Cheap Dental Insurance vs. Affordable Dental Insurance
How to Accurately Compare Costs & Save Money
One of the most popular terms people search for online when looking for dental coverage is "cheap dental insurance." The problem with this phrase is that it is likely finding the lowest premium dental plan but not the dental plan with the lowest costs. Confused? Don’t worry. In this article, you’ll learn how:
- Anticipated usage and benefits determine the total cost of a dental plan
- Benefit caps, waiting periods, and out-of-pocket charges can make a cheap dental plan an expensive one
Once you have this information in hand, you’ll be a better educated dental insurance shopper and someone able to distinguish affordable dental insurance from cheap dental insurance.
IF YOU ONLY SHOP ON PREMIUM, YOUR DENTAL SPENDING MAY RISE CONSIDERABLY
The first mistake made by many shoppers for private dental insurance is to limit plan comparisons to premiums. Unfortunately, dental benefits and out-of-pocket costs are not standardized so the devil is in the details. When comparing dental plan expenses among plans, always look at the total cost of ownership. The total cost of ownership refers to the extent of dental spending in a year that includes:
- Every premium paid within a year
- Spending on deducible, copayments, and coinsurance fees for anticipated usage during a year
- Other out-of-pocket costs that you will pay for dental services not covered by the plan
To begin this comparison, you need to estimate what your future dental usage will be. This includes:
- The number of routine cleanings you get per year (e.g. 2)
- The number of x-rays you get each year
- The number of fillings, crowns, and other dental services you expect for the coming 12 months
One way to estimate your future dental usage is to review your last few years of dental care and average it out for a single year. However, if you know you have a tooth that is at risk of cracking or has a cavity needing attention, be certain to estimate the appropriate care. Likewise, if you or a member of your family will need braces, factor that care in as well.
Once you have that list of services, you can example each dental plan details for:
- Coverage (or non-coverage) of the services you expect to use
- The copayments or coinsurance charged for the service
- The deductible that must be paid before the plan begins sharing the expenses of dental care
A brief comment is needed on copayments and coinsurance. Copayments are flat fees charged for a dental service. For example, a plan may charge $75 for a standard single side filling. A coinsurance fee is a percentage of the total cost of a dental service paid by the enrollee. For example, if a crown costs $1,000 and the coinsurance fee is 40% than you would pay $400 for the crown.
The above cost information forms the beginning of your comparison of total cost of ownership for each dental plan. However, dental plans have a few idiosyncrasies that may further increase costs. First, some services (such as a crown) might not be available until the expiration of a waiting period. A waiting period is a requirement that a minimum time (such as six months) pass between the activation of an insurance policy and when the policy will pay for a certain type of care covered by the policy. If that care is received before the expiration of the waiting period, the enrollee pays full price for the service without help from the insurance plan.
Another idiosyncrasy of dental plans is a cap on dental benefits. A given plan may only pay $1,500 in total benefits within a year even if you use $10,000 in care. Consequently, you need to look carefully on benefit caps before enrollment. Join a plan with a low benefit cap and you might find yourself paying a lot out of pocket despite your premium payments to an insurance company.
A last consideration of dental plan payments concerns dentist networks. Dental networks are often highly restrictive and very low cost dental plans may attract dentists who would not be considered top quality but who are willing to accept a low payment rate from a cheap dental plan. If you have a preferred dentist, verify that he or she is accepted by the plans you are considering. If you do not have a dentist, review the local dentist lists for the plan and see if the dentists receive good reviews from sources such as HealthGrades or Yelp. If you enroll in a plan and use an out-of-network dentist, you may:
- Owe the full price of dental care without help from the insurance plan
- Receive a large bill that charges the difference between the dentist’s normal rates and the dental plan’s reimbursement rate
Anticipated Usage vs. Worst Case Scenario
In the previous section, I recommended that you calculate the annual dental costs of different plans based on your anticipated dental care usage. That recommendation deserves some additional context. When considering upcoming dental care, there is the matter of what you will probably use given past experience and then there is the matter of a worst case scenario. Sometimes teeth break unexpectedly or you need unexpected care such as an urgent root canal. It is good to consider the risk of such events in your dental care comparisons because some plans are better than others with respect to their protections for such events.
Where Do You Go from Here?
Armed with the knowledge from this article, you should be able to compare dental plans like an expert. Start by finding the plans offered in your area and then begin your evaluation of total cost of ownership for plans. If you are willing to spend the time on this comparison, you can improve your chances of saving money and lessen the prospect of uncovered dental bills that make a cheap dental plan an unaffordable one.