Most people mistakenly assume that dental insurance is like medical insurance – IT’S NOT! Many people take out dental insurance in case they have major dental problems. Unfortunately, virtually all dental insurance policies have a yearly maximum benefit payment limit. Often, this is around $1000 per year. If you carefully analyze the insurance policy, you will also find that dental insurance covers the small stuff at a higher percentage of reimbursement than more involved dental treatment. At best, insurance companies typically cover cleanings and checkups at 80% to 100%; minor dental work (fillings) at 70%-80% and major dental work at 40%-50%. So when you need major work, the insurance reimbursement is a lower percentage. Translated, it means that while insurance companies may pay reasonably well on small routine care, they place much more of a financial burden on you when you need significant work. In other words, insurance really only covers the small stuff. Is that what you want out of an insurance policy?
“Usual, customary and reasonable” – this is probably the one phrase insurance companies love to use, and it can be very misleading. Sounds real official doesn’t it? Well, it’s not. Insurance companies want to lead people to believe that this is an accurate statistical figure, carefully and fairly calculated from thousands of insurance claims from each geographical area – hogwash!!! It seemed like years ago, it may have been more like that, but now this is rarely true. It is really a term that means “a schedule of maximum allowable fees for each procedure.” This schedule is carefully calculated and stipulated by the insurance company, and it works along with their annual maximum benefit and their percentage reimbursement schedule to limit the company’s financial payment on claims. This schedule can vary enormously on any given procedure. One policy may allow over $1300 for a procedure where another policy only allows $450 on the exact same procedure. Get the picture?
This is what makes insurance coverage so confusing and very hard to compare – side by side. That’s the way insurance companies want it! They don’t want people to be able to compare different policies easily. However, the bottom line is that these three factors all work together to limit the insurance company’s payments. Think you can figure it out – it is very difficult even for well informed consumers because you must take all three of these factors into consideration on every calculation. So most of the time, people purchase dental insurance not really knowing exactly what they have in the policy. There is always much “hidden” in the fine print.
Be cautious about the details of limited benefit dental plans and dental discount plans. “Caveat Emptor” or “Let the buyer beware!” If it sounds too good to be true… maybe it is! Do you thoroughly understand all the fine print of your policy or contract? While some policies or plans may look good at first glance, there is always much hidden in the fine print. Often, the lowest-cost plans don’t save you as much as you may first think. At the same time, if your policy or plan dictates to you where you have to go for treatment, what is the skill, knowledge, education, experience and service level of that office? Many times the “cut rate” policies are only taken by big corporate dental offices. These offices can be impersonal, staffed by employees with little experience and often have a high rate of turnover so even if you find a dentist or staff you like, they may not be there the next time you go in.
Remember the expression “you get what you pay for.” If the cost of the dental insurance is too good to be true-it probably is. While it may not be very easy to see the true limitations of the policy, inexpensive add on dental insurance and cheap dental insurance will never give the full benefits of quality comprehensive dental insurance or a comprehensive dental savings plan like the Direct Dental Savings plan.
When an insurance company says it will pay 100%, 80% or 50%-what is that calculation based upon? The dentist’s actual fees charged-almost never! Virtually, every policy has a schedule of fees allowed (or a maximum allowable fee schedule) for each dental procedure. In reality, this is often lower than the dentist’s actual fees charged. In some cases, this fee limitation may be more than 50% lower than the dentist’s actual fees. Different insurance company policies can have very different allowable fees: one policy/company may only allow $500 for a procedure when a different company/policy allows $1300 for the very same procedure. It is very important to note that this is all calculated and stipulated by the insurance company and often hidden in the “fine print.” Even if you are smart enough to ask for these, the answers may be very confusing.
Most people look towards dental insurance to offset the costs of major dental treatment. Unfortunately, many people do not realize until it is too late that many dental insurance companies/policies have a stipulation that major dental work will not be covered for a specific period of time after the patient has enrolled in the insurance. We sometimes see waiting periods of up to one year before major work is covered by the policy. Unfortunately, this often means a long wait and further deterioration in dental conditions, sometimes leading to even more treatment and a greater expense for the patient.
Depending upon your expected treatment needs, you should very carefully check the list of excluded dental treatment in any insurance policy you are considering. The list of treatment exclusions can vary considerably.
Time consuming paperwork and mandatory treatment pre-estimates delay treatment, sometimes excessively. If you are in pain-you can’t wait. Does your insurance require a pre-estimate before you get an accurate report of whether the insurance company will pay for a procedure and how much it will pay? Are the estimations of benefit statements and benefit payment records from your insurance company easy to read and clearly explained? Can you easily determine if the insurance company is paying for procedures accurately? Many people express a great deal of confusion, frustration and many concerns about this issue.
The critical details are all the specifics within the fine print that work together to limit the financial benefits of an insurance policy or dental discount plan. With dental insurance, any payment made during the year counts against your annual maximum benefit (yearly maximum insurance payment). So with insurance, all the payments made towards your yearly routine preventative dental care (like cleanings, checkups, and x-rays) are deducted from your annual maximum. With the Direct Dental Savings plan, your savings can be unlimited. There is no annual maximum. Therefore, you are still able to save an unlimited amount on any and all dental work over and above your annual routine dental care. This is actually one of the biggest benefits of the Direct Dental Savings plan compared to insurance. (insert hyperlink here) Look at the chart of comparisons carefully. With dental insurance your yearly maximum payment or savings is limited. With the Direct Dental Savings plan, the larger your dental treatment costs the greater your savings, isn’t that the way it’s supposed to be? From our comparisons, anybody that needs extensive dental care will save more with the Direct Dental Savings plan.
Insurance companies are beginning to realize that the general public is getting somewhat smarter about comparing different policies. In order to make it seem like you’re getting a great deal, insurance companies will often stipulate higher yearly maximum benefits or percentage reimbursements-but don’t be fooled too easily. Cleverly, they do not clearly stipulate what fee schedule allowance these percentages or yearly maximums are based upon. The math can easily work against you. For instance, if an insurance company says it will pay 100% of a procedure, but the allowable fee maximum on that procedure is $500, they are actually paying less money out in reimbursements than another insurance plan that would pay 50% of the very same procedure with a fee schedule allowance of $1300 ($500 versus $650). It should be obvious that if the entire reimbursement level of the policy is based upon a very low allowable fee schedule for each and every procedure, they could also stipulate a high yearly maximum total benefit to make the plan sound even better, but because of the math, it may be very difficult for the average patient to reach that yearly maximum benefit. These calculations are rarely obvious to even the most careful consumer.
