount for another six months.) Also, check for a pre-existing condition clause that may nix coverage of a dental problem.

Another issue to definitely consider with these plans is the type of coverage you need. A typical dental discount plan will provide larger discounts for procedures performed by a general dentist than by a specialist, and lower-cost procedures will generally be eligible for a larger (percentage-wise) discount than high-cost procedures.

Where to find dental insurance or discount plans

One of the least expensive sources of dental insurance and discount plans is through a group — your employer or an association — so you may want to look there first. And if your employer doesn’t provide dental coverage now, it doesn’t hurt to ask for it. More and more employers now consider dental coverage as essential for their employees.

But if you need to purchase your own coverage, there are dental discount plans and stand-alone dental plans widely available. Your best bet is to check with your dentist to see what plans they recommend. If your dentist participates in any discount or insurance networks, they’ll be able to point you to those plans, and you’ll know that you’ll be able to continue to see your preferred dentist while using your new plan.

Dental insurance

This article is focused on dental plans for adults. But if you need dental coverage for your children, read more about how the Affordable Care Act has made pediatric dental coverage more accessible, affordable, and comprehensive.

Individual dental insurance is similar to individual health insurance in that plan buyers can choose from managed-care options – a dental health maintenance organization (DHMO) or dental preferred provider organization (DPPO) – or dental indemnity insurance, also known as traditional fee-for-service insurance. Each option has its strengths and drawbacks.

If given the three options, plan buyers generally make a choice based on such factors as access to particular providers, price of their premiums and deductibles, types of services covered and annual maximums paid.

With fee-for-service, you have much wider latitude on the amount of dental services you consume. Think of the managed care option like a personal trainer, who makes those decisions for you. They may save you from some unnecessary x-rays, but you may have longer waits between checkups or reduced access to other services. But on the other hand, a dental indemnity plan doesn’t have contracted rates with any dentists, so the amount that you end up paying after the dental benefits are applied might still end up being substantial.

Dental health maintenance organization (DHMO)

Under the DHMO option, plan buyers typically can expect the lowest of the insurance plan premiums. These plans also often have no deductible and no annual benefit maximum (note that a DHMO with no annual maximums is only going to be available through an employer; dental insurance plans that people purchase on their own almost always include a cap on how much the plan will pay during the year). With a DHMO, the policyholder is restricted to dentists within a network, just as enrollees in a medical HMO have to use doctors and hospitals within the HMO network.

DMHO policyholders can expect a schedule of co-payments for individual dental services or office visits, making it easy for policyholders to predict their out-of-pocket costs.

Dental preferred provider organization (DPPO)

Under the DPPO option, premiums are higher and there is an annual maximum – usually between $500 and $2,000 – that the carrier will pay for services, but more of the cost of dental work may be covered. The policyholder is again incentivized to use a network of providers, but can pay more to go out of network.

DPPO policyholders can expect to see the amount paid by their carrier represented as a percentage of the procedure cost. Typical plans pay 100% of preventative services (routine exams and cleaning), about 80% of basic services (such as extractions, fillings and root canals), and 50% of major expenses (such as crowns, bridges, dentures, and sometimes implants), until the policy has paid out its maximum benefits for the year.

Dental indemnity insurance

Those who choose dental indemnity insurance may do so for the complete freedom of choice of providers, but that freedom comes at a cost. Indemnity insurance – or traditional fee-for-service insurance – has the highest premiums, an annual maximum payment from the carrier, and usually a deductible.

What dental indemnity policyholders pay for procedures is stated in a percentage (just like DPPOs) or a fixed amount per service. Because there is no network, there is no established discount from providers. This means that the dentist can bill you whatever amount they see fit. You’re responsible for paying that bill, and the dental indemnity plan will reimburse you whatever its covered amount is for that service (either a percentage of the amount the plan considers reasonable and customary, or a flat amount based on the service that was performed). The difference between what the dentist bills and what your plan pays is your own responsibility.

Other tips with your dental coverage

If you’re thinking of enrolling in dental insurance because you know you’ll need expensive work soon, it’s likely already too late. Nearly all self-purchased dental insurance plans have waiting periods for pre-existing conditions and – in any case – will not pay for teeth you are already missing before you enroll. (That’s a gap in both your mouth and your coverage.)

  • If you already have a dentist you like, make sure he or she accepts whatever plan you are considering.
  • If you don’t have a dentist, be a savvy consumer and ask prospective dental offices to provide a summary of fees for exams, bitewing x-rays, cleanings, and other procedures you may need.
  • Also ask about the discount they offer to discount plan holders, as discounts can make prices for the same service vary greatly from dentist to dentist. You’ll also want to see if they offer discounts for paying in cash, as that might be an option for saving money even if you don’t have a dental plan.
  • As always, do your homework on the Web. It’s an obvious source of plan information and an online dental quote is a great way to predict costs and choose a plan accordingly.
  • If you do talk to an agent, be sure to ask plenty of questions to ensure that you get the best dental plan for your needs and budget.

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