In my Investopedia article, Should You Bite On Dental Insurance?, I explain how dental insurance works. Below, I've elaborated on that explanation, including some numbers that help illustrate my point.
Let's say you have amazing teeth. You could go for five years without a cleaning and you still wouldn't have a single cavity. But, because you don't want to take any chances with the only set of teeth you have and your employer doesn't offer dental benefits, you decided to buy your own dental insurance. You get your teeth cleaned and examined the recommended two times per year, and you also get your recommended bitewing x-rays once a year (as opposed to a full set, which you need once every five years). Your total dental expenses per year would be $600 for insurance premiums, $0 for cleanings and exams, and $0 for bitewing x-rays. These services are generally considered "preventive" and are therefore free if you're insured. Congratulations, you've only spent $600 on dental work for the whole year! However, without insurance, you would have only spent about $350 total for the two cleanings and exams and $50 for the bitewing x-rays, a savings of $200. (Dental costs seem to vary regionally and sometimes with how long you've been a patient of the same dentist, so take these numbers with a grain of salt.) Here's a chart to illustrate the cost of being insured versus not being insured in a good year.
|Good Year With Insurance||Good Year Without Insurance||Savings by Having Insurance|
Here's a loose approximation of what you'll spend for common dental work with insurance/without insurance:
Cleanings and exams: $0/$175 (for one cleaning+exam) (covered 100%)
X-rays, full set: $0/$150 (covered 100% every five years)
X-rays, bitewing: $0/100 (covered 100%)
Fillings, amalgam (silver): $26/$130 (covered 80%)
Fillings, composite (tooth-colored): $30/$150 (covered 80%)
Here's what you'd spend for big ticket dental work with insurance/without insurance:
Root canal: $400 / $800 (covered 50%)
Crown: $450 / $900 (covered 50%)
Now we can calculate your potential savings in a somewhat bad, but not really atypical year. You still need the exams, x-rays, and cleanings no matter what kind of year you're having, so with insurance you're starting at $600. Let's say you need three fillings and that you, like most people, prefer the more attractive, more expensive tooth-colored fillings. (It's important to note here that the cost of a filling can vary by over $100 per filling depending on the tooth being filled, the number of surfaces that have to be drilled, and the type of material being used to fill the tooth.) Let's say that you have two small, one-surface fillings on two of your front teeth and one larger, two surface filling on one of your molars. The regular price of these fillings is $120 each for the small ones and $180 for the large one, making the insured price for these fillings is $30 each for the small ones and $40 for the large one. Now you've spent a total of $700 ($600 in insurance premiums plus $100 for filling copayments). If you didn't have insurance, you would have spent $450 on the cleanings, exams, and x-rays, plus $120 each for the small fillings ($240) and $180 for the large filling. That's a total of $870. Now you've come out ahead for the year by $170 thanks to your insurance.
|Average Year With Insurance||Average Year Without Insurance||Savings by Having Insurance|
Now let's dig into a really bad year. On top of the work described in the previous section, you also need a root canal and a crown. Ouch!
Now, not only are the root canal and crown incredibly expensive, but you only have $130 left in that annual maximum. That means that you don't get the full 50% copayment for these services, but rather, only $130 of the $1700 bill will be covered. You're not saving as much as you thought you were going to when you signed up for that insurance plan. Double ouch.
|Bad Year With Insurance||Bad Year Without Insurance||Savings by Having Insurance|
Over a five year period, a typical patient might have three good years, one average year, and one bad year.
|Five Years With Insurance||Five Years Without Insurance||Savings by Having Insurance|
Also, there is one way you might be able to get a good deal on dental insurance if it isn't offered through your employer and you aren't married. If you have a significant other that you live with but you aren't married (legally or otherwise), in some states and with some plans, you can qualify as a domestic partner regardless of whether you are a same sex couple. You may have to live together for a certain period of time, like six months, before you officially qualify. On the other hand, some insurance companies will make you jump through serious hoops to get your totally legit same-sex domestic partner on your insurance plan. It sounds terribly unfair, but I imagine the rules are in place to prevent people from claiming their roommates as domestic partners or something. (How this is good for the insurance company's bottom line is beyond me -- for many people, their only options are cheap insurance or no insurance. In most cases, I imagine that insurance companies are only losing money by preventing potential customers from getting insurance, regardless of whether they're in a relationship or the nature of that relationship. How does being in a heterosexual relationship make one a better insurance risk?)
To sum up, the lesson here is that you probably shouldn't buy dental insurance unless you can get it cheaply as part of a group plan that will get you significant discounts on both the premiums and the dental work itself. While the monthly dental insurance premiums don't cost much more than a basic cell phone plan, those payments really add up. Add to that a low annual maximum, and you're unlikely to win the dental insurance game, even if your teeth have frequent problems.
One final note: don't go into or add to your credit card to pay your dental bills -- most dentists will work out a payment plan with you if you don't have the savings or the cash flow to pay your bill all at once. Following your dentist’s recommendations for at-home oral care and not neglecting your regular cleanings every six months are the best way for most people to save on dental care.
Photo by greefus groinks