Like health insurance, dental insurance pays part of the costs associated with dental care in exchange for a monthly premium. Also like health insurance, dental insurance can be quite confusing, as each plan has its own policies, exclusions, and other important details.
Unlike health insurance, dental insurance is not regulated by the Affordable Care Act. Dental insurance policies still feature many of the limitations and restrictions that are now illegal in the health insurance industry. Many dental plans have very low annual caps, pay only a small percentage of costs, and have long waiting periods before anything beyond preventive care is covered.
Good dental insurance is tough to find, and many people try several plans before finding one that is truly right for their family. Here is what you need to know about dental insurance.
Buying Dental Insurance
Dental insurance may be available to you as an employee benefit, though this is becoming less and less common. Even if your employer does offer dental insurance, though, it may not be the best plan for you. Individual dental insurance plans on the open market are not significantly more expensive than employer-sponsored plans, so be sure to shop around to find the right plan for your family’s unique needs.
Some health insurance companies offer the option to add on dental insurance. It is important to read the fine print, though, to make sure the deductible for dental care is separate. Stand-alone dental plans generally have deductibles of $100 or less, while many health care deductibles are in the thousands. If you must meet your health care deductible before using your dental benefits, the plan is probably not the best deal.
Types of Dental Insurance
There are three basic types of dental insurance, along with a fourth non-insurance option. Which one you choose depends on your specific situation, from the current condition of your mouth to how often you travel.
- Dental HMO: A dental HMO (health maintenance organization) pays only for dentists who are part of the network. Your plan might (or might not) cover emergency services out of network, but your regular care must be provided within the network.
This is generally the cheapest alternative, and it can work well for those with good dental health whose preferred dentist is in-network. However, if you prefer an out of network dentist, want to choose your own specialists, or travel frequently, you will likely find a dental HMO too restrictive.
- Dental PPO: A dental PPO (preferred provider organization) is a less-restrictive variation on an HMO. Your insurance will pay a higher percentage for in-network care, but care outside the network will also be paid at a lower percentage.
This moderately-priced option makes sense for the way that many people like to use dentists. You can select an in-network primary dentist, while retaining the freedom to go out of network for specialized care or when you are traveling.
- Dental Indemnity: Dental indemnity plans cost the most, but they also provide the most freedom, especially for those whose preferred dentist is not part of a network and those who frequently travel. You can see any dentist you choose at the same coverage rate, as long as the dentist agrees to accept the insurance plan. Most dental indemnity plans pay only in the United States, but some will also cover border towns in Canada and Mexico. If yours pays out of the country, find out if the bill is required to be written in U.S. dollars.
- Dental Discount Plan: A dental discount plan is not insurance, but it can save you some money. If you select a dentist who accepts the plan, you will receive all of your care at negotiated discount rates. Dental discount plans cost just a few dollars per month and can be combined with dental insurance. This makes them a great choice for those whose preferred dentist accepts their chosen plan. Some dentists even offer in-house discount plans.
Types of Services
For insurance purposes, there are three types of dental services: preventive, basic, and major. Insurers place a strong emphasis on preventive care, often covering it sooner and at a higher percentage than basic or major services. Many dental plans also have loyalty incentives, covering each category of services at a higher percentage after the first year.
Preventive care is designed to prevent dental issues before they start. It includes such services as cleanings, exams, and X-rays. Most plans cover preventive care immediately, at 80 to 100 percent of the total cost. It is almost always covered at 100 percent by year two.
Basic care includes procedures designed to save a tooth, such as fillings and root canals. Some plans cover basic care right away, while others institute a 6 to 12 month waiting period. Basic care is normally covered at 50 to 80 percent, depending on your plan and how long you have been with your insurance company.
Major care includes such restorations as crowns, bridges, and dentures. A few insurance plans cover major care immediately, at around 25 percent. However, most plans implement a waiting period of 12 to 18 months. After the waiting period, or the first year for plans that pay 25 percent right away, major care is generally covered at 50 percent.
Exclusions and Limitations
Different insurance plans handle services such as braces, Invisalign, and dental implants very differently. Some cover them as major services. Some cover them only for children under 18. Some do not cover them at all, and some treat them separately, with their own annual and lifetime caps. If you or a family member are likely to need these services, carefully read the fine print before signing a contract.
In general, dental insurance has very low annual caps, typically around $1000 to $1500 per year. Some plans pay more, up to $3500 or so per year, in exchange for higher premiums. If you are likely to need extensive dental work, it is well worth the higher premiums for a higher annual cap. Once you reach the cap, you must pay for all your own dental work for the rest of your plan year.
All dental insurance plans except discount plans also have annual and lifetime limits on various services. For example, your insurer might cover two cleanings per year and one set of dentures every five years, but only one set of braces for each family member in a lifetime. Carefully read your policy for details.
Direct Pay vs. Reimbursement
Some dentists, especially those who part of an HMO or PPO network, charge you only your expected out of pocket costs and bill the rest to your insurer. Others will file your insurance paperwork, but require you to pay the entire bill up front and wait for reimbursement. Neither is right or wrong, but how this is handled could affect your choice of both a dental insurance plan and a dentist.