Dental insurance has been around since the 1960s. When it was first introduced, premiums were paid by employers, annual maximums were a generous $1000 – $1500 per year. In the past 50 years, the annual maximums have fallen to 1/10th of their original levels due to lack of adjustment for inflation and employees are frequently expected to select a plan and contribute towards the premiums. What used to be insurance, is now more like a pre-payment plan for preventive dental care.
Many people are surprised when dental insurance doesn’t cover all of their treatment needs. Insurance companies, eager to reduce losses and increase profits, design contracts that make patients pay “coinsurance” or “copays” to give incentive to the patient to avoid treatment. I guess insurance companies think people would try to have all kinds of unnecessary dental treatment if there was no financial penalty. That may be true for cosmetic procedures, but I don’t think many people would volunteer for an unnecessary root canal just because it was free to them.
There are several products called dental insurance that work very differently and you may be asked to choose between plans that are not clear on coverage.
Indemnity type dental insurance is what most people think about when they think of insurance. It works a bit like car insurance. Work is done, a claim is submitted to the insurance company, and the claim is paid based on contract provisions, limits and exclusions. Any non-covered charges are the responsibility of the patient.
Dental Health Maintenance Organizations (DHMO) differ from indemnity insurance in that the dentist is a party to the contract and agrees to a discount fee schedule. The dentist may actually receive a monthly check for each patient signed up at his office with deep discounts for services provided. This may actually provide a financial incentive for the dentist to delay treatment or reduce recall visits. There is typically no coverage for dental work done by non-contract dentists. Before enrolling in a DHMO, you should find out if there is a dentist you would find acceptable on the list of providers.
Preferred Provider Organizations (PPO) are similar to a DHMO in that there is a list of contract dentists that have agreed to reduced fees. Typically, you are also allowed to see out-of-network dentists, but you may be responsible for non-covered charges.
So where can you get affordable dental insurance? As an individual, you can’t. That’s not exactly true, but typically the cost will be very high for people who usually have just routine care, and the limitations are too restrictive for people requiring a great deal of care. In most cases, an individual is better off putting money aside that would be spent on insurance, and using it to pay their expenses.
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