Dental Insurance Basics
Roughly two-thirds of Americans have dental insurance. Most people receive coverage under a group plan. This could be from an employer or an organization such as Medicaid or AARP. You can also buy an individual dental plan. They come as riders on your medical insurance or as standalone insurance policies.
Dental plans feature both a deductible and a maximum yearly coverage amount. Your deductible is the amount you have to pay each year before your benefits kick in. A $50 deductible, for instance, means you pay for the first $50 of dental services out of pocket before your insurance kicks in.
Your maximum yearly coverage is the most your plan pays in a given year. Let’s say your $50 deductible plan also has a $1,000 annual maximum. After you meet your deductible, your insurance pays until you hit $1,000 in services for the year. Above that amount, you have to pay 100 percent of costs out of pocket.
The values listed above, $50 for the deductible and $1,000 for the yearly maximum, are pretty standard. You can find plans with lower deductibles or higher maximums. But the premiums are higher. Conversely, you can save on premiums by accepting a higher deductible or lower yearly maximum.
Indemnity Plans, HMOs, and PPOs
Most dental plans fit into one of three categories. They’re either indemnity plans, PPOs, or HMOs.
Indemnity plans pay a percentage of your dental costs and allow you to see any dentist. They don’t have networks or preferred providers. The benefit of an indemnity plan is it gives you the freedom to seek out any dentist you’d like rather than picking one from a list. But these plans often pay a lower percentage than PPOs and HMOs. This is because they don’t maintain special relationships with individual providers.
HMOs, or health maintenance organizations, restrict you to a specific list of dentists. To receive benefits, you have to see a dentist from the list. HMOs often give you the most benefits for the lowest premiums. But they come with two significant drawbacks. The first is the lack of choice. The other is that dentists themselves are often sour on HMOs. Many of them report they don’t receive adequate compensation for seeing patients on HMO plans. As a result, patients sometimes report being rushed through their visits and only receiving basic services while on HMOs.
The third type of dental insurance is a PPO or preferred provider organization. A PPO is like a hybrid between an indemnity plan and an HMO. Your PPO plan gives you a list of providers, just like an HMO. You receive the highest benefit amount by seeing dentists on this list. But the plan also covers dental visits outside your network, albeit at a lower level.
What Dental Insurance Covers
A typical dental plan provides coverage in three categories: preventative care, basic procedures, and major procedures.
Preventative care includes dental exams, cleanings, and X-rays. Most dental plans cover these services at a high percentage, usually 80 to 100 percent.
Basic procedures are things like fillings, extractions, and root canals. Dental plans usually cover these items at a slightly lower amount than preventative care. It might pay, for instance, 60 to 80 percent of basic procedure costs.
Major procedures include crowns, dentures, and implants. Dental plans cover these services, but usually at a small amount, such as 50 percent or less.
What Dental Insurance Doesn’t Cover
Dental plans don’t pay for every service dentists offer. The most popular item it doesn’t pay for is a cosmetic treatment. If you want your teeth whitened or veneers installed, you’ll have to pay out of pocket. Most insurers even consider braces cosmetic. This is particularly the case for popular adult braces, such as Invisalign.
Is Dental Insurance Worth It?
Whether a dental plan is worth it depends on the individual. Some people come out ahead with a dental plan. For instance, a typical dental insurance premium is $20 to $30 per month. That comes to $240 to $360 per year. If your plan has a $1,000 maximum and you use all or most of it, then your dental plan is worth it. But if you only receive basic services most years, you might pay more by having dental insurance.
That said, even if you rarely use all your benefits, dental insurance buys you peace of mind. It offers the assurance that if you have an unexpected $1,000 dental bill, you won’t have to come out of pocket.
Dental plans charge a monthly premium and then cover you for some or all of your dental services. They can save you money and buy you peace of mind. But it’s important to research and understand what your plan does and doesn’t cover.