What You Don’t Know About Your Dental Insurance May Cost You Money
This information is provided in order to help you better understand your dental insurance and to help you make more informed decisions about dental insurance policies. Please use the following information to more accurately analyze your existing dental insurance or potential new policies. Don’t be fooled or misled, always check the “fine print”.
Does your insurance policy/company give you freedom to choose the dentist you want?
In other words, can you see the dentist of your choice or does your insurance company dictate who you can see and limit you to a specific list of dental offices. If it is a limited list, what are each dentist’s level of experience, training, advanced degrees, quality of care and specialties? If you have to go to a “clinic” or “big corporate” type dental office, will you even see the same dentist each visit. Sometimes these offices have a very high turnover of employed dentists, hygienists and other office personnel and you may not experience consistency over time. Can you get an appointment in a timely manner or do you have to wait an excessive period of time for an appointment. Are there extra charges added onto your bill that the insurance doesn’t cover? Be careful, some of these offices that “take” your insurance add extra charges (sometimes many) to make up for low insurance payments on services rendered.
Does your policy contain a waiting period for major dental work?
Most people take out dental insurance for major problems and larger expenses (crowns, bridges, extensive dental treatment) not for minor expenses. Frequently insurance companies have a waiting period (sometimes up to one year) during which time you pay the premium but cannot use the insurance for any major dental work.
Does your policy contain treatment limitations or exclusions? What are they?
Does it cover cosmetic dentistry, dental implants, extensive crown and bridge work, TMJ treatment, occlusal treatment or adult orthodontic care? You should carefully evaluate the list of exclusions based on your individual treatment needs.
Does the policy contain a pre-existing condition limitation?
Dental insurance may contain a clause that excludes payment on replacement of teeth that were missing prior to the insurance policy activation date. In other words, if you have a missing tooth, the insurance may not pay to replace it if it was missing before you were signed up with that specific dental insurance policy.
Is there an alternative benefits provision?
Your policy may contain a clause that allows the insurance company to pay for the least expensive alternative dental procedure when several choices are possible. This typically means that they can “downgrade” your treatment from something you might prefer (or you and your dentist decide is the best choice for you) to some other procedure they consider an “acceptable” but less costly or less advanced alternative procedure. For instance, your insurance company may only pay for a silver amalgam filling rather than a white composite filling or they may only pay for a removable partial denture instead of a fixed bridge or a dental implant restoration.
Are there any frequency limitations on any dental procedures? What are they? Which procedures?
Almost all insurance policies have limitations (sometimes extensive limitations) on how frequently you can have specific procedures completed. If there is such a frequency limitation on a procedure you need, your insurance may not pay or reimburse you for treatment at all on that procedure.
The Critical Financial Calculations:
The following questions should be carefully evaluated in order for you to understand what your insurance is actually saving you per year (or costing you).
What is your insurance company’s yearly maximum benefit?
This is the maximum dollar amount your insurance company will pay toward your dental care in any one calendar year, no matter how much dental treatment you actually may need. Most often we see this between $1000 and $1250.
Is there a lifetime maximum benefit on any procedures?
This is the maximum payment your insurance company will make over any and all time periods. Sometimes there is no lifetime limit on some procedures and a lifetime limit on other procedures. Be certain to check the details.
Does your insurance company pay for dental treatment based on the actual fees charged by your dentist or based on a fee schedule limitation contrived by the insurance company (which may be set at a low level or may be several years out of date and not accurately reflect common fees charged in any given geographic area for best quality treatment)?
Insurance companies often compose a schedule of fees they term UCR or actually have a limited fee schedule to make the math calculation for their required payment work in their favor and thus decrease their contractual payment for treatment. For example, the insurance company may state that they will reimburse a crown at 50%; however, they actually will reimburse at 50% of their allowable fee schedule not the actual fee charged by the dentist. For example, if the dentist’s actual charges are $1000 for a crown, but the insurance fee schedule allowance is $650, the insurance company will pay 50% of $650 = $325 not 50% of $1000 = $500. In this example, you can see that this reduces the actual reimbursement paid by the insurance company such that the actual reimbursement is only 32.5% ($325 of $1000) of the total charge not really 50% as stated or implied.
What is your annual deductible payment?
If you use your insurance, this amount is typically paid by you each and every year before any insurance reimbursement will take place. You can actually look at the “deductable” as simply a way of increasing the overall cost of the insurance for anyone that uses the insurance for treatment. Because the actual cost of the insurance policy is really equal to the annual premium cost plus the deductable. We typically see deductable payments somewhere between $50 and $100.
How much is your annual premium (multiply your monthly premium times the 12 months per year)?
What is the dental insurance costing you per year? Are you paying the premiums or does your employer give you the insurance at no out of pocket cost to you? If you are paying the premium (or part of the premium), you must very carefully compare what the cost of the insurance is to you versus what you actually save in dental treatment per year. (See next paragraph)
What is your actual risk of not having any dental insurance?
You can calculate your actual maximum out-of-pocket cost (risk) of not having any dental insurance whatsoever by subtracting the total of your yearly insurance premium cost plus any deductable from your annual maximum benefit. This amount is your actual risk of not having any insurance. For instance, if your annual maximum benefit equals $1000, your annual premium cost equals $380 and you have a deductable of $50, your actual maximum risk is $1000-$380-$50 or $570. Remember, your insurance company will not pay a penny more than your yearly maximum allowance and (see next paragraph) you may have to “spend” quite a bit more than the annual maximum on your dental care to actually get reimbursed the total yearly maximum because of the fee limitation schedules and percentage reimbursement calculations the insurance company uses on each procedure. (See next paragraph)
How much dental work must you have completed to get your maximum annual insurance payment?
How much dental work would you actually need to complete for your insurance company to reimburse you the full amount of your annual maximum benefit? Because insurance policies often have calculations basing the reimbursement for any dental procedure on a percentage of the actual fee schedule allowed, we typically find that patients often must have $2000 to $3000 worth of major work completed in order to be reimbursed the $1000 maximum annual benefit payment from the insurance company. How often do you really need this much dental work done in any one year? If you need this frequently, you might benefit from insurance. However, if you don’t have this happen often, you may not get as much financial benefit from the insurance and, over the long term, it might actually cost you more out of pocket. Remember, if in one year you need extensive treatment, your insurance will only pay up to their allowed maximum.
Don’t forget about that limiting annual maximum benefit!
Remember the annual maximum benefit always limits or restricts your total potential savings – especially on more involved treatment! That is why it’s in the policy! To limit your savings on dental care and limit the insurance company’s payout on your treatment. It often causes people to postpone necessary dental care and postponed dental care often means the underlying dental condition progressively gets worse. Will it be painful? Will it cost you more money by postponing treatment? Maybe so-but next year your insurance policy will still have an annual maximum benefit so it probably won’t cost the insurance company more.
The real “dirty secret” about that limiting annual maximum benefit!
The annual maximum benefit is the most your insurance will pay in any one year, no matter what your dental treatment needs. When dental insurance pays for any dental treatment whatsoever, these payments all count against your annual maximum benefit. All payments made for your cleanings, check-ups and x-rays (routine care) are deducted from the annual maximum allowance. So remember, if you need any other dental work, your insurance will only pay up to your yearly maximum for all treatment (including your routine cleanings, checkups and x-rays). To calculate the amount your insurance will pay towards dental treatment other than your routine cleanings and check-ups, subtract the insurance payment on all routine care from your annual maximum. In other words: (insurance money available for other dental treatment) = (total yearly maximum insurance benefit) – (insurance money paid on all check-ups, cleanings and x-rays).
So what happens if I need more treatment than what my insurance covers?
Plain and simple-you pay for it, without any additional help from your insurance company. It is out of your pocket.
What condition is your mouth in now?
Do you have a lot of dental problems where you definitely expect to maximize your insurance for the next several or more years, or have you been seeing a dentist regularly and your mouth is in great shape. Have you asked your dentist to describe your level of oral health?
If your mouth is in great shape, you may be at minimal risk for dental problems. People who have good dental health or occasional problems may not really benefit financially from insurance when the cost of the insurance premium is considered, year after year. In other words, if you pay X dollars per year for your insurance premium and don’t use the dental insurance beyond routine preventative dental care, does your premium cost you more each year than your actual projected dental expenses? (Does the premium cost more than your needed dental treatment?)
If you have extensive dental treatment needs, typically somewhere around two thousand dollars (or more), your dental insurance will still only pay the maximum annual benefit. As the total cost of your treatment increases for any one year, the actual percentage amount of your treatment paid for by insurance decreases because the annual maximum benefit does not change. In these cases, there may be better alternatives to dental insurance that can actually save you more money.
