We are in the midst of open enrollment, and I’m getting a lot of questions lately about dental insurance. There are some choices for dental insurance on the Marketplace, but they all appear to be just basic coverage (cleanings and maybe checkups), and it appears that you will have to use the provider that is in-network. Often this is not a good fit. One option is to take a look at some of the health insurance plans which do offer some coverage on dental for kids. Again, this will be very basic coverage, which is fine, if checkups and cleanings are all that the kid’s expected needs are.
But the main question I get asked a lot has to do with the dental insurance yearly maximum. I find that many people do not truly understand dental insurance, and it is important to know that dental insurance is very different from medical insurance. With medical insurance, you will have a deductible and possible co-payments. If you need a large amount of medical treatment done, you will hit your out-of-pocket maximum and things are covered. Dental insurance does not work this way. Dental insurance has a yearly maximum amount.
What does that mean? So, back in my days, when I used to run dental practices, there were a lot of times people would come in and need tons of treatment done. I mean tons, like $1000s and $1000s of dollars. And they had insurance and so asked what their portion to pay would be. Often I’d reply with something like “$7000.” And they would be completely shocked since they were under the impression that their insurance covered a bulk of services. But in reality, their dental insurance had a yearly maximum of $1000. Some dental insurances will have a maximum of $1500, possibly $2000, but that is in very few cases.
An interesting fact – back in 1970, that average dental plan paid out $1000. 51 years ago, and now the average payout is $1500. In 50 years, that is a $500 increase, roughly $30 per year. Thinking about how much costs have increased since 1970, this is crazy. Back then a crown cost about $250, whereas today, it costs at least $1500. Thus the maximum yearly limit on your dental insurance is not going to go very far at all.
There is another kicker to dental insurance, and that is the waiting period for major services.
Not only is there a waiting period before you can use your insurance on major services, but it will only pay 50% of the coverage. So, if your crown costs $1500, the insurance will pay out $750 (maybe). And I say “maybe” because the dental insurance will come back and give you 50% of ‘usual and customary’ which means what they think the dentists should charge. And they’ll pay 50% of that. For example, if the crown costs $1,500, but the insurance company thinks it should cost $100, they are only going to pay you $500, not $750. Because of these factors, my advice to clients is that if you need a large amount of work done, is to instead look at dental savings plans, as these can oftentimes make sense.
I always advise my clients to do the math. Work out what you are going to pay in premiums versus the payout you are going to get and decide if it is worth it. And insurance can be worth it for some people, who can’t necessarily save and want to know that their cleanings, X-rays, and checkups are covered. A lot of individual dental offices have their own in-house membership where you pay X amount per year and it covers all your basic cleaning and exams for the year and then you get a discount on any services you may need. Sometimes the math works out in your favor.
Everyone has a unique situation. If you need dental work done, it may be in your favor to get dental insurance and a dental saving plan. I’m happy to provide you with information. United Healthcare has some standalone products and Delta Dental does too.
Delta Dental is probably the largest nationwide provider does and it does have in and out-of-network benefits. You will pay the difference if you go out of network, so you’ll save more money staying in network. So if you love your dentist and you don’t want to switch, Delta Dental PPO is a good choice. If you don’t mind going to whomever then we can look and see what the price differences are. But in general, with dental insurance usually, if you look at what you’re paying out versus what it’s paying, it’s usually not a good fit. Hop onto my website to book an appointment with me to discuss any questions you may have.
