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Is Dental Insurance Worth It? – Affordable Plans, Types & Alternatives

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Parents spend thousands of dollars on orthodontics to ensure their children have what’s arguably the clearest physical indication of prosperity: a straight, white smile. George Washington was certainly prosperous, but he also endured the agony of poorly fitted wooden dentures for much of his life. And James Brown, the Godfather of Soul, claimed that if a man had his hair and teeth, he had it all.

It’s not surprising then that an entire industry is devoted to keeping our teeth healthy, clean, and attractive. Aside from a big boost in self-confidence, the condition of your teeth plays a major role in your overall health. As with many things, many people are willing to pay for those benefits. But is purchasing dental insurance the best way to go about doing it?

Problems With Adult Teeth

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Fortunately, many dental problems can be avoided or delayed with proper attention, such as every mother’s admonition to floss. However, even with regular care, some dental problems do naturally arise with age:

  • Dental Decay. Cavities can deteriorate into root canals and crowns when left untreated.
  • Gum Disease. Plaque causes gums to recede, potentially exposing them to disease. Poor dental hygiene can exacerbate the problem.
  • Accidents. Teeth can be broken or cracked as a result of being hit or simply biting down on an olive pit or cherry stone. This can require removal of the injured teeth in favor of bridges or implants. In extreme cases, dentures may be required.
  • Oral Cancer. Smoking not only stains teeth, it increases your risk of cancer. Gum disease can also trigger oral cancer, along with other health problems.

In addition to good dental hygiene, regular checkups and cleanings are always necessary – and, unfortunately, these cost money. But beyond the pestering costs of basic maintenance lurk far more significant dental operations which have the potential to devastate your personal finances.

Dental Insurance, Savings Plans, or Pay-As-You-Go Plans

FRAM oil filters had a popular advertising campaign in the 1960s where the automobile mechanic told his customer, “You can pay me now or pay me later.” Well, the same is true for dental care. Whether you participate in a dental insurance plan, a dental savings plan, or a pay-as-you-go plan, one thing is certain: Sooner or later, you’re going to pay.

1. Dental Insurance

According to the CDC, approximately three-quarters of people under the age of 65 with private health insurance also have dental insurance, usually at group rates. In some cases, employers subsidize premiums to encourage participation. The typical dental group policy requires a low monthly or annual premium and a deductible for certain services, and it imposes a cap on the amount the insurer pays for treatments.

However, certain services such as implants and orthodontia may not be covered at all through dental insurance. A recent online quote for DeltaCare, sponsored by Delta Dental, features an annual premium of $150 and a variety of different co-pays, including the following:

  • Office visit: $5
  • Exams and x-rays: $0
  • Cleanings: $15
  • Fillings: $26 to $100
  • Root canals: $150 to $270

With few exceptions, dental insurance is provided by publicly traded corporations, which set rates and terms intended to cover their own costs, pay fees to dental providers, and, of course, earn a hefty profit. Despite those factors, purchasing dental insurance does make financial sense in many instances.

Some of its benefits are as follows:

  • Full Coverage Depending on Your Plan. Your out-of-pocket costs for dental treatment can be substantially reduced with insurance. A free annual checkup and cleaning are typical with many plans, and if you’ve taken good care of your teeth, you may only need minor procedures such as cleanings and filling cavities every now and then.
  • Understandable Contract Provisions. The language in dental insurance policies is usually clear and easily understandable.
  • Choice of Dental Network. A dental preferred provider plan (DPO) allows your choice of dentist the majority of the time, while a dental maintenance organization (DHMO) typically requires all services to be performed by a dentist contracted with the network. However, this restricted choice generally comes with lower premiums.

When buying dental insurance, it is important to check the fine print to ensure you’re getting what you want. Be especially alert for the following red flags:

  • High Co-payments. High co-payments can limit the financial benefits of certain services. For example, crowns may have a reimbursement limit significantly below the dentist’s fee. If you anticipate a substantial amount of dental work, insurance may not be your best option.
  • Delay of Coverage. Some insurance companies require a period of lengthy enrollment before you are reimbursed for certain procedures.
  • Omitted Services. Some services may not be covered by dental insurance plans, such as teeth whitening, which is considered cosmetic. Other plans may pay for dental work, but not the necessary anesthesia. These details are often buried in the fine print, so be sure to do your research.

A variety of dental insurance carriers compete in different regions of the United States. For example, in North Texas, 21 different plans are available for a 45-year-old male from companies such as Security Life Insurance, Nationwide, United Health, Delta Dental, Humana, and the IHC Group. There are plenty of options out there, so be sure to shop around and pick the right one for yourself if you decide to go this route.

Dental Insurance Carriers

2. Dental Savings Plans

In exchange for an annual fee, dental discount plans offer members reduced-rate services without many of the encumbrances of dental insurance. Membership fees usually cost 50% to 60% of what dental insurance premiums cost. In many cases, insurance companies offer dental insurance plans and dental savings plans with the same network of providers, and for the same discounts.

However, two advantages of savings plans versus insurance are lower out-of-pocket costs for access to the same network of providers, and a lack of any waiting period before services are covered. For those whose dental care consists of cleanings and preventative services, a dental savings plan may be less costly than insurance. Above that minimum level, the net costs of the two plans should be similar.

Be sure to check if your dentist is in the network of providers. An out-of-network dentist has no contract with the savings plan sponsor and is not obligated to provide a discount. Additionally, unlike some insurance plans, dental savings plans do not impose any waiting period before you’re eligible to access services.

Dental discount plans may not be available to you if you live in a rural area or small town. However, many major insurers such as Cigna, Humana, and Aetna do offer a dental savings plan as an alternative to insurance. Search the website of the National Association of Dental Plans to find and compare dental insurance and savings plan options. Also check out DentalPlans.com to find discount plans.

3. Pay-As-You-Go

Going “naked” – i.e., without insurance – is a common strategy, especially for those without subsidized employer plans. Rather than pay office rates, these individuals negotiate directly with dentists for services, often receiving a higher discount because they pay cash.

This can result in welcome savings, particularly if any portion of your dental bills can be deducted for income tax purposes or paid through a medical savings account. And if you are a young person or a couple without children or significant dental problems, you may find pay-as-you-go a less expensive option than either dental insurance or a discount plan. However, someone with a history of dental problems is likely to incur much more significant expense by going this route.

Dental Tourism

Where significant expense is anticipated, many U.S. citizens are becoming “dental tourists.” According to San Diego Public Radio KPBS, a long-distance truck driver based in North Dakota had major dental work performed in Los Algodones, Mexico, and paid $3,800 for it. Similar treatment in America would have cost $20,000.

The savings were so substantial that he was able to persuade the owner of his company to send all 140 of his truck drivers to Mexico for dental care. In addition to Mexico, Costa Rica and Thailand are popular places for major dental work.

Final Word

Whether you choose dental insurance, a dental savings plan, or to pay as you go, preventive care such as daily flossing and brushing can not only help save your teeth, it can save your money. Before making a decision on the right approach for yourself, consider your dental history, your inclinations when it comes to hygiene, your age, and the likelihood of problems such as losing teeth or filings or needing root canals and crowns. The more extensive the work you’re likely to require, the greater benefit a dental plan can provide.

What kind of dental coverage do you have?

Michael Lewis
Michael R. Lewis is a retired corporate executive and entrepreneur. During his 40+ year career, Lewis created and sold ten different companies ranging from oil exploration to healthcare software. He has also been a Registered Investment Adviser with the SEC, a Principal of one of the larger management consulting firms in the country, and a Senior Vice President of the largest not-for-profit health insurer in the United States. Mike's articles on personal investments, business management, and the economy are available on several online publications. He's a father and grandfather, who also writes non-fiction and biographical pieces about growing up in the plains of West Texas - including The Storm.

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