Dental Insurance and Dental Assistance Plans
Too often, we only hear dentists and other health professionals complain about the paperwork and intrusions into the doctor/patient relationship that come with dental insurance. It is only fair to give the insurance industry the credit it is due in making modern preventive dentistry available and widely used by the general public. Regular dental checkups and preventive care were once common only in the upper middle and wealthy income groups. This was never a good idea. The person who cannot afford expensive rehabilitative dentistry needs prevention more than someone who can afford complex dental care, but the simple truth is that before dental insurance became widespread, the average person did not seek regular dental checkups and saw a dentist only when pain alerted the patient to his need for dental care. Millions of people now get regular preventive care who in the past might not have done so and the nation's dental health is much better for that change. Now, with increasing pressure on employers to reduce healthcare costs, that great benefit to the public is in danger.

There are several types of dental insurance and assistance plans. More briefly, the plans fall into these categories:

Indemnity Plans are the traditional form of dental insurance. You are free to choose your own dentist without penalty. The plan pays all or part of the dentist's fee to the extent that it does not exceed the Usual, Customary and Reasonable fee, or UCR, for that service. Insurance companies calculate the UCR in differing ways, but it is usually between the 50th and 80th percentile fee for the area. A typical indemnity plan will pay 100% on preventive services, 80% on common restorative services, and 50% on major treatments such as crowns, prosthetics, and orthodontics. The payments are usually limited by a yearly maximum payment and there is sometimes a deductible which the patient must pay before coverage begins. Most well designed plans do not apply the deductible to preventive services in order to encourage you to make use of those cost saving services. Most dentists now accept assignment of insurance benefits which allows the insurance company to pay the dentist directly for its portion. The patient is responsible for the portion of fee not paid by the insurance. It is amazing that the UCR fee varies between insurance companies and between different plans in the same company. This is because benefits are determined by the premiums paid for a particular plan.

PPO's {Participating (or Preferred) Provider Plans} are similar to indemnity plans in most ways, but patients are offered financial incentives to select their dentist from a list of dentists who have entered into an agreement with the insurance company to accept a pre-set fee. This pre-set fee may be the average for the area or some discounted amount. The plan may pay a higher percentage or eliminate the deductible when a participating dentist is chosen to induce patients to select a participating dentist. Further, the dentist agrees not to charge the patient for any amount that his normal fee exceeds the pre-set fee. For example, under an indemnity plan, if a dentist charges $105 for a service covered at 80% and the UCR for that service is $100, the insurance will pay $80 and the patient is responsible for the other $25. Under a PPO plan with similar coverage and a pre-set fee of $100, The insurance would pay $80, the dentist would write off the $5 by which his fee exceeds the agreed amount, and the patient would be responsible for the remaining $20.

Table of Allowances Plans pay a fixed amount for a given service, regardless of the what the dentist charges. The patient is responsible for the remainder. Such plans can be quite good if they keep up with inflation, but few do. Mailhandlers, common among Federal employees in this area has not adjusted its table of allowances for almost ten years.

DHMO's or Dental HMO's are not dental insurance at all. Under these plans you must choose a participating dentist to receive benefits. These plans are of 2 types.

  • Capitation: The dentist receives a small monthly payment for each patient he is assigned. He is not paid for any preventive or restorative treatment he provides by the insurance company except for that capitation (by the head) payment which he receives whether he treats you or not. Since treating patients costs the dentist money, he fares best if he does not treat his patients at all. This is a clear conflict of interest. I consider all of these plans to be fundamentally dishonest and I do not participate in any of them.
  • Fixed fee for service: The plan provides a fee schedule for the patient that they have arranged. This fee schedule sets the fees so that it is in the best interest of the dentist to cut costs in order to make a profit. It pays to use low quality low cost laboratories because the use of a high quality lab may eliminate any profit a dentist might have.
Discount Referral Plans These plans are commonly "included" in membership in some organization. The "insurance" pays nothing to the provider at all. Typically, in return for having patients from the organization referred to his practice, the dentist provides "free" examinations and gives some percentage discount to the members. There is no checking of the fees by the plan, so dentists participating in these plans can simply boost their fee enough to make the discount meaningless, much as is often done in going out of business sales at bankrupt stores. A good rule, both in dentistry and elsewhere in life, is that anything you are given for "free" is worth every penny you paid.

Direct Reimbursement Plans are the newest entry into dental care cost assistance and hold great promise. The American Dental Association is promoting Direct Reimbursement Plans and provides and assistance to employers in establishing these plans. The insurance companies are bitterly opposed to them, largely because they eliminate the insurer altogether. In Texas the Texas Dental Association has established Paid Dental. The patient pays for his treatment (many dentists will accept a post-dated check) and brings the paid receipt to his employer to be reimbursed in whole or in part. The percentages of reimbursement are based on the benefits used. A typical plan might pay 100% of the first $200 of dental expenses, 80% of the next $500 and 50% thereafter until an annual maximum of $1000 is reached. Because the patient's share of the expense increases as more benefits are used, the patient is discouraged from overuse of the benefits and encouraged to use his shopping skills to get the most for his and his employer's money. Any additional cost incurred by allowing the patient to control his own treatment is more than made up by eliminating the insurance company's processing costs and profits. These plans may hold the key to providing effective dental cost assistance while providing employers with savings comparable to the managed care scams and maintaining real benefits to the employees.


Stuart A. Greene, DDS-FAGD
2009 Birdcreek Terrace Temple, TX 76502 254.773.9007 | Fax 254.773.8051
©2004 Stuart A. Greene, DDS-FAGD | Online since 1996 | Updated Continuously