What Is a Maximum Benefit in a Dental Insurance Plan?
By Kev Coleman Insurance Industry Expert & Author
In this article
A “maximum benefit” is one of the trickiest concepts in dental insurance and if you don’t understand it, it may lead to high out-of-pocket costs. This resource will give you a quick tutorial on maximum benefits and demonstrate how this feature affects the financial protections represented by your insurance. The article includes:
An Introduction to Maximum Benefit Spending Limits
A maximum benefit is a feature typically associated with dental PPO insurance and dental indemnity plans. The maximum benefit is a dollar value that represents the most an insurance plan will pay for your dental care in a year. If a plan has a maximum benefit of $1,500 than any dental costs above $1,500 during the plan year is paid completely by the patient even if the dental service is covered by the insurance plan. The dental costs that count toward the maximum benefit reset each year, so if your policy begins on January 1st, you start with $0 spent by the insurance company toward your maximum limit.
A maximum benefit is sometimes called an annual maximum or a plan limit, but the concept remains the same. HMO dental plans and dental discount plans lack a maximum benefit but they come with trade-offs such as a narrow dental provider network.
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Are Dental Plan Spending Caps Legal?
Yes, a maximum benefit is legal spending cap in the dental insurance industry. In other types of medical coverage, such as Medicare Advantage plans and Affordable Care Act plans, there is no limit on an insurance company’s annual spending for covered care (though there are conditions on that care related to network, prior authorization, etc.). Moreover, both Medicare Advantage plans and Affordable Care Act plans also have a MOOP, which is a yearly limit on out-of-pocket costs paid by the patient for covered treatments.
DentalInsurance.com has observed maximum benefits as low as $500 a year. A single crown or dental implant could exceed this amount and leave a patient with substantially more to pay out-of-pocket. Thankfully, there are many options with more generous limits including dental insurance plans with very high maximum benefits.
Why You Need to Monitor Your Maximum Benefit
If you are enrolled in a PPO or indemnity dental plan that has a maximum benefit, you need to monitor that amount from year. Why? Inflation. As the cost of dental treatment increases annually, a static maximum benefit means your plan covers less now than it did when you first enrolled in the coverage. Some dental plans increase the maximum benefit over a three-year period as a loyalty reward for continuous enrollment. Other plans do not adjust their maximum benefit. If you are enrolled in a plan with a low maximum benefit (e.g. $1,000 annually), it would be wise on an annual basis to explore the cost other plans with higher maximum benefits (or plans that lack these caps altogether). A single dental implant can cost, in some cases, $2,000 and a patient with a $1,000 annual maximum would have to pay $1,000 out of pocket on top of his monthly insurance premiums in this scenario.
Another important issue related to a maximum benefit is if a dental plan has multiple maximum benefits that apply to different categories of dental care. Dental care is normally divided into three major groupings: preventive, basic, and major. Preventive care includes annual dental exams, x-rays, and cleanings. Basic care covers fillings, whether traditional or cosmetic white fillings. Teeth extractions, crowns, root canals, and implants are considered major dental care. While it is uncommon, a dental plan may have a lower maximum benefit for certain dental procedures than others so read the plan details on the maximum benefit. Procedures outside of traditional dentistry, such as braces, may also be covered by a separate maximum benefit if covered at all. Consumers should be aware that a high maximum benefit is of reduced value if the maximum excludes expensive types of major care (e.g. crowns, root canals, implants) or has a reduced maximum benefit for one of the three categories of dental care (preventive, basic, and major).
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Maximum Benefit Is Not Directly Related to Premium
There are a variety of dental insurance options on the market. Importantly, these options for foster competition regarding benefits, networks, and costs. With respect to a maximum benefit, generally the larger the maximum benefit, the higher the premium. However, there are a variety of exceptions. Consider the two dental plans below. You’ll notice our plan comparisons include a column labeled “Plan Maximum” which lists a plan’s maximum benefit.
You’ll notice that the first plan has a slightly lower monthly premium than the second but, despite the lower premium, the first plan has a maximum benefit that is $250 higher annually.
The example below is even more striking. The first plan has a premium quote 14 percent less expensive than the premium of the second plan but its maximum benefit is $1,000 more generous each year.
The lesson from these examples is that it pays to comparison shop.
When evaluating the maximum benefits of dental plans, also dig into the Plan Details. As mentioned earlier, some plans have multiple maximum benefits. For example, a plan may have a $2,000 maximum benefit for preventive and basic dental care but a $1,500 maximum major care. Get into a thorough review of a plan’s benefits to see if there are any waiting periods on dental service coverage or a reduced maximum benefit for major services.
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How to Find Dental Plans with High Maximum Benefits
There are two easy ways to find a dental plan with a high maximum. The first is to go to our dental insurance quote page and see what plans are available in your local area. As mentioned earlier in this article, our plan comparisons have a column labeled “Plan Maximum” that lists an insurance product’s maximum benefit.
Examples of Dental Plans with High Maximum Benefits
To make your shopping easier, DentalInsurance.com has compiled a brief list of dental plans with very high maximum benefits. While many dental plans have maximum benefits below $2,000 annually, the plans below have limits significantly more generous to their enrollees. Please review an individual product’s plan details for additional information.
Waiting Periods Before Some Dental Services Covered?
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