If you have been looking for a new dental insurance policy, you may have found dental savings plans mixed in your plan results.
While dental savings plans are not technically insurance policies because plan administrators make no payments to dentists on the behalf of program participants, they are still huge money-saving tools for people looking to save on their dental care. To figure out whether a dental insurance policy or a dental savings program is right for you, it is important to understand what are the most important differences between the two categories of programs. There are multiple types of health insurance plans for individuals to choose from, often both from their employer and their state insurance marketplace.
When looking at available types of dental insurance programs, shoppers can choose from traditional dental indemnity insurance plans and managed dental care plans. Dental insurance plans cover some dental services completely, some at a percentage of the dentist’s normal fee or at a fixed rate and others for high copayments or coinsurance fees. Hundreds of different dental savings plans, also known as dental discount plans (DDPs), are available across the country, each with its own specific network of participating dentists and schedule of discounts. DDPs provide set discounts for specific dental services with an established set of doctors for a monthly or annual premium. Whether dental insurance or a dental savings plan is best for you depends largely on your situations and plan options. Keep reading to learn more about how to choose between a dental insurance plan and a DPP.
Like mentioned above, there are two basic categories of dental insurance policies available on the market today: indemnity plans and managed care plans. Indemnity plans are the more commonly found type of healthcare plan that generally require program enrollees to pay upfront for dental services rendered and then to file a claim for reimbursement for whatever percentage of the cost the insurance provider has agreed to cover. Indemnity dental insurance plans are the favorite of individuals who prioritize choice of dentist over other considerations, as enrollees in this program can usually see whatever dentist they choose. There are not networks of approved dentists with most indemnity insurance programs.
Most dental indemnity insurance plans provide funds to program participants either through direct reimbursement of a schedule of allowances. Indemnity programs with direct reimbursement payment programs provide enrollees with a percentage of dental costs invoiced, in most cases without regard for the dental services rendered or the dentist who performed the services. Dental indemnity insurance policies with a schedule of allowances provide a predetermined reimbursement amount for each dental service, regardless of how much the enrollee had to pay to their chosen dentist upfront. Dental insurance with a schedule of allowances allows some dental services to be received essentially for free with the right doctor, but can be very expensive for individuals who want to visit a more expensive than average dentist.
Dental managed care insurance policies are similar to medical managed healthcare policies in structure and organization. For a monthly or annual premium, managed dental insurance policies generally offer program participants a combination of completely covered and partially covered dental services according to different categorizations of dental work like preventative, basic and major. Most managed care policies have coverage maximums that limit how much dental work a policyholder can have covered on an annual basis. In addition, most dental managed care insurance policies require that new enrollees wait six to twelve months before taking advantage of most dental plan benefits.
The most common types of managed dental care policies are dental health maintenance organizations (DHMOs) and dental preferred provider organizations (DPPOs). DHMOs, like HMOs, allow plan enrollees to choose their primary dentist from a network of preapproved dentists. These in-network dentists have contracts with the insurance provider to offer enrollees dental services at agreed upon rates, mediated through the insurance provider. In most cases, DHMO plan participants pay coinsurance fees or copayments when their dental coverage is used. DPPOs, on the other hand, offer program enrollees a schedule of maximum allowable fees. In this way, when an enrollee sees an in-network dentist, he or she will be asked to pay for either the dentist’s fee or the maximum allowable fee according to the DPPO schedule, whichever is lower for the program participant. Variations on these typical DHMOs and DPPOs are also available by many dental insurance providers.
Dental savings plans are not insurance policies because they do not act as a third-party payment contractor between you and the dentist and they are not governed by the same legal rules. DDPs all offer program participants a set discount on specific dental services with an established network of dentists. Many dental savings plans only cost around $150 a year for annual premiums, while even expensive plans usually max out at $200 annually. Because of how dental savings programs are set up and regulated, it can be relatively difficult to accurately compare the benefits or even the real cost differences from one DPP to another.
While some dental savings program company sales pages will tout huge discounts on “most dental services”, it is extremely important that you look at the fine print of the agreement before paying your first premium to know what you are paying for. Program participants of DPPs always pay their dental service costs upfront, at whatever discounted rate has already been negotiated by the DPP administrator. Program enrollees never have to worry about filing claims or waiting to see how much they will be reimbursed because they are always asked to pay upfront at the time the dental services are rendered. Discount dental programs do not have maximum coverage limits that will cut off their savings after having had a certain number of procedures or saved a certain amount of money.
Different dental procedures are generally categorized differently with DPPs than they are with dental insurance plans, making it easier for savings program participants to receive their discounts on dental work that may be ineligible for coverage under a typical dental insurance plan. In fact, some dental savings programs offer program participants up to 60 percent off dental services that extend beyond preventative cleanings or even basic fillings. Not all dental savings programs are as good of a deal as others, so if there is any specific dental work you hope to get done in the upcoming year, make sure to look specifically at the saving you will receive on those types of dental service. It is also a good idea to look into what dentists are available for use with a dental savings program in your area to be sure that you don’t sign up for a program whose primary network of dentists is located far from your home base.
Ultimately, whether dental insurance or a dental savings plan is best for you depends on what your dental situation is. Because most dental insurance plans provide a relatively low maximum coverage limit, sometimes even under $1,000, it may not be worth it you think you might need any dental work in the near future, especially if your dental plan only covers a small percentage of costs or procedures from the beginning. Even more, many dental insurance plans require that you wait at least six months before receiving covered dental care, a waiting period that can seem excruciatingly long if you are already having problems. Dental plans like these work best for healthy individuals who are looking for maintenance and can take advantage of the free preventative or basic dental care services included with most dental insurance plans. Dental insurance plans may also be the best option for policyholders who are also enrolling their family members. While the savings versus the premium costs may not be very beneficial for just one policyholder, expanding the coverage to your family may offset that difference and make the insurance plan more financially attractive.
Dental savings plans are often more attractive for individuals who expect that they might have to schedule more than preventative dental care appointments in the coming year. DPPs don’t have maximum coverage limits that could cut off your discount after you have saved a certain amount and do not require you to wait any significant amount of time before you begin cashing in on your discounts, so they are great options for people who know that they need a few cavities filled or even more in the next twelve months. If you have an idea of what services you will need, or you go have a free consultation at a nearby dentist to get an idea of what you need, you should compare the cost of that specific service across insurance plans and savings plans. Understanding how dental insurance works can help you make the best financial and health decision for your household.