Dental Insurance: Know Your Financing Options

Authored By: Lesley Ranft

• Options for the Uninsured

The mere thought of out-of-pocket expenses prevents many Americans from securing dental treatment. Today’s dental treatments may range in cost from $300 per year for simple professional dental hygiene visits, to $25,000 or more for restorative dental work or cosmetic dentistry. Additionally, compared to medical insurance coverage, dental insurance plans generally offer reduced benefit structures.

Today, however, stronger financing options are available for out-of-pocket dental treatment costs, and dental insurance plans still reduce your financial burden in some ways.

Dental Insurance Plans – What’s Available?

Various types of dental insurance plans are available for individuals in the U.S. In fact, some employers offer programs whereby a certain portion of income is allocated to a special flexible spending account before taxes are assessed. The employee benefits from less taxation and is able to use these funds for dental or medical treatment.

You may not be aware that you have flexible spending account options available through your employer for dental or medical needs. Check with your employer to see if a flexible spending account is an option for you.

No two dental insurance plans offer identical benefits. Each plan has specific limitations and exclusions. Get to know your plan. For example, if you require a dental filling and would prefer a composite material, evaluate the benefits allocated in the plan for composite fillings. Many insurance companies will only reimburse composite filling costs at a rate equal to that of an amalgam filling. You would be required to pay the remaining balance.

Cosmetic dental procedures are not traditionally covered by dental insurance. However, if you have insurance and require veneers for restorative purposes, ask your dentist about the possibility of filing for reimbursement for a percentage of the costs.

Dental Insurance Plan Choices:

• Indemnity Plan: An indemnity dental insurance plan allows you to select your own dentist. The plans are considered fee-for-service and come with limitations and co-payment options. This means that you pay a flat fee for the dental visit, but you have an annual limit on coverage for dental spending, and specific coverage limits may apply to individual dental procedures.
• Self-Insurance Plan: Self-insurance dental plans may be similar in nature to indemnity plans, though you may or may not have the option to select your own dentist.
• Closed Panel Plan: Closed panel dental plans limit you to using a specific group of facilities and the number of dentists available to you.
• Capitation Plan: Capitation dental plans designate specific dentists 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): PPO dental plans are limited to a group of dentists who are available to provide dental care at a reduced cost.
• Direct Reimbursement Plan: Direct reimbursement dental plans allow employers to directly reimburse employees for dental services they receive.
• Dental Care Service Plan: Dental care service plans make use of a group of dentists who form a non-profit organization to provide dental services at set fees.

Understanding Your Dental Fees

It is important to ask the dentist’s finance manager about dental treatment costs prior to receiving treatment. Dental finance managers can call your insurance provider to pre-determine the out-of-pocket costs associated with your procedure.

Dental insurance plans differ in the level of reimbursement offered for certain procedures and on annual dental spending caps. Some plans may limit the waiting period before certain dental treatments are rendered. Additionally, plans typically have exclusions, meaning that costs for certain dental procedures will not be reimbursed.

Usual, Customary, and Reasonable (UCR) Fees

The most common term used to identify the fee for dental treatment is called Usual, Customary, and Reasonable (UCR). UCR fees are determined by insurance providers based on the typical costs associated with various dental procedures.

Here’s an example: Assume your procedure costs $90. Your dental insurance provider may have a UCR for the procedure of $60. You would therefore be responsible for payment of the difference: $30.

Dental Financing

Numerous independent finance plans and reputable finance companies offer a wealth of options to meet the budget and credit limit requirements for most applicants. Funds received from dental finance companies may be used for out-of-pocket dental costs or for the dental procedure itself. There are “same-as-cash” finance options with 0% interest for extended time periods ranging from 12 to 24 months, as well as other low interest rate options requiring monthly installments with little or no down-payment.

Treatment plans may begin the day of your initial consultation or up to 60 days after application approval. In order to determine the right finance option, contact your dentist and ask if the practice has made an agreement with one or more finance companies.

You may complete a dental finance application when you visit your dentist, online at a finance company website, or through a toll-free number. Usually, finance approval arrives within minutes. Many times, credit history does not influence the approval process. Of course, with any finance agreement, read the fine print to check for hidden fees. If you do not have dental insurance, dental financing may make sense. At the same time, resources are available to help low-income, uninsured individuals receive dental treatment.

• Options for the Uninsured

[Updated May 2008]

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