Dental insurance is no different from most specialty forms of insurance – you don't think much about it until you need it.
Dental insurance can sometimes be purchased with a packaged health plan, but it is more often bought as a stand-alone package. It is available with insurers directly, or through the exchanges created by the Affordable Care Act (ACA), even though the ACA barely addressed dental insurance. Children's dental coverage is considered an "essential benefit" that a qualified healthcare plan must cover, but oddly enough, you are not required to purchase it for your kids.
Discussing the pros and cons are easier to do in the context of the type of dental insurance you get, and whether it is group or individual coverage.
There are three types of dental insurance available, as well as non-insurance dental discount plans.
- Dental HMO (Health Maintenance Organization) – As with health plans, HMOs restrict you to a specific provider network. As a tradeoff for limited choice, you usually have lesser waiting periods for coverage, fewer benefit limitations, and fixed payment amounts.
- Dental PPO (Preferred Provider Organization) – Not as strict as a HMO on choice, but with higher fees for out-of-network services. Waiting periods can be long – this is to prevent people from buying coverage for known impending work like a root canal and dropping coverage immediately thereafter.
- Dental Indemnity –More of a traditional fee-for-service with partial reimbursement. There are no restrictions on dentists, but they often have a higher policy cost, more exclusions, or lower percentage of reimbursement.
- Discount Dental Plan – Not insurance at all, but a monthly or annual fee you pay in exchange for discounted services throughout the year. The plan offers a network of dentists – similar to a PPO – who agree to treat you for preset discounts of 20% to 50% on a wide range of dental services, including oral surgeries and orthodontics. The typical cost for such a plan is $100 to $175 per year per family. Unlike dental insurance, you pay for your own checkups, x-rays and cleanings, but at significantly discounted rates.
Coverage is typically tiered based on the type of procedure required. A common policy is a 100-80-50, covering 100% of routine preventative visits like cleanings and checkups, 80% for simpler procedures like fillings and root canals, and 50% for crowns, bridges and more complex work.
Cosmetic dentistry is rarely, if ever, covered. Orthodontia is usually covered under the most expensive plans and only for children. Most dental insurance policies cap annual payouts on services provided to you, so check this cap carefully before you select a policy.
Group plans can negotiate plans with lower costs than individual plans, but all negotiations come with tradeoffs. To truly assess pros and cons, you have to look in detail at the exclusions, deductibles, percentage of a claim paid, yearly numerical limits (like the number of cleanings or fillings covered per year) and lifetime maximums for certain items such as orthodontia. Employer-sponsored benefits should be run through the same cost analysis, regardless of the ratio of employer/employee contribution.
Check for deals with your current dentist. They may have suggestions or be affiliated with particular insurance plans.
So is dental insurance worth it? Aside from peace of mind, it is arguable. A 2009 study by the Robert Wood Johnson Foundation found insurance to be almost a draw – with estimated premium costs factored in, the average household spent $978 on dental care if they had insurance and $1,007 without insurance. However, those with unusually high dental expenses were generally saved from financial hardship by dental insurance. If you need it, you really need it.
If you have some reason for high risk – for example, you are a weekend hockey player – you may want to consider dental insurance. Another reason would be expected orthodontia bills for your children. Aside from that, dental insurance is probably a peace-of-mind purchase more than an economic one. If it helps you to sleep at night, go for it. And, try not to grind your teeth while you’re sleeping!