Dental Insurance FAQ.

Or: Hope for the best, prepare for the worst...

Dental insurance has become commonplace--almost as ubiquitous as major medical health coverage. While it is undeniably an asset when received as a benefit of employment, it is at the same time the product of a not-so-disinterested third party intent on maximizing its bottom line more for the benefit of its shareholders than its policyholders.

...and this is a good thing?

Q: I'm again searching for a dentist. My Blue Cross PPO plan covers what they refer to as "reasonable and customary" basic charges. This seems to be exactly what I need -- basic services with basic rates. However, it seems absolutely NOBODY practicing general dentistry charges "reasonable and customary" rates!! EVERYBODY wants 50% to 150% more! Of course the patient pays the difference out of his own pocket.

I've always selected very "regular" dentists who have modest offices, small staff, low volume, and what seems like NOT the latest and most expensive equipment. However, every single dentist thinks he/she is the BEST (how can I argue?) and deserves the hefty rates that they bill out.

What can I do? BlueCross's web site does not list them by their rates.

I've been wasting literally THOUSANDS of dollars for the same basic services at many modest dental offices over several years. How can I find a dental office that has reasonable and customary rates? OR am I out of luck and "reasonable and customary" rates are absurdly underestimated? What gives?

A: Ahh, reasonable and customary! This is a term coined by the insurance industry; it means little to policyholders, and less to members of the health care provider industry. It implies that it represents some statistical average of the going rate for a given service at a given locale at a given time. Of course, depending on when the statistics are gathered, that time may be during the Great Depression. In my state of New York, Empire Blue Cross Blue Shield (which has just changed its name to Empire HealthChoice) does not divulge its list of customary and reasonable fees, in the hope that that by not making public this confidential information, health care providers won't be tempted to raise their fees to take advantage of Blue Cross' largesse. ;-)

We happen to participate in the Empire HealthChoice PPO, so we know something about the plan (if you are insured by another regional Blue, this may not apply). Participating PPO providers sign a contract that limits their fee to a predetermined maximum charge that is known by both parties to the contract (dentist and insurer). This fee is the total fee charged; the insurance benefit may be less, subject to yearly deductibles, maximum benefits, and copayments that are stipulated in the provisions of the specific policy. The patient must pay the difference between the insurance benefit and the contracted amount. This fee is independent of the U.C.R. fee structure.

A PPO makes no sense to the insurer or health care provider if the participating provider list is not available to policyholders. The incentive for a provider to join the PPO derives from the expectation of referrals to his office by being included on just such a list. If you call your insurer, I'm sure they will be able to direct you to a participating dentist. Keep in mind, though, that if your insurance only pays 50% of the fee, the fact that you must also pay 50% has nothing to do with the fact that the UCR is not reasonable; it simply means that your contract doesn't pay the entire contracted fee.

On the chance that you do belong to the Empire NY plan, the following is a link to their PPO Dental site: http://www.empireblue.com/

Follow-up question:
No. I have already found the Blue Cross list of participating PPO providers in my area (San Francisco bay) at their web site. PPO providers are not, however, listed further by their rates.

My PPO plan covers 100% of diagnostic and preventive care at participating providers. This is just what I need. The deductible is $50 a year, which I'm willing to pay on top of my monthly dental insurance premiums. The plan covers "basic dental care" at dollar amounts listed as "reasonable and customary." This seems exactly what I need. I've had the need to see a dentist about once or twice a year -- like to replace a filling, nothing fancy. So it seems all I need is very basic care.

However, I'm currently facing a $120 bill for "excess" charges after having one filling replaced. It was from my one and only "basic dental care" in all of last year! I thought I was saving money by having only one old filling replaced. Now I'm feeling victimized again, this time for my prudent visitations.

It seems "reasonable and customary" is ridiculous. The whole insurance thing seems like a scam. All dentists seem like they're only out to gouge you.

Should I simply cancel my dental plan and shop by price on the phone for every dental checkup? And I may need a filling. Should I simply shop for price for the filling only when I need it? But the dental office I choose would treat me like crap. I would be afraid. The dentist may do a "lousy" job on me because I'm in there only for price.

A: If we understand you correctly, there is no specified PPO fee for services, and benefits are paid at some per cent copayment rate of UCR after a $50 deductible for basic services, and 100% of UCR for preventive (correct us if we're wrong). This is different from the NY plan, where the PPO fee is an explicit fee schedule, and benefits are paid as some per cent rate after deductibles.

If you are receiving your dental insurance as a benefit of employment, there's no reason to drop your dental insurance, unless you will recover the insurance premium in a wage increase. It is seldom logical to pay for one's own dental insurance, as you end up paying both the dentist and the middle man (i.e., the insurance carrier). Insurance companies hire actuaries to assure that they pay out in benefits less than they take in in premiums. To our minds, dental insurance is a perversion of the original intent of insurance: to spread the risk of an unexpected catastrophic loss among many subscribers. Dental fees, no matter how high, are seldom catastrophic when compared with those of other segments of health care, nor are they unexpected.

Dentistry is a business like any other; the fees will vary according to the laws of supply and demand. Dentists are (in general) not "gouging"; you certainly should not come to that conclusion just because the insurance company is unwilling to pay a reasonable benefit. Dentists are not going to price themselves out of the market; they will charge what most patients are willing to pay. It is unfortunate you don't perceive the value of dentistry justifies the cost.

It is inappropriate to jump from any health care provider to another; you lose too much continuity of care. A physician or dentist is much better able to diagnose and treat based on a history over time, rather than learning about you every time you visit. The new dentist will not treat you like "crap," since he wants you to become a patient of record.

Q: I am over 40 and have relatively healthy teeth, having had no root canal and only one crown. However, I foresee the probable need for interventions in the future as I have major fillings and receding gums.

Under my company insurance plan, I have two options: a DMO and a PDO. With the former, I would pay a nominal monthly fee, get unlimited coverage, no deductible, and all interventions covered either in full or at a high percentage--but I would be limited to choosing dentists who belong to that particular insurance network. With the latter, the monthly fee would be somewhat higher, there would be a deductible, the percentage of coverage would be somewhat lower, and--most importantly--it would be limited to a maximum of $2,000 per year--but I could choose any dentist I want.

It happens that I have already selected dentists (general and specialists) who do not belong to that insurance network and do not have any dental plans of their own. I will not go back on that selection (visits to some of the dentists who belong to the network have not induced me to switch to their practice). So I have two options:

  1. I can opt for the DMO and use it only as an insurance against a catastrophic situation (e.g. an accident) requiring huge dental fees and in such a case go to the network dentists. For all other dental work, from check-ups to crowns, I would go to the dentists I have already selected and pay out-of-pocket. Advantage: except under extraordinary circumstances, I would only deal with dentists whom I trust. Disadvantage: except under the same extraordinary circumstances, it would be as if I had no insurance coverage at all.
  2. I can opt for the PDO. Advantage: I would have insurance coverage while seeing the very dentists I have selected. Disadvantage: In case of exceptional circumstances requiring huge dental fees (i.e. more than $2,000/year), I would not be covered beyond that maximum.

Only I can make the decision between these two options, and I am inclined to favor the first one. However, I would be interested in any comments or observations. Have I forgotten some important consideration? Is it wise, in your opinion, to forego insurance for SURE needs in exchange for insurance for UNLIKELY needs, as is the case with option 1?

A: First, we would like to make known the fact that we believe that the intent of dental insurance is a different from that of most other types of insurance, in which the underwriting company assumes a small risk of catastrophic loss in return for a fee (premium). If you think $2000 in annual health care costs is catastrophic, you have been quite lucky. Catastrophic loss is usually not encountered in dentistry; it certainly is a risk in medicine. Medical insurance is protection against catastrophic but unexpected loss; dental insurance usually insures against small, expected loss. Since dental insurance carriers must demonstrate to their shareholders that they can turn a profit, they hire actuaries to ensure that they take in premiums in excess of what they pay out in benefits. In effect, dental insurance inserts a middle man between the health care provider and the patient; this middle man will take his cut. The net effect is to increase the cost of health care delivery.

Although it seldom makes sense to purchase dental insurance as an individual for the above reason, you are receiving insurance as a benefit from your employer. As such, you must analyze what you give up in return for this benefit. In the DMO option, you give up freedom of choice of healthcare provider (dentist); you give up nothing with the PPO.

You should keep in mind that although insurance companies imply to their policyholders that they are working in their interests, they are mostly working in their own interests. They are an adversary of you and your dentist. As such, it is in their interest to withhold relevant information regarding the specifics of the claims process. This may include circumstances where certain types of treatment may be denied coverage (will not be reimbursible) for any of a number of reasons that are written into the small print of the policy. As such, the DMO plan may not truly be "unlimited". If your DMO plan is written as a "capitation" plan rather than an "indemnity" (fee for service) plan, there will be explicit and subtle ways in which the dentist will be guided into choosing less expensive alternatives of treatment, regardless of the health consequences. This can in no way be considered a bargain.

Freedom of choice has an intangible value that, to my mind, cannot be compensated for by the meager difference in monetary benefits you may realize in the DMO plan. Your current dentist(s) have a history and knowledge of your health over time which gives them an advantage diagnostically over any new dentist to whom you may switch. Your strategy--to use your DMO plan only for catastrophic loss-- IS in keeping with my concept of insurance for just such a rare occurrence. However, your plan will also remove your ability to choose just when that ability may be most important.

We vote for the PPO...

Q: Does anybody know what is the highest money saving Dental Insurance? Or any other insurance to recommend from personal experience..?

A: Insurance is a profit-making business; the insurance companies do a claims utilization analysis to determine how much they must charge in premiums in order to make a profit. In other words, on average, the typical person paying for their own dental insurance will pay more in combined dental fees and dental insurance premiums than if he eliminates the middle man (who gets his cut) and pays dental fees directly.

It generally does not make sense for an individual to pay for his own dental insurance unless he is the insurance administrator or executive of a company that is looking for a group contract for his or her company. If you can't get someone to pay for your dental insurance (usually your employer as an employee benefit) it seldom is a money-saving tactic to pay for it yourself. If you do get it as an employee benefit, you seldom have much of a choice of policies; dental coverage is increasingly being considered an extravagance by employers--consider yourself lucky if you are offered any dental insurance!

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