If you have shopped around for dental insurance recently, you were probably bombarded with different companies offering different types of plans for all different types of coverage. Some of the terms thrown around the world of dental-care coverage are “PPO”, “HMO” and “Dental Plans,” while still others are labeled “Discount Plans.” This can lead to a lot of confusion when it comes to selecting the right plan for you.
When narrowing down the choices for coverage, there are really two major categories that the different plans fall into: dental insurance and dental discount plans. “PPO” and “HMO” are different types of insurance policies, but both fall squarely into the realm of insurance. “Dental Plans” and “Discount Plans” are both terms used to signify discount plans. So really, we just need to sort out the difference between dental insurance and discount plans.
The first question to answer is, “What is dental insurance?” Dental insurance pays a percentage of the dental bill for each procedure performed at the dental office. Often, insurance will offer some services free, such as two free cleanings each year and one free dental x-ray. After that, the patient generally has a co-pay of anywhere from 20% – 80% off the total bill. With insurance, the insurance company will pay part of the bill and then the patient is responsible for the rest of the co-pay. On normal plans, the more expensive the procedure is, the more the co-pay will be. Since insurance companies can’t pay out indefinitely, they put caps on the minimum and maximum amounts they will pay each year. Once a person reaches their yearly maximum on a plan, the patient will be responsible for 100% of the charges beyond that.
Discount plans are similar to insurance in that the patient pays part of the bill for each procedure done. The actual amount of savings can really vary depending on the company they use and the region in which they live. Usually dental discount plans can reduce the costs anywhere from 20% – 60% off the normal fees. The dental discount plans do not actually pay anything to the dental office, so they generally do not have the caps like traditional insurance policies.
Both dental insurance and dental discount plans have strengths and weaknesses. Insurance will be very useful for routine checkups and cleanings–often offering those for free. For standard work done, like tooth fillings and crowns, dental insurance will effectively reduce the out-of-pocket expenses, as long as the patient does not go beyond his/her yearly maximum. The main drawbacks of dental insurance is the cap, the waiting periods (often you will have to wait 6 months to 1 year before you can get work done), and the actual cost of the policies. An individual policy can run anywhere from $30/month to over $100/month!
The strengths of the dental discount plans are a lack of limitations, immediate use and the much lower monthly rates. Dental discount plans usually have no yearly maximums or minimums that must be met. Most dental discount plans can also be set up and used within 3 to 5 business days (and some starting within 15 minutes). Also, the discount plans are much less expensive to get started. Individual plans run as low as $9.95 per month.
Discount dental plans and dental insurance are often very competitive on the actual amount of savings you receive at the dental office (not taking into account the yearly maximums). Commonly, the deciding factor will depend upon the availability as well as the monthly cost of the various plans. Each dental office will also work with specific plans and companies. If you are trying to select a plan, a good first step is to call your provider and ask which plans that office works with. That can quickly help narrow down your search.
Note: If you currently have a plan but do not know if it is a discount plan or a dental insurance plan, simply call your provider’s member service number and ask them. They will tell you very plainly if you are enrolled in a discount plan or dental insurance.