If your teeth need plenty of work, a dental insurance plan with the highest annual maximum benefit might seem like the best choice – at least on the surface. Insurance plans traditionally protect members from unexpected, extraordinarily high expenses.
Most dental plans work in the opposite fashion. They cover routine work but cap what they pay in any calendar year. A dental plan with the highest annual maximum benefit either costs much more, or takes away something of value.
Since most consumers focus primarily on premium costs, the carriers remove other valuable features in order to make the numbers work. Look under the hood of these plans, and consider the alternatives before making a purchase.
Dental Plans with No Annual Maximum Coverage
Dental insurance plans do exist with no annual maximum coverage limits. You cannot find anything higher than unlimited. If your dentist is recommending a significant treatment protocol, this may sound appealing – until you discover the caveats.
The carriers are in business to make money. They want to offer plans with affordable premiums that exceed what they must pay in claims. How do they do it? They limit networks or introduce disincentives such as copayments.
A Dental Maintenance Organization (DMO) is an example of a limited network plan. The good news with this plan type is that many have no annual maximum coverage. If you need the work done, the plan will cover the procedure, no matter how much work your dentist performs.
Of course, the downside of a DMO is the limited network. Your dentist may not participate in the plan, and you may need to travel long distances to find one who does.
The carrier makes the numbers work by forcing volume to a small number of providers, who agree to treat all patients for a fixed monthly fee. The dentist takes the risks, not the carrier. If the practice attracts too many patients needing extensive work, they lose. Good luck getting an appointment; the office could be quite busy.
Dental insurance with very large co-payments is another way carriers can offer plans with no annual maximum coverage. In this model, the carrier and the patient cost share. Each pays a portion of the bill.
The carrier makes the numbers work by introducing a disincentive – the large copayment. A member needing extensive work will quickly see expenses rise. Many members do not have the financial resources to cover these out-of-pocket expenses. Some may need to finance the extra work.
You can get a plan with no annual maximum coverage amount, but be prepared to reach into your pocket for the premium and the co-payments.
Dental Plans with High Yearly Maximum Benefits
You may want a dental insurance plan with a high yearly maximum benefit, but do not want a limited network or large copayments. Is a plan with a lower cap better than one with no limit at all, if your dentist participates, and you cost-share is more reasonable?
This may indeed be the case when you factor in cost containment and combine two plans together using supplemental insurance.
Do not overlook the in-network cost containment of a dental insurance plan with a yearly maximum. If your dentist participates in one of these plans, the practice agrees to charge patients according to a set fee schedule.
This in-network schedule reflects the bulk bargaining power of the carrier. The carrier reimburses the provider using these pre-negotiated wholesale rates. A single uninsured or the out-of-network patient might pay a much higher retail rate. The difference between the two rates is often shockingly high.
The practice bills at the wholesale, rather than retail rate once the patient exceeds the yearly maximum benefit. The savings can be substantial.
Supplemental dental insurance plans are a second policy the patient can purchase when they see extra work coming on the horizon. The plans do have waiting periods for many procedures, so this approach does require foresight.
Supplemental plans pay a fixed amount for a specified list of approved ADA procedures. The carrier pays the additional claim either to the patient or the provider, depending upon how the policy owner wants it to work.
Supplemental dental insurance plans do contain calendar year maximums for each individual covered by the policy. You can choose between four levels of coverage, with the total amount of payable benefits ranging from $1,400 to $2,000. While not terribly high, when combined with a traditional plan, a member may significantly increase the amount of yearly coverage.