Dental Insurance-Part 1: A Good Idea?

Dental Insurance has been a good and a bad thing for Dentistry in my opinion. Over the past 15 years, the insurance industry has grown to cover many Americans with dental insurance. This is usually provided through their employers. It does provide some benefit in certain circumstances. Is it a good idea? The comparison should be made to the way it used to be before the large degree of coverage available today. Insurance has traditionally been useful to cover catastrophic unexpected expenses due to things like severe medical conditions, disability, death, fire, tornado damage, etc. Companies are paid a premium per month for the promise of a certain amount of financial coverage if these disasters occur. Good health insurance is a must, and fire coverage for your house is a requirement for your mortgage. It protects you against an unforseen event that could wipe you out financially. Insurance has generally not been used for everyday expenses such as gasoline, groceries, and other non catastrophic expenses. Dentistry is a disease process and is certainly a significant medical condition. It is , however, predictable, and with the exception of cancer and severe trauma (which would be covered under medical insurance anyways), non-catastrophic. In general, why is this a flawed system?

Why would you purchase dental insurance? "I don't, my employer does". Well, you are paying for it, but usually indirectly. Your employer pays the premiums and deducts the cost in the form of a lower salary that you would otherwise receive. The decisions are made by the employer in response to the perceived demand from employees. Coverage is often an "add on" to health insurance. Dental insurance can provide someone who has extensive dental treatment needs with the financial confidence to proceed with treatment when otherwise they could not "afford" it. They would rather have the insurance in lieu of salary. This has benefited many people over time. The insurance, however, becomes the middleman. Sometimes, when a patient has proposed treatment, the response isn't "when can I schedule that", it's "let me see if my insurance covers that". I guess I don't blame them, it's just way different than before.

If I told you I was selling gasoline insurance, would you buy it? I will ask for premium payment every month. In exchange, you send me your receipts from the gas station. I will then send you a check for these "claims" you have made. Would you buy that? I would advise you to say no to this deal. Why? With the money you are paying every month you could just pay for the gas anyways. Your gasoline purchases are predictable and non-catastrophic. Lets say you do take the deal because you are fearful the cost of gasoline is going up. Let's say the price does go up. Guess what, the insuranace company is now going to raise your premiums, and they are now raising the deductable. Then, and this is important, they are going to pay 80% after that. You then read the new fine print. 80% of what? You thought it was 80% of the bill. Well now it's 80% of a predetermined amount which is less than you actually paid. Who sets this new amount? The insurance company.

So, here we are:

You paid $200 for gas last month
You sent in your claim to the insurance co.
They took the $200 and arbitrarily reduced that to $175
They then reduced that amount by your $75 deductable, so it's now $100
They then pay 80% of the $100

You get a check for $80 to help pay your $200 bill.

Oh, then the next day you receive your monthly premium notice for $100.

Is that a good deal?
I know this is exagerated, but you see the point. By the way, be reminded if your employer "pays the premium", just remember that check went to the insurance company instead of your salary.

Dentistry, more specifically dental costs are more predictable and less expensive than medical emergencies. After looking at the real costs of dentistry and the actual premiums, deductables, etc. My determination is that, for most people, it is not worth it. If your company provides the insurance, well of course use it, but understand what it actually covers. It is only really worth it however, if you know you have lots of dentistry that is going to be required over a specific period of time, like massive crowns, bridges, surgeries, etc. It may be worth it until you were stabilized into routine care. So, unless you fall into that catagory, save your money and use that to pay the dentist instead of the insurance company. I'll have more posts on dental insurance and dentistry in the near future.

Dental Insurance-Part 2: How it Really Works

ADA Site: Dental Insurance FAQ