Previously, I went over what dental insurance is and why you should have it. In short: Insurance is a tool that we can use to offset financial losses due to either accidents or unforeseen circumstances. In this post I will go over the different types of dental coverage plans. I say coverage for a reason, as you will see you have options other than insurance.
Dental Insurance Introduction
As mentioned above, insurance is always advocated to mitigate financial risk. However, if someone is young and healthy and doesn’t need to visit a dentist more than twice a year, dental insurance will not be a requirement. The premium for such insurance may be more than the annual tooth maintenance bill.
If you are like myself and have a turbulent dental history, you are advised to either purchase dental insurance or join a discounted dental plan. Bills can unexpectedly become very steep, so covering your ass-ets is essential ;).
What are things that affect your dental health? Dental hygiene, stress, personal eating habits, nutrition, etc.
The main types of programs available for dental coverage are Indemnity Plans, Preferred Provider Plans, HMO Plans, Discount Plans and Direct Reimbursement Plans.
Dental Indemnity Insurance Plans
These are normal, traditional insurance coverage plans where you get a percentage of your dental bills covered for a monthly fee or premium. You have the option of visiting any dentist you wish. There is no list of network providers or approved providers.
After paying your deductible, an indemnity plan normally covers 100% of preventive services (cleaning), 80% of restoration services (root canal) and 50% of major treatment like orthodontics (braces). These all fall under “usual and ordinary” procedures.
The most important thing to note is that the providers only provide coverage for “usual and ordinary” procedures. Obviously, this is a very subjective term. Before signing an agreement make sure to read all of the fine print to see exactly what is covered. While reading the fine print, also look at the maximum benefit amount to make sure you won’t reach your peak halfway through the year.
Reimbursements are handled on a UCR cost system (Usual, Customary, and Reasonable). If your dentist charges more than the policies UCR chart allows, you will only be reimbursed up to the maximum UCR value.
Dental Preferred Provider Plans (PPO)
These plans are typically offered by companies to their employers. The way they work is that they deal with a network of professionals that are qualified for use. Since the insurance company can guarantee the dentists business, the dentists can give discounted rates to the insurance company. In the end, everyone wins.
PPO’s usually have deductibles as low as $40 or $50. Some even have no deductibles! On top of that, you receive highly discounted rates on procedures. You will even find that more dentists participate in PPO’s because of how quickly they get paid with the least amount of hassle.
In the end, you need to look at the deductibles, the maximum benefit, the local dentists, and whether or not the local dentists can even treat you. All of these things are especially true if you have a family.
These are regulated by the state insurance department
HMO Dental Insurance
These insurance plans are also known as capitation plans. They operate like Health Maintenance Organizations (HMO). Most likely, if you do not have a PPO then you have a HMO.
Like a PPO, you must go to an in-network dentist. Unlike a PPO, though, a dentist cannot refuse to treat you. Also, PPO’s often times allow you to pay extra to go out-of-network. This option is not available with a lot of HMOs.
Basic services, like cleanings and x-rays, are usually provided free of cost. For less common procedures, the patient will be expected to cover some of the cost through a deductible.
As always you should read your terms and see if this fits your needs. If you travel out-of-network a lot, perhaps you would rather have a PPO. If your company offers a basic, low-cost, tier of a HMO service, then it may be best to just get the basic coverage just in case.
These are also regulated by state insurance department.
Dental Discount Plans
Discount dental plans are like clubs where you get the best deals when you show your membership card. Just think of Sam’s Club or Costco. These are, just like in the PPO and HMO, network based. However, these are not insurance. They are considered as a membership that allows you discounted access to a network dentist.
They give the best value to individual and family memberships. Often times the managing organizations have negotiated with local offices to get you discounts of up to 70% off of the ADA pricing code.
If you have any pre-existing conditions, you will not be disqualified, which is a major bonus. If you need work done, you can receive immediate treatment without meeting any waiting period requirements.
Direct Reimbursement Plans
I covered this in the first post.
These plans are the most expensive of the bunch. A company who partakes in a direct reimbursement plan creates a pool of money and sets it aside for any dental coverage. When an employee gets work done, the procedure is paid for by using the pool of money.
The simplicity of this plan makes it the most effective. Forget co-payments, deductibles, etc. The reimbursement is made using a simple formula. The ADA strongly recommends this plan, as well! However, this type of plan may not be affordable for a smaller company.
Summary: What’s the best option?
The costs will vary greatly depending on your employer, your dental situation, whether it is just you or if you have a family, your age, and a bunch of other factors.
Feel free to talk to your local dentist about which plan he recommends based on your dental situation. He may be biased, though, so get some more opinions from other people.
Hopefully giving you information on 5 of the more popular types of plans will aid you when it comes time for choosing your dental coverage!
