How Much Does Dental Insurance Cost?
Understanding The Issues Affecting The Price of Dental Coverage
Like most other forms of insurance, dental plans have a wide range of premiums. A premium is the monthly fee paid to an insurance company by an enrollee covered by their dental plan. A survey of plan premiums for 41 plans (from 10 different insurance brands) quoted to a 22-year old male living in Los Angeles, California found the lowest cost plan charging $7.50 a month while the most expensive charging $98.38 a month.
These price differences often reflect material differences among the plans that go well beyond brand. Among the most important factors affecting price are:
- Type of dental network
- Maximum benefit
- Breadth of benefits
Type of Dental Network
There are several types of dental networks available among today's dental plans. Highly restrictive networks within dental Health Maintenance Organizations (HMOs) are typically associated with low monthly premiums. However, HMO plans limit dental care to in-network providers. In order to see an in-network specialist (such as an oral surgeon), an enrollee must have a referral from their in-network dentist. HMO dental plans also lack the plan maximums (see next section) that limits an insurer's annual payments toward an enrollee’s dental care.
Preferred Provider Organizations are dental networks where an enrollee can choose to use out-of-network dentists, albeit at higher out-of-pocket costs. PPO dental plans are the most common form of dental plan currently in the American market and dental specialists can be used without obtaining a referral.
Indemnity dental plans do not have the network considerations of either a HMO or PPO. An indemnity plan reimburses dental care at "usual and customary fees" but this does not guarantee it will cover the charges your specific dentist charges.
Maximum Benefit for Plan
A plan's maximum benefit refers to the limit on how much a dental plan will pay toward your dental care within a given coverage period (normally a year). An example of a very low plan maximum is $500 annually. A high plan maximum, in comparison, $3,000. A very high plan maximum may be as much as $5,000, though such maximums are currently rare in privately purchased dental insurance market (also known as the "individual market").
PPO and Indemnity dental insurance often have a plan maximum while dental HMO insurance does not.
Dental plans do not have standardized benefits and this has multiple cost implications. First, more benefits often raise the cost of the monthly premium. Additionally, narrow benefit designs leave many dental services uncovered. Narrow benefit designs increase how much a consumer pays for those services because the insurer does not contribute to paying the costs.
You can review the range of dental services covered by a dental plan in its Summary of Benefits or its plan brochure. You can also use the Plan Details feature on online shopping tools such as DentalInsurance.com.
One last comment on dental benefits. Some plans may cover certain services but only after you have been in the plan for a period of time (e.g 6 months). This delay on coverage is referred to as a "waiting period".
The same dental plan for two consumers with the same age may differ cost depending on where each applicant lives. For example, one plan may cost $85.44 in Carson City, Nevada but almost 8 percent more in Los Angeles, California. One of the reasons for the difference in premiums is that dentists in the Los Angeles region may charge higher fees for services than their counterparts in Carson City. Another potential factor is whether there are many competing dental plans in an area or only a few. Typically less competition means higher prices.
One Last Word of Advice
This article has focused mainly on explaining the forces behind differences in premiums among dental plans. However, the money you spend on out-of-pocket costs (e.g. copayments, deductibles) are also important. That's why we recommend you consider issues such as benefit breadth and waiting periods. Our article explaining the differences between affordable dental insurance versus cheap dental insurance discusses this issue. You should also know that not all dental plans are insurance. Some plans are discount programs that are not insurance but do provide reduced prices for a wide variety of dental care.