Dental insurance is just like health insurance, right? You sign up, pay a premium, and the insurance company covers your costs. You’re protected against the unpredictable.
Actually, that’s wrong.
Dental insurance isn’t like health insurance, or any other form of insurance, for that matter. Turns out it’s more like a pre-payment plan, one with limitations and exclusions.
Read on to learn more about how dental insurance works and how discount plans like DentalSave can offer a better deal.
Here’s how insurance usually works: You pay a regular premium to an insurance company to insure your health, your car, your house, etc. In exchange, the insurance company agrees to reimburse you or others for any claims you file.
If you get sick, the insurance company pays your doctor for the cost of your treatment (minus any co-pay or deductible that fall to you). If you get in a car accident or suffer damage to your house, the insurance company pays for any repairs beyond your deductible.
The company bets that it will collect more in premiums than it pays out in claims. You get the security of knowing that should something bad happen, you won’t be on the hook for huge, unforeseen expenses.
Dental insurance is different, mostly because dental insurance plans usually put a relatively low limit on the annual claims they’ll pay out.
You still pay a regular premium, and your insurance company still pays the cost of your care. However, most dental insurance plans cap your claims at $1,000-2,000 in any given year. Anything beyond that falls to you.
Compare this other kinds of insurance. Health insurance benefit caps are much, much higher, while insurance on homes and cars typically covers their full value.
Relatively low benefit caps aren’t a problem for many dental-insurance buyers, as few hit their annual maximums. But they make dental insurance look more like a pre-payment plan than traditional insurance.
You put away a little bit of money every month in the form of a premium, but if you need extensive dental care, you may end up paying for most of it out of your own pocket. On the flipside, if you don’t need much dental care at all, you’re probably not getting back what you pay in premiums.
This is why more and more people are looking at dental discount plans as an alternative or complement to traditional insurance.
Dental discount plans operate on a totally different model. They negotiate with dentists to get discounted fees for plan members, who pay annual or monthly fees to join.
With DentalSave, you pay $99 a year for an individual membership. Participating dentists discount their fees 20-50 percent from what they charge non-member patients. You get the same care, but at a steep savings.
For example, standard fees for a periodic exam, x-rays, and adult cleaning average a total of $282. A DentalSave member might pay $155, a savings of $127—more than the cost of an individual DentalSave membership.