How Does Dental Insurance Work?
There are two types of dental insurance plans and those are traditional dental plans and dental indemnity plans. Traditional dental insurance is structured in almost the reverse of major medical health insurance,
With major medical health insurance there is a deductible that must be paid before the health insurance company will share in any of the costs of medical bills with the insured policyholder. Once that happens, there is coinsurance and then an out of pocket max that an insured is liable for in any given plan year.
To clearly illustrate this, an insured could have a million dollars in medical bills during a given year, and they would only be responsible for their portion of out of pocket responsibilities. Let’s say in this scenario it’s $5000.
It’s the reverse on dental! With traditional dental coverage, the maximum out of pocket most employees and individuals will typically see on a traditional dental plan is $1500. That $1500 is the most that your plan will actually pay for you towards coverage for the year after you have met your deductible. Deductibles on traditional dental plans can be anywhere from $0-$350 on average. Next comes the coinsurance, and the coinsurance depends on what type of procedure is done.
Coinsurance on Dental Plans:
- Preventative Services: Cleanings 2x per year and X-Rays 100% These services are generally covered at no extra cost
- Basic Restorative Services: Fillings 80%. Leaving the patient to foot 20% of the bill
- Major Services: Crowns, Bridges, Dentures 50%. Leaving the insured to cover the other 50%
Maximum Out of Pocket on Traditional Dental Insurance:
If for example an insured had $5000 in bills and had major work done typically, what would happen on a standard dental plan is that the dental insurance company would cover 50% of the costs up to $1500 after the deductible was paid by the insured.
So after a deductible, if there was one, the insured would have to pay 1500 of the first $3,000 in bills covering their 50%. But, the insured would have another $2000 to pay after that because their plan only covers up to $1500in cost sharing., But it only pays 50% for major work, It’s also worth noting that monthly premiums do not count towards deductibles or cost sharing in the maximum out of pocket costs.
The other type of dental coverage that can be combined with traditional dental or used by itself are dental indemnity plans, You’ll see those with a company like an AFLAC.
With these indemnity plans, you are not restricted to a network and the insurance company you have coverage through agrees to cover a specified dollar amount on a certain type of procedure. For example, if you needed 3 crowns and your plan promised to pay $500 per crown, and offer up to $2,000 of coverage for the year you would just have your dentist bill the company directly and then you would be responsible for any extra costs.