This is probably the most common question that my office manager is asked in a day’s time. Although many people have some form of third-party assistance with their dental expenses, there is a false understanding that dental benefits are truly an “insurance,” which typically is a safety net for unpredictable expenses. For example, you carry fire, wind, and theft insurance on your home just for the unlikely event that your home would be damaged in a storm, burglary, or fire. Insurance companies bet that you will never need it, and you bet that you will. Fortunately, the insurance company often wins the bet. Dental insurance is an entirely different animal because you will most likely use your benefits every year. Dental insurance companies know this and do everything they can in the form of contracts, preferred doctor lists, incentives to employers, claim delays and denials, pre-approval requirements for care, etc., to avoid paying out your benefits so that they can turn a profit on your employer’s dime. Essentially, there are three types of dental insurance: Managed Care, Indemnity, and Direct Reimbursement. Since every employer’s individual plan is based on a different contract with a different insurance company, all we can usually give for an honest answer is, “The good plans cover it, and the bad ones don’t.“
Managed Care dental plans restrict the level of care and frequency of treatment, attempt to contain the costs of dental care by controlling the level of reimbursement for care, and ultimately limit access to dental care. Often, these plans stipulate that employers must direct their employees to seek care from a specific list of providers in order for their benefits to apply. Care quality may be compromised in this situation because these particular dentists have agreed to charge lower fees for patients on these plans in exchange for gaining a larger patient pool. Often, to avoid losing money, they choose to purchase less expensive (and possibly lower quality) materials and supplies than their fee-for-service colleagues. A more favorable situation exists when dental plans have “point-of-service” clauses, which allow patients in managed care plans to seek “out-of-network” care from dentists of their own choice. However, reimbursement benefits are usually lower than what they would be for a “preferred provider” dentist.
An indemnity plan is a plan that pays a certain amount for a dental procedure, regardless of the dentist’s fee. Often the words “usual, customary, and reasonable” are used to describe what the insurance company is willing to pay for each covered service. In fact, this terminology is very rarely correct because every insurance company figures these benefits based on a pool of negotiated fees with “preferred provider” dentists who have already agreed to reduced fees and then takes a percentage of that average to label as the “UCR” benefit. In indemnity plans, the patient is responsible for paying the amount for dental services rendered that is not covered or is “above UCR.” In no way should this decision by an insurance company be interpreted as meaning that the dentist is charging an unfair fee for a particular service because there are many variables involved in fee determination that are unique to each practice. In fact, there have been some very large lawsuits filed by the American Dental Association against some major insurance companies for this insinuation.
Finally, there is a third type of dental insurance that is growing in popularity because it clearly provides freedom of choice and increases access to dental care…direct reimbursement. These plans are set up similarly to traditional indemnity plans except that no third party establishes criteria for what services will be covered. They simply reimburse for treatment that you and your dentist agree upon, based on a determined percentage as established by your employer (e.g., 100% of the first $500 and 70% of the next $500 during a calendar year, etc.). Again, you as the patient would be responsible for the balance of the count above the benefit reimbursement. Direct reimbursement provides dental benefits that truly encourage optimal dental health.
Since dental disease is a frequent reason for poor work performance or employee absence, dental benefits are extremely important. However, there are many very bad plans out there that really are not a benefit at all. If you are unhappy with your dental benefit package, the best person to talk to is your employer or human resource person. The American Dental Association offers free dental plan analyses to employers and can be contacted at (312) 440-2746.