Dental Insurance – Part I
“Coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril.” This is one of the definitions found on www.merriam-webster.com for the word “Insurance”. How does this apply to you and your dentist? Let’s break it down:
Almost all the people in our practice that have dental insurance have acquired it through their employer. For some, it is included in what they pay monthly for their medical insurance. For others, it is a separate deduction in their paystub. The next entry will address the question “What do I get for my dental insurance premiums?”
What do you get for your dental insurance premiums? The answer very much depends on the type of insurance you or your employer have purchased, and how the policy is structured.
Your dental insurance premium buys you a certain amount of coverage for one year. This amount is usually referred to as the policy’s annual maximum, and varies by policy. I’ve seen it as low as $500 per year to as high as $3000 per year, but the majority of them are either $1000 or $1500. A dental insurance company will pay out on your claims up to this dollar amount. It’s worth noting that even though the cost of dental care has increased over the years, the annual maximums that dental insurance companies have provided have remained the same since the late 1960’s!
A quick example: let’s say you need a crown. The dentist will charge $1200 for the crown, and your dental insurance will contribute half the amount (50% for a major service). That means afterwards you will have $400 left for the year ($1000 maximum – $600 reimbursement). If you need to have another crown done, then your reimbursement will be for only $400, not $600 like last time. They will contribute nothing to any subsequent crowns.
Maybe your policy has no annual maximum, which would suggest to me that it is based on a schedule of benefits. These policies have a listing of procedures (the schedule) that the dental insurance company will recognize and reimburse. However, the reimbursement amounts are often less than ideal. A very general example would be the crown for $1200 having a scheduled benefit of, say, $300. You could have five of them done, and each time the dental insurance would contribute $300.
In the 1970’s these annual maximums took care of a lot of dental work. The dental insurance plan was designed at that time to be quite generous. As mentioned earlier though, those maximums have not kept up with the economic times. Had they, then dental insurance companies would be offering an annual maximum of $5500 instead of $1000, or $8250 instead of $1500.1