Let's Talk About Dental Insurance

by Tim Nichols

I’d like to start with our friend Mr. Webster.  No, not our own well-known local Ed Webster world famous author, lecturer and Mt. Everest climber. I am talking about Mr. Webster who wrote down every word in the English language and then clarified each word with other words!

Definition of insurance

1. the business of insuring persons or property

a.       coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril

b.      the sum for which something is insured

1. a means of guaranteeing protection or safety.  The contract is your insurance against price changes. Frequent hand washing is good insurance against the common cold.

1. gambling :  a side bet that a player in blackjack may place when the dealer's first face up card is an ace. Note: An insurance bet can be up to half of a player's original bet. It wins at 2 to 1 odds if the dealer's cards add up to 21.

Until I looked up “insurance“ in the dictionary  I never knew about insurance for gambling.  I am not a betting person, but, if I were, I’d buy something that would keep me from gambling, and that if I did gamble, would pay my losses. That would be great insurance!  Dental insurance will not help you if you gamble by not taking care of your teeth, and if you lose all of your teeth, no insurance will put them back.

Before I married a dentist, my first experiences with dental insurance were probably a lot like yours. After my dental appointment the receptionist would tell me that I owed money. My reply was, “But I have dental insurance.”  Then I gave the poor woman a blank stare, expecting her to appreciate that I couldn’t possibly owe the dentist money if I had dental insurance!  She would then explain to me that dental insurance does not pay 100% of most procedure fees.  After I put her through this process three or four times I think she felt like she knew me.  Perhaps I have not mentioned that I’m an accountant.  Yes, I could understand that I had a great dentist and that he deserved to be paid.... But, I HAD DENTAL INSURANCE!

We typically think of insurance as a combination of Webster’s definitions 1 and 2.  We want our dental insurance to be a contract whereby the insurance company agrees to pay for ALL our dental needs in exchange for our monthly premium payment of $43.64.[1]  The reality is quite different.

It has been many years now since my dentist’s receptionist tried to explain to me why my dental insurance did not pay 100% of the fees charged by the office.  Since that time, I have negotiated health and dental insurance contracts for large organizations and have married a dentist. Both the insurance negotiations and the marriage have taught me many things.  One thing I have learned from my experience is that insurance companies are in the business to make a profit. Their expertise is in how to make 6 cents out of 5 cents.  One of the ways they make a buck is by betting on human nature.

It is human nature to be too busy or frightened to bother with the dentist until pain propels us into a dental office.  Another thing the insurance companies count on is that if you have to PAY to see the dentist, you might not buck up until motivated by pain.   So, the insurance industry bets on the fact that many people who pay for dental insurance will not take advantage of the benefits which are provided because of busyness, indifference, or fear of dentistry.

The insurance industry wants you to have some financial as well as literal skin (or gums) in the game. Typically, the only dental care that is covered at a 100% is preventive.  “Preventive” refers to anything designed to prevent other treatment from being needed. Sealants, fluoride, cleaning, exams and x-rays are typically considered preventive. Sounds good, right? But there are obstacles even to benefiting from your policy when it comes to preventive care. These obstacles are called “frequency limitations.” Now I understand that insurance companies need to be sure that you are not going to your dentist for DAILY oral care, but these frequency limitations can be complex. For example: if you have your teeth cleaned today, your next cleaning visit must be scheduled exactly 180.5 days or more from today!  If it isn’t, you’ll be paying for the services because the insurance will not pay. And to make this more difficult, not all insurance policies operate with the same frequency limitations or even calculate them the same way.

Dental insurance companies bet that you will not make your two annual hygiene visits for one reason or another.  They are also betting that you will not have the treatment done when your dentist recommends it.  They know the decay will probably not cause pain until it reaches the nerve.  “No pain no filling needed.”    Pretty safe bets so far for the insurance company.   Next the insurance company is betting that you will have the tooth removed when the decay finally reaches the nerve.  Insurance can make this bet for the following reasons:   When you are in pain and you finally get to meet with your dentist, you will hear the dreaded phrase, “this tooth needs a ROOT CANAL!”  The insurance companies know the fear that is associated with the term root canal and are betting the policy holder will ask for the tooth to be removed and not treated.

Now we will talk about the insurance company’s bet regarding your desire to spend money.  When the dentist tells you that the root canal will cost $1200 and that after the root canal the tooth will need to be crowned and the crown will cost another $1200. You are thinking “That’s not so bad because I have insurance and I will not have to pay.”  You are just thinking about the experience: weighing out the options- which will be worse? the tooth being removed or the root canal?  Then you get to the front desk and you hear those other dreaded words, “your portion will be $240 (typically an 80% benefit) for the root canal and $600 (typically a 50% benefit) for the crown.”

Now the insurance company has you.  Not only will you have to have a root canal and crown but you will have to pay for them BOTH!  The insurance industry bets that you will opt for the tooth to be removed because either you haven’t saved the money for an event like this or because you would rather have a new 70” flat panel in the living room.

By the way, my wife just removed a tooth Sunday which had a root canal done two years ago but was never crowned.  There was a crack in the tooth from the chewing surface all the way to the root tip.  The patient had been in pain for the last month and finally got up the nerve to call the dentist.  Please have your root canals crowned.  The dentist recommends this because they really want you to keep your teeth.  This person’s tooth might well have given a lifetime of service if it had been crowned.

There is only one reason to envy sharks- they come with replacement teeth.  Dental implants are a great help, but again, the insurance industry bets that you will not choose to invest time and co-payments in the implant option either.  Some insurance plans still don’t have an implant benefit. So, you may have to pay 100% for the implant and 50% or more for the crown which will go on the implant abutment.  

Below are some insurance terms and related comments meant to help you understand the terms of your dental policy.

Annual Maximum:  the maximum dollars that your plan will pay over the course of the plan year. 

As noted above, there are multiple stipulations about how you benefit from the Annual Maximum.  The plan does not simply pay your bills up to the maximum benefit.  There are different % of benefits for different types of services.

When dental insurance debuted in the 1960s, Annual Maximums were generous - $1000 dollars/year was typical.  Almost sixty years later Annual Maximums are virtually unchanged. Dental benefits have not kept up with the cost of dental care. 

Key take away: Sit with your insurance provider and learn all about your dental benefit and what your options are so that you can truly get the most out of your plan. Your provider could be the Human Resources person at your company or it could be your insurance broker if you are covered under an individual plan.  Another important resource for maximizing your benefits is the financial coordinator at your dentist’s office.  You will save money, time and frustration if you invest the time and listen to these individuals.

UCR (Usual, Customary and Reasonable) Charges are the maximum amounts that will be covered by the plan for eligible services.  The plan pays the established percentage of the dentist’s fee or pays the plan sponsor’s UCR, whichever is less. 

There are no regulations as to how insurance companies determine reimbursement levels, resulting in wide fluctuation. In addition, insurance companies are not required to disclose how they arrive at UCR fees.

Although these limits are called “customary,” they may or may not reflect the fees that are charged by dentists in your area.  If your dentist’s fees exceed the UCR, it does not mean that your dentist is overcharging for the procedure.  Please note as well that UCR does not take anything about your dentist’s particular office into account.  If a dental office includes a facial and message prior to treatment, then the fees at this office are likely to be higher than an office that does not include these services.

Preferred Providers are dentists who have agreed to the insurance company’s UCR fee schedule. 

If you pay premiums to belong to a PPO plan, you can obtain a list of preferred providers for the plan.  The insured person is not required to see a preferred provider, and the plan will still pay an out of network dentist. However, any difference between your plan’s UCR and your dentist’s fee will be your responsibility if your dentist is not a Preferred Provider.  Depending on your needs and your dental office’s fees, this may or may not be a significant difference to you. 

Key take away: if you find that your dentist is not a preferred provider but you still want to be part of his or her practice, don’t panic and find a new dentist.  Call your dentist’s office and speak with the financial coordinator about what the cost difference is for you.  Then you can make a thoughtful decision about your dental health care.

Whether or not you have insurance, plan your dental treatment with the help of your dental office’s financial coordinator.  Most treatment can be accomplished in stages that can be arranged to best fit your time and your budget.  There are some treatments which, even after the best planning, may still require a significant financial investment.  For these situations, financing options such as Care Credit are available in many dental offices. Additionally, some offices offer cash pay discounts and or membership plans that may provide you significant savings.

In summary, if you are blessed to have dental insurance, take on all the bets made against you and make the most of your benefits.  If you don’t have insurance, minimize your treatment needs by comprehensive prevention at home and at your dental office.  If you already have major needs, sit down with the financial coordinator at your dental office and find the best way to get the care that you need in a way that fits your time and your budget.