Is Dental Insurance A Scam?
Is Dental Insurance A Scam, A Fraud?
Do you need dental insurance? Is Dental Insurance a scam, a fraud? I work with dental insurance every day, reading policies, explaining benefits, fielding complaints from people who can't understand why their claims were denied, or why insurance doesn't cover 100% of their bills. Some people get really mad, and call me an idiot because I won't tell them what they want to hear. Often, they tell me they think dental insurance is a scam, and I advise them how to cancel their policies. Sometimes they find real examples of fraud and I also advise them of what to do about that.
A frequent complaint is: "Why am I spending $xx.xx every month if I won't get paid back?" Exactly. Why ARE you spending that money? And, why is the insurance company selling you a policy in the first place?
Dental insurance typically covers only $500 to $2000 of your dental costs in any one year, depending on which exact policy you purchased. Any bills over your yearly maximum will never be covered by insurance. And, depending on the type of insurance you bought, some or all of your actual bills may not be covered either.
So, the question, why buy dental insurance. Insurance companies are trying to make money. Everyone would like to get something for nothing, to get paid back more than they pay out. Insurance companies are in the business of making sure that happens to their customers as seldom as possible, and to themselves as often as possible! Insurance companies are in it to make money, and the only way they can do that is if you the consumer pay more in premiums than the company pays back in benefits.
So, for the average person, you will spend more on your policy than you will receive in benefits. Insurance companies couldn't sell the policies if this were not true. They would go bankrupt, the same as any other company that sells at a loss.
Dental policies became popular because companies offer them as part of their benefits packages. Your employer is paying part of the premium, so the plan looks cheaper than it really is. But even with your employer paying part of the premium, many people end up paying more than they ever will get back in benefits. How can you change this equation so you get more than you pay, without fraud or cheating?
Why do you buy insurance? The purpose of insurance is to cover you if some disaster occurs, and you can not afford to pay the immediate bills. If you expect dental insurance to always cover all of your costs, you are bound to be disappointed.
If you do intend to get some of your money back, most dental insurance allows for routine checkups and cleanings twice a year. Check your policy to verify this. If so, you can get a couple hundred dollars worth of services and pay very little, or nothing.
Policies vary widely on the benefits they pay. Some pay only for a small, select group of services, others cover almost any dental procedure you can imagine. READ YOUR POLICY! If it isn't what you thought it would be when you signed up, cancel it quick. You may get a refund of you first premium if you cancel soon enough.
There are lots of details, of course, such as In Network or Out Of Network dentists. In Net means the dentist is under contract not to charge over a certain fee for each service. In Net is usually cheaper. So get your routine work done In Net, and normally you will pay very little or nothing for it. You may also get reduced prices on major work.
Out Of Network dentists' charges are not controlled by the insurance company or the network. The dentist can charge any price he pleases. Some Out Of Network dentists may actually charge less than the network price, and be cheaper for you than In Network. You have to do your homework before going to the dentist. Find out if he is In Net or Out Of Net, and ask him directly how much it will cost before you go. They don't like to tell you, but you are the customer. Be polite, but insist. Would you get a haircut if the prices were not marked?
(Unfortunately, dentists have good reasons for not wanting to quote prices. The best reason is, he doesn't know what he will find until he actually has you say "Ah". It may be routine, or he may need to spend a lot of time and do work he hadn't planned. So don't expect too much, but at least get his fee for the basic exam. If he gives you a treatment plan, then you can ask for specific charges and use those to compare with other dentists.)
There are so many different kinds of plans, and some only offer a discount, not a monetary benefit. Others only pay a small, flat rate. Make sure you double check both your policy, and with your dentist before having service done. Call the customer service number on your card, too. They can usually give you the information you need. Call your network. They can tell you if the dentist is In Network or Out, and may even be able to tell you the prices they guarantee.
For expensive, non-emergency services, have your dentist request a pre-estimate (also called pre-determination or pre-authorization) from the insurance company, so you will know in advance what will be covered, and how much you will have to pay yourself. Don't be taken by surprise!
Now the hardest question. Do you really need dental insurance? Look at the policy. How much will it pay out in a worst-case scenario? Suppose you are in an accident and have severe tooth damage, or you suddenly need root canals and crowns. You still will not receive more than the yearly maximum, which for most plans is from $500 to $2000, depending on your plan. Many plans max out at $1000.
How much are you paying each month? $30? $50? Treat insurance as an investment. Is a total return of $1000 every few years worth what you pay? If you pay $50 a month, times twelve months, that is $600 every year. If you pay $30 a month, it's $360 per year.
Ask yourself if it is worth it for you to pay that much compared to your total return. Consider how many people are on your plan, and how much work they are likely to need each year.
If you have several children, a spouse and yourself, it may very well be a good deal. Do your kids need orthodontic work (braces)? Does your plan even cover orthodontics? Most don't, unless you pay extra premiums, and the benefits for orthodontics usually are not high enough to cover all of the costs. A typical plan might cover only $1000 per child. If you know your kids will need braces, that might be worth the extra premiums. Do the math, before you buy the policy!
Whether to buy insurance or not is a very personal decision, and depends on so many factors that I cannot give strong advise here. But many policies pay out so little, that they are not worth the premium cost and the hassles involved. And there can be lots of hassles.
If you are able to save enough money to cover an emergency without borrowing, it might be wiser to do so rather than buy insurance. But if you know you or your dependents will be needing extensive care, it might be worth your money.
As with any medical insurance, watch out for pre-existing conditions, such as a missing tooth, they usually are not covered. And, many policies have waiting periods before they offer major services such as crowns or root canals. You may pay premiums for many months before receiving more than basic care, exams and cleanings.
Dental insurance isn't a scam. For some people it works very well, and provides peace of mind. It works best for people with large families, or who know in advance they will be needing expensive dental care. But remember, if you don't take advantage of the free or low cost cleanings and check-ups, you will probably spend more money on it than you will ever get back.
Use your calculator before you buy! Buyer beware. The insurance companies are counting on you to pay more than you get back. What dollar value do you put on peace of mind?
If you have questions, put them in the comment box below and I will try to answer. If I don't know the answer, I'll tell you that directly.