There’s no doubt that dental work is expensive, especially when you have major work to do, which is why so many people end up asking, “Do I need dental insurance?” If you are not covered by your job, you may have to buy it yourself. However, purchased individually, dental insurance can be a waste of money if your plan doesn’t fit your needs.
Let’s see how to explore 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 maximum limit and some procedures have high coinsurance payments.
- Some procedures, such as orthodontics and cosmetic dentistry, are not covered at all.
Overview of dental insurance
First, here’s a breakdown of how individual dental insurance works. You select a plan based on which providers (dentists) you want to be able to see and what you can afford to pay.
- 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 any of the network dentists and again have the option of a cheaper plan.
- 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 more that you may not have a chance of getting away with being insured. . .
Monthly premiums will depend on the insurance company, your location and the plan you choose. For many people, the monthly premium will be around $50 per month. That means you’re spending $600 on dental bills every year, even if you don’t do any work.
Is dental insurance worth it?
Now, you might be thinking that most people don’t win with 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. With health insurance or home insurance, for example, the downside potential is so high that hardly anyone can afford to be uninsured. With dental insurance, the potential downside is quite small, as is the potential upside.
In a good year, when all you need are the standard cleanings, exams and x-rays that are good preventative care, you could be losing money by having dental insurance. For example, if you pay out of pocket for these services, you might spend about $400 for the year, while you might spend $600 for the year on insurance premiums.
Seniors are one group that may find it useful to enroll in a dental insurance plan. Dental insurance for seniors is similar to plans for other people, but focuses on the types of coverage seniors may need. These include crowns, root canals, dentures and tooth replacements. Even though these coverages are not unique to older adults, there is a higher likelihood that older adults will need one or more of these procedures. Note that seniors with Medicare may need a different dental insurance plan than those without.
Will it be there when you need it?
What about when you need work? In a really bad year, your dentist might tell you that you need a few fillings, a root canal, and a crown. On top of that, you will still have to pay for your regular cleanings, exams and x-rays. It’s time to be insured, right? It depends.
Unfortunately, your insurance may not be as useful as you would like. Some dental insurance plans have low annual caps of around $1,000 (this varies by plan and provider, of course). Once 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 fee for the work you need as a benefit of having insurance, but even the negotiated fee can be quite high. For example, if the dentist’s regular fee for a filling is $150, the negotiated fee could be $100. In this situation, your regular oral care and fillings could use up most or all of your annual maximum, so only a fraction of your large dental bill could be covered. You could still pay out of pocket between $1,000 and $2,000, plus your annual premiums of $600.
On top of that, while you can pay 0% coinsurance on preventative maintenance and 20% on fillings, root canals and extractions, the insured’s share of expensive procedures such as crowns, bridges and implants tend to be 50%%. This is known in the industry as the 100-80-50 hedging structure. Even if you haven’t used your annual maximum by the time you need 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, yearly maximums often still prevent you from saving much, if anything, after factoring in 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 won’t work
If you think you’re just going to stick it out and get dental insurance when you need it, think again. Due to what’s called a waiting or probationary period, this strategy won’t work (you didn’t really think you had found a way to outsmart the insurance companies, did you?) . Waiting times mean that, for example, one year after your first membership, your insurance will not cover any large jobs (such as crowns or root canals) and for three months after your first membership, it will not pay for any minor jobs ( such as fillings). Waiting periods 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, get insurance, wait 12 months, then take care of it. If you try to do this, you’ll probably suffer a lot of discomfort and eventually lose your tooth (and pay a heavy price for that extraction).
Even with employer-sponsored group plans, it’s important to carefully review the details of the plan to find out if it’s cost-effective for your particular situation.
Considerations for group plans
Surprisingly, even if your employer offers dental insurance, you might be better off ignoring it. Many people assume that employer-sponsored benefits are automatically a good deal because you receive a group rate, but that’s not necessarily true.
When evaluating your employer’s dental plan, be sure to look at monthly payments, annual maximums, and coinsurance. Your employer may offer you a great plan at just $20 a month to cover your entire family with a generous annual maximum, or a mediocre plan at $50 a month with an annual maximum of $1,000. With the first you can really enjoy it, but with the second you risk wasting your money. Do the math for your own situation to determine if you are likely to come out on top.
One situation where it may make sense to get dental insurance, regardless of whether it seems like a good deal in the long run, is if you live paycheck to paycheck with little or no money saved. When you don’t have dental insurance, you need to be able to pay a $1,600 bill when you’ve done the work (if not in full, then in prompt installments). If you can’t make it and your options are to overpay for dental insurance, neglect your only teething, or put dental work on a credit card you’ll struggle to pay for, then your best bet is to get the Insurance. You’ll probably waste less money on insurance than you would on paying interest on a credit card or letting your dental health deteriorate.
If you cannot participate in a quality group dental plan, either a Preferred Provider Plan (PPO) or a Dental Health Maintenance Organization (DHMO), then the best way to get out ahead of dental expenses may be paying for everything out of pocket. Brushing and flossing regularly, switching to an inexpensive electric toothbrush, getting professional cleanings every six months, and going to a dentist who does high-quality work that lasts for years may be the easiest ways. more effective in saving money in the long run.