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Don’t Buy Dental Insurance on-line until you have all the facts!

There are many new individual dental insurance plans showing up on Obamacare websites and elsewhere.  There are also ACA-compliant healthcare plans and Medicare supplemental plans that include dental insurance or offer it as an add-on.

These are new products for the most part, and might be confusing.

Are these policies a wise choice for me?
You be the judge.  First there are some things you should know.  Here are some answers to common questions to help you decide.

Is Dental Insurance a mandatory part of Obamacare?
No, only for children; there is no dental insurance requirement for adults in the Affordable Care Act.

Does dental insurance work like my medical insurance?
Not at all!  It is an entirely different product.  For instance, unlike medical insurance that has very high maximum benefits and typically low co-pays, dental insurance has low maximums and high co-pays on treatment other than preventive.

A typical policy has only a $1000 per year maximum, while $2000 is the highest yearly benefit we’ve seen for an individual policy.  And the premium for a policy with a $2000 maximum will usually be about $1000 per year with co-pays on top of that that can be half of the fee or more on restorative services.  The sad fact is, most people are disappointed when they realize how limited dental insurance is compared to medical.

Can I keep my dentist if I buy one of these policies?
That depends on which insurance policy and on whether your dentist has signed a contract with the insurance company you buy from.  Most of the individual policies being offered are PPOs.  Some PPO plans require policyholders to go only to a dentist who is under contract with them.  Fortunately, many still allow you to go to your out-of-network dentist and still get your benefits paid.

Dentists who sign the contract are required to accept the fees and rules set by the insurance company.  Because the fees offered by the insurance company are invariably low, and the rules tend to be intrusive, many dentists feel they cannot provide the level of care their patients are accustomed to if they give that level of control to the insurance company.   If you don’t see your dentist’s name on the list of preferred providers, this is the likely reason. 

Does an individual dental insurance I can buy on-line plan actually save money vs. paying for the services directly?
To save, you would have to receive more in benefits than you pay in premiums.  If everybody consistently got paid more in benefits than they pay the insurance company in premiums, that company would go broke.

Typically, you will occasionally have a year when you come out ahead by using all your benefits, but other years you use less in benefits than you pay in premiums.  Keep in mind too, the insurance company has high administrative costs and profits to consider in how they determine pricing for a policy.  Paying directly to the dentist eliminates that whole layer of expense.

Why does dental insurance cost so much for such a low benefit?
As already mentioned, it is impossible for the insurance company to cover the cost of a staff of claims processors, administrators and managers, plus company overhead and profit, without adding to the cost of your dental care.  With individual policies, people won’t buy if they aren’t going to use it.  So the insurance company can’t rely on a large number of people paying and not using it as with large employer groups, and has to work with a much tighter profit margin and must price the policy higher.   The narrow margin is also why these plans are usually PPO plans that pay the dentist very low fees.

What’s the worst that can happen if I don’t have dental insurance?
We all know that dental expenses can add up to a lot of money when there are complex issues.  But those expenses can be assessed and planned for and usually are not urgent.  And even with careful planning, insurance benefits would still only contribute your policy’s yearly maximum and leave the rest for you to pay.  If your situation were that you needed multiple implants and prosthetic teeth, you could be facing a cost in the tens of thousands, and still get only $1000 or $1500 from your insurance.  So unfortunately, dental insurance doesn’t do much to assist when you  need it most.

The most common dental emergencies such as a broken or abscessed tooth can be completely resolved for costs that range from a couple hundred dollars to a maximum of about $3000.  A typical insurance policy in this instance might cover half of that cost at best, and then only if you hadn’t already used your benefits that year.

Having dental insurance only changes your per-year risk exposure by the difference between your premium and your maximum benefit.  You reduce your net risk by only $500 to $1000 per year, depending on the policy you choose.  With that in mind, you need to look closely at the cost and decide if it is worth buying insurance to cover such a limited amount of your risk.

Are there any alternatives to dental insurance that offer some of the same advantages without all these disadvantages?
Yes. There is a different kind of plan created by a few innovative dental practices that eliminate the ‘middle man’, the insurance company.  This not only eliminates the expenses inherent in insurance, it also eliminates the ‘red tape’, the claims, the uncertainty of whether a claim will actually be paid, etc.  For detailed information on a plan like this, available at Morgan Dental Care, click here.