Dental Plans versus Dental Insurance

Introduction

Few people would argue that having dental insurance in order to protect yourself from life’s surprises is a bad thing. But for many people dental insurance is something that is beyond their reach. This is why dental plans are good to know about. Dental plans can provide you with some of the same benefits as dental insurance without the hassles that are associated with being a policy holder. In general a dental planprovides the individual with a flat discount that he or she may use when visiting the dentist of your choice. Dental insurance gives a wider range of coverage in that some procedures will be paid in full by the insurance company, other procedures may be denied completely and most procedures will have some portion paid by the insurance company and a portion paid by the policy holder. In this article you will be able to read about more of the details of the differences between dental plans and dental insurance so that you can decide for yourself which type of dental coverage is right for you, your family and your situation.

What is a dental plan (or a dental discount plan)?

Dental discount plans are programs in which certain dental providers agree to offer their services at a discount to individuals who agree to pay a fee. Dental plans are considered to be different from insurance plans so it is wise to make note of the specific terms that are used when you are shopping for dental coverage. Dental plans typically provide the customer or plan member with discounts on a variety of dental services, such as fillings, braces, exams and routine cleanings. Plan member discounts are typically 30% to 50% off standard out-of-pocket prices. In many ways having a dental plan is like having a coupon. The member receives their discount and is responsible for paying the balance of their charges directly to the provider. There are two fees commonly associated with obtaining and maintaining a dental plan: an initial enrollment fee and a monthly fee to the dental-discount company.

Dental plan discounts to not always apply to every dental related expense. For example, discounts on cosmetic procedures (such as orthodontia) are excluded from most dental insurance plans. However, you can usually shop around and find a dental plan that will provide a discount for less typical procedures.

What is dental insurance?

Dental insurance is very similar to typical health insurance in that most people are able to obtain the health insurance that they have from their employer. Those who do not have employer sponsored dental benefits, may apply for individual benefits directly through the insurance company. This individual application process can be somewhat complicated in that the one applying for the insurance usually goes through a lengthy paperwork process, review of pre-existing conditions, and a long waiting period. If the application is accepted the policy holder then does the same as the employee who was provided benefits in that a monthly fee is pain in exchange for the dental benefits that were agreed to in the policy agreement. The process works thus: when a procedure is performed, a claim is filed to the insurance provider, and the provider will then send a payment to either the dentist, or the patient (in the case of a direct reimbursement agreement). The patient may have to pay some sort of deductible in addition to their monthly premiums, however they are not typically asked to pay a co-pay at the time of service. Almost every insurance company is different in the percentage or amount of the costs that are covered on each procedure, so it is important to be familiar with your policy agreement to know in advance what amounts you will be personally responsible for.

Differences between dental plans and dental insurance

Typically, an individual will choose a direct plan over a dental insurance plan because the insurance plan was not an available option or will choose dental insurance over a dental plan because the dental plan was not made available to them. If you are in the unique situation where both options are present and you must compare the two choices, below you will find a brief review of the characteristics of both the dental plan and dental insurance as well as a summary of their differences:

• Common characteristics of dental insurance

1. Limitations, deductibles and annual maximums
2. Waiting periods for major dental procedures
3. Limitations/exclusions on pre-existing conditions (long application and approval process)
4. Certain dental specialties such as orthodontic or other “cosmetic” procedures are rarely covered
5. Consumers pay monthly premiums
6. Variable portions of the procedures that are not covered in full (preventative care typically covered completely by insurance company and the portion of other services covered is typically higher than with a dental plan)
7. Very difficult to obtain as an individual, therefore mostly owned by those who have been offered the dental insurance through their employer

• Common characteristics of dental plans

1. No annual limits, members receive discounts on most dental services no matter how many benefits they have received previously
2. Most plans activate within 1 - 3 business days
3. Less paperwork. Typically members just present a card to receive their discount
4. No health restrictions
5. Only select plans include discounts on dental specialty procedures (i.e. cosmetic procedures)
6. Consumers pay membership fees for access to a network of providers offering discounts on most of their dental procedures
7. Available for individuals, families, businesses and groups

• Summary

Dental plans are in reality a lot simpler to understand than are dental insurance plans. Most privileges are states clearly and are easy to understand. In explanation, the dental plan does sound more appealing but speaking strictly monetarily chances are that you will be spending far less over the course of time per procedure if you have dental insurance. But again, what it comes down to is what your specific dental needs are. As you look at dental plans versus dental insurance, make sure weigh the cost vs. benefits, and find out all the restrictions, such as annual maximums and provider networks that you must use.

Dental insurance vs. discount plans: list of terms to know

Common coverage - Under a dental insurance plan, common coverage is a type of coverage that covers such things as minor dental care and basic preventative care. Larger procedures may not be covered under a common coverage policy.

Basic care needs - Basic care dental needs are procedures such as cleanings and yearly x-rays. Most dental insurance policies will cover checkups and cleanings in full, because the insurance company realizes that these procedures may eliminate the need for more expensive procedures in the future, procedures that the insurance company wants to avoid having to pay a portion of.

Dental HMOs - A type of dental plan that provides comprehensive dental coverage but you must use the HMOs defined network of providers. Some dental HMOs will let you use a provider not in the network but at reduced coverage. You pay a fixed monthly premium to be a member.

Dental PPOs - A type of dental plan that has a fixed network of providers who are contracted to provide services at a discount. Members only receive discounts when they see a network provider. You can see an out-of-network provider but you will have a smaller discount per procedure performed.

Indemnity Plan - A type of dental insurance plan that allows you to select your own dentist. These insurance plans are considered fee-for-service and come with limitations and co-payment options. This means that at the patient you pay a flat fee for the dental visit (like a co-pay), but you have an annual limit on how much you are allotted for coverage on dental spending, and specific coverage limits may apply to individual dental procedures.

Dental indemnity plans - Types of dental plan contracts where you can see any dentist you wish (no need to stay with network providers) and providers are reimbursed by the dental plan company on a fee-for-service basis.

Self-Insurance Plan - A type of dental insurance plan where you may or may not have the option to select your own dentist.

Closed Panel Plan - A type of dental insurance plan where you are limited to using a specific group of facilities as in a specific dentists’ office and only the number of dentists available to you in that facility.

Direct Reimbursement Plan - A type of dental insurance plan where employers are allowed to directly reimburse employees for dental services they receive.

Dental Care Service Plan - A type of dental insurance plan where the patient is able to have procedures done by a group of dentists who form a non-profit organization to provide dental services at set fees.

Capitation Plan - A type of dental insurance plan where specific dentists are designated for intervals of treatment. These dentists have a contract indicating that they will be paid a fee regardless of whether dental treatment was required.

Preferred Provider Organization (PPO) - A type of dental insurance plan where coverage is limited to a group of dentists who have made an agreement with the insurance provider to provide dental care at a reduced cost.