There’s no doubt that dental care is expensive, especially when it comes to major work, which is why so many people end up wondering whether to buy dental insurance. If you are not covered by your job, you may have to buy it yourself. However, if you purchase individual dental insurance, you risk losing money if your plan does not meet your needs. Let’s see how to review these plans to find out if dental insurance is right for you.
Key points to remember
- Individually purchased dental insurance, as opposed to participating in an employer-sponsored group plan, is not always worth the cost.
- Coverage usually has an annual cap and some dental insurance procedures result in high coinsurance payments.
- Some procedures, such as orthodontics and cosmetic dentistry, are not covered at all.
Overview of dental insurance
First, here’s an overview of how individual dental insurance works. You choose a plan based on which providers (dentists) you want to see and what you can afford.
- If you already have a dentist you like and they are part of the insurance company’s network, you can opt for one of the cheaper plans.
- If you don’t have a dentist at all, you can choose from network dentists and, again, opt for a less expensive formula.
- If your current dentist is out of network, you can still get insurance, but you’ll pay a lot more to see an out-of-network provider, so much so that you may not have a chance of getting out with insurance.
Monthly premiums depend on the insurance company, where you live and the plan you choose. For many people, the monthly premium will be around $50 per month. That means you’re spending $600 a year on dental bills, even if you don’t have work done.
Is dental insurance worth it?
You might think that most people don’t buy most types of insurance, and you might be right. After all, if the insurance companies didn’t make a profit, they would all go bankrupt. The insurance is designed to protect you in the worst case scenario. However, dental insurance is very different from most other types of insurance. In the case of health insurance or home insurance, for example, the risk is so high that hardly anyone can afford not to be insured. In the case of dental insurance, the risk of loss is relatively low, as is the risk of gain.
In a good year, where you only need the standard cleanings, exams and x-rays that are good preventative care, you could be wasting money buying dental insurance. For example, if you paid out of pocket for these services, you might spend about $400 for the year, while you might be spending $600 for the year on insurance premiums.
Will it be there when you need it?
And when do you need to do work? In a really bad year, your dentist might tell you that you need a few fillings, a root canal and a crown. In addition, you will have to pay for your usual cleanings, examinations and X-rays. It’s time to be sure, isn’t it? It depends.
Unfortunately, your insurance may not be as helpful as you think. Some dental insurance plans have low annual caps, on the order of $1,000 (this of course varies by plan and provider). When your dental bills exceed $1,000 in any given year, you are obligated to pay the rest of the bills in full. The insurer will not pay more than $1,000 in treatment.
You can always pay a lower negotiated rate for the work you need because you have the benefit of having insurance, but even negotiated rates can be quite high. For example, if the dentist’s usual fee for a filling is $150, the negotiated fee may be $100. In this case, your regular oral maintenance and fillings could use up most or all of your annual cap, so only a fraction of your large dental bill might actually be covered. You could still pay $1,000 to $2,000 out of pocket, plus your $600 in annual premiums.
Also, while you can pay 0% coinsurance for preventive maintenance and 20% for fillings, root canals and extractions, the insured’s share of expensive procedures such as crowns, bridges and implants is usually 50%. This is known in the industry as the 100-80-50 hedging structure. Even if you haven’t used up your annual cap by the time you have to have the expensive procedure, you’ll still have to pay several hundred dollars for it.
What is not covered
Dental insurance also rarely covers expensive procedures such as orthodontics and cosmetic dentistry, even if you try to argue that you need a procedure to relieve emotional pain and suffering. When insurance covers them, annual caps often still prevent you from saving much, or even saving, after taking into account your semi-annual cleanings and exams.
Most dental insurance plans have a waiting period where major procedures are not covered for one year after the start of the plan, minor procedures are not covered for three months.
Waiting doesn’t work
If you think you’re just going to hold on and buy dental insurance when you need it, think again. Because of what’s called a waiting or probationary period, this strategy won’t work (you didn’t really think you’d found a way to outwit the insurance companies, did you?) . Waiting periods mean, for example, that for one year after your first insurance your insurance will not cover any major work (such as crowns or root canals) and for three months after your first insurance it will not pay for any work minor (like fillings). Wait times vary by policy.
Insurance companies know that when you need a filling or a crown, you need it now: you can’t find out you need a crown, buy insurance, wait 12 months, and then get you treated. If you try to do this, you will probably suffer a lot of discomforts and eventually lose your tooth (and you will have to pay a high price for this extraction).