Dental Insurance Breakdown

As of 2006, only 57% of Americans have dental insurance (mostly through their employers) compared with some 84% for medical insurance, according to the National Association of Dental Plans and the U.S. Census Bureau, respectively. And some say the numbers are about to get worse. Pressured by the soaring cost of health care, many companies are being forced to take a hard look at how they spend their limited health-care dollars. Dental insurance tops the list of benefits employers are looking to pare back, says Frank Scanlon, a spokesman with the Society for Human Resource Management.

An increasing number of employers are now asking their workers to pay more — or even all — of their dental premiums, says Kathleen Strukoff, an employee benefits consultant with Aon Consulting. That could easily set you back up to $500 per year. Worse yet, some employers, especially small ones, may stop offering coverage all together.

Companies argue dental insurance is a nonessential benefit, since a patient’s total financial risk is relatively low. After all, a medical catastrophe could wipe you out financially — something that’s unlikely to happen with even the worst dental expenses.

Trouble is, if your company doesn’t offer a dental plan, you’ll find it almost impossible to buy one on your own. While nearly all dental-insurance companies once offered coverage to individuals, by 2006 only 32% of the 72 companies that belong to the National Association of Dental Plans still did so, says Evelyn Ireland, executive director of the association. While most of the coverage offered is through a Preferred Provider Organization (PPO), a good amount is restricted to discount plans, which offer members lower prices on dental procedures from participating dentists. Don’t even think about finding a traditional indemnity plan. Frankly, companies in this sector don’t want your business.

But if your employer doesn’t offer a dental plan, or is dropping your coverage, don’t start grinding your teeth just yet. We have some solutions.

Going Solo

The American Dental Association doesn’t recommend that individuals try to purchase dental insurance on their own, says Dennis McHugh, manager of the association’s dental benefit information department.

Instead, your best bet is to self-insure — in other words, set aside some “premiums” against future expenses. In fact, even those who do have coverage may have to do a little self-insuring, since some common expenses — like those for straightening your child’s unruly teeth — aren’t covered by most plans.

Fortunately, most dental costs are relatively predictable. In a typical year, the average person might have two cleanings a year, an x-ray and maybe one other procedure, such as a crown or filling, according to the American Dental Association. So here’s what you do: Sit down with your dentist and estimate your dental costs for the next year as well as further down the road. While you won’t be able to anticipate, say, cracking a tooth on a piece of hard candy, things like tooth decay and gum disease are progressive in nature and a simple X-ray should give a dentist a pretty good assessment of your future needs. (A major injury to your mouth as a result of, say, a car accident, would likely be covered by your medical insurance.)

If your employer offers it, a smart way to set aside self-insurance money is using pretax dollars in a flexible spending account (FSA). (In fact, that could be a good idea even if you do have dental insurance, since about half of the dental plans’ benefits, according to the National Association of Dental Plans, are capped at $1,200 a year for individuals and $2,500 for families, and a simple crown can easily exceed that.) Remember that you must budget your FSA savings carefully, since any money you don’t use for eligible expenses is forfeit. If your company doesn’t offer an FSA, you’ll have to set the money aside on your own in a short-term account, such as a money-market.

Discount Plans

Some of us simply don’t feel comfortable without some type of protection. But again, there aren’t many options available to individuals beyond the dental discount-card plans. And while some make sense, many aren’t worth your money.

For a small monthly fee of about $10, these plans give you access to a network of dentists who will charge you a discounted fee for each procedure. The discount can be as generous as 50% off normal charges. The largest and best-known plans are offered by Careington International and AmeriPlan USA.

Trouble is, some dentists think there’s a stigma attached to accepting a discount plan. So you may find the network of dentists quite small in certain regions. Dentists in New York City, for example, rarely participate in such plans. Yet, just across the river in New Jersey, plenty of dentists participate. Residents of California and Texas should have no problem finding a strong network of doctors offering their services at discounted rates. Residents in less populated states such as Maine or Montana, on the other hand, are out of luck. It’s often very hard for these plans to break into smaller towns where there are two or three established dentists who don’t need more business, says Barry Friedman, senior vice president of sales and marketing for AmeriPlan USA.

If you can find a plan with a dentist you trust, though, the savings can be substantial. Unlike with traditional insurance plans, there are no deductibles or caps on benefits you can receive. And all preexisting conditions are covered.

But there are also plenty of smaller fly-by-night companies that should be avoided, warns NADP’s Ireland. (Since these plans aren’t technically insurance companies, they don’t need to be licensed by each state they do business in.) “We have found a number of fraudulent plans creeping up,” Ireland warns. “It would be a shame for people to think they are getting something when they are not.” Some of these plans are out-and-out scams: They take your money and vanish. Others overpromise, advertising that certain dentists are part of their network even though these doctors have never agreed to participate.

How can you identify the good discount plans from the bad?

Avoid any company that asks you to send in your money before it mails you membership information. All legitimate plans will be more than happy to send you their marketing materials before you lay out any cash.

•  Call a few doctors on the network list to make sure they are indeed part of the plan.
•  Check with the secretary of state in your state to see if the company has registered, a requirement for any legitimate business. You may even be able check for this online.
•  Ask for the company’s national or local office address. Be wary if the person on the other end of the phone will only provide you with a post office box.

It all makes flossing look even better, doesn’t it?

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