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When you compare health insurance versus dental insurance you will notice that they are nearly complete opposites. People have health insurance to cover themselves in a catastrophic event and end up paying out of pocket for most of the preventative medicine (checkup exams, etc.) until they reach their deductible. Dental insurance usually works in reverse. Because most dental disease is preventable, dental plans are structured to encourage routine care. Your insurance usually covers 100% of your preventative care and you pay a portion of your treatment cost up to your maximum allowance, at which time you pay 100% for any remaining treatment.
There are three parties involved in the dental insurance game: you (the patient), the dentist, and a third party with whom you or your employer have contracts for coverage. The third party's primary responsibility is to provide the financial foundation for your dental benefits plan. There are three types of third parties.
Dental Service Corporations: Not-for-profit organizations that negotiate and administer contracts for dental care to individuals or groups of patients.
Insurance Carriers: For-profit companies that underwrite the financial risk of, and process payment claims for dental services.
Self-Funded Insurers: Companies use their own funds to underwrite the expense of providing dental care to their employees.
The four most common kinds of plans are:
With these programs, your employer reimburses you directly for part or all of your dental treatment expenses. All procedures and treatment methods are usually covered, and you can see any dentist you choose. The plan may limit the amount of dollars an employee can spend on dental care within a given year, but often places no limit on services provided.
With this organization, also known as a Closed Panel Plan, you must choose from a group of dentists who have agreed to discount their fees so that they can be a part of the organization. If the patient chooses to use a dentist who is not a preferred provider, then the patient will be required to pay a greater portion of the service. Exclusive Provider Organization (EPO) is another Closed Panel Plan that is similar to a PPO, except if the patient chooses to go outside of the network the service will not covered. The number of providers under the EPO plan may be limited because dentists don't like the substantial fee reductions that the plan requires. Participating dentists may be salaried employees of the EPO plan.
Also known as a Dental Health Maintenance Organization (DHMO). In this type of plan participating dentists receive a fixed monthly fee based on the number of patients assigned to the office. Because these plans compensate dentists so poorly, dentists usually must see many patients at one time and get to spend little quality time with their patients. In addition to premiums, patient co-payments may be required for each visit.
The most common insurance programs are indemnity plans, which are also called UCR (usual, customary, and reasonable) programs. This type of plan pays the dentist of your choosing on a traditional fee-for-service basis. The monthly premium is paid by the patient and/or the employer to an insurance carrier, which directly reimburses the dentist for the services provided. Insurance companies usually pay between 50 percent and 80 percent of the dentist's fee for covered services; the remaining 20 percent to 50 percent is paid by the patient. These plans often have a pre-determined deductible, a dollar amount which varies from plan to plan, that the patient must pay before the insurance carrier will begin paying for care. Indemnity plans also can limit the amount of services covered within a given year and pay the dentist based on a variety of fee schedules.
Referring to the program and its fees as "usual, customary, and reasonable" is misleading and causes some people a lot of confusion. These UCR fees are set by the insurance company and do not represent local dentists' fees. In fact, the UCR fee will vary between dental offices in the same local area!
To control dental treatment costs, most plans will limit the amount of care you can receive in a given year. Despite inflation and cost of living increases, the average annual coverage maximum has stayed at approximately one thousand dollars for the past 40 years. However, during that time, the fees for procedures have increased 3-4 times!
It is important to know specifically what services your plan covers with your spending limit. Planning ahead will allow you and your dentist to plan treatment that will minimize your out-of-pocket expenses while maximizing compensation offered by your plan.
When comparing dental insurance plans, consider the following in order to determine whether the coverage is right for you: