Consumer Alert: Dental Insurance that Doesn't Pay
Normally when you buy insurance, you expect that the premium
you pay goes toward covering the cost of your claims.
Unless you have an employer or other party to pay a portion
of your premium, you also must realize that your premiums are
usually expected to exceed the amount that the insurance company
pays out, but that the insurance company exposes themselves to
the risk that they will actually have to pay more out than the
premiums you have paid.
For some dental plans, however, the insurance company doesn't take this
risk.
It knows in advance that the premiums charged will exceed the claims
paid.
It knows this because, under certain dental plans, the insurance
company never pays any claims!
Who pays for the free cleanings?
Typically, these plans include two free cleanings a year.
Because the annual premium for these plans is likely to be
about the same as what two cleanings would cost, it seems like
a "can't lose" deal for the subscriber.
But if the subscriber isn't paying for the cleaning and the
insurance company never pays any claims, how does the dentist
get compensated?
The dentist gets compensated by having you walk into his office.
Dentists accept schedule of fees
The insurance company attempts to locate dentists who will agree
to accept the fees specified on their fee schedule, which
includes the two "free checkups" a year.
Dentists are often willing to do these free checkups for the same
reason that Sears or K-Mart will do a free "safety checkup"
on your car: the odds are good that they can find some work that needs
to be done, which will pay for their time and trouble to do
the checkup and much more.
What's wrong with these plans?
This is an example of the "no free lunch" theory of economics
(as in "there ain't no such thing as a free lunch").
As an individual, you may be better off with such a plan than
without one.
Then again, maybe not.
Here are the problems that Cagey Consumer has with
these plans:
-
nothing for something
The biggest problem with these plans is simply that the
insurance companies get something, but do nothing for it.
They accept insurance premiums but accept no risk.
It can hardly be good public policy to allow such plans
to operate.
-
inadequate disclosure
These plans never tell prospective subscribers (at least
in language that they are likely to recognize) that they
aren't really providing any insurance, but are instead
acting as a "buyer's club" which negotiates with certain
providers for lower fees.
-
No coverage for other than least expensive service
When a dental insurance plan provides a certain level of
reimbursement for a given service, but the patient follows
the advice of his dentist and opts for a more expensive
service, most dental insurance plans will at least pay for
what they would have paid had the least expensive procedure
been performed.
With these plans, there is usually no fee reduction when
a more expensive procedure is performed.
-
dishonest dentistry
There are too many ways that a dentist may be
"swayed" by provisions of the dental plan that alter
his recommendations as to the services provided or
his opinion of the necessity of the procedure:
-
The dentist may encourage the patient to have work
done, yet may claim that it is not necessary, so the
reduced fees in the contract schedule do not apply.
-
The dentist may advise the patient that he could
provide treatment covered under the plan, but that
recommended treatment is something which the plan
does not cover.
-
The dentist may even determine that the "free cleanings"
are inappropriate for you, and that you instead
require services which are not free.
What You Can Do?
Dental insurance generally is good public policy because
people are likely to benefit from the preventive dentistry
that these plans encourage.
Unless you're wealthy enough to be "self-insured", your best
option is to get "real" dental insurance that actually pays
on claims.
But if that option is not available to you, here are
some possible alternatives:
-
Find a dentist participating in one of these
plans who is convenient to you.
Contact that dentist directly, and offer to pay
the premium to the dentist instead of to the plan
for the same coverage.
(While this doesn't save you any money, the dentist
may feel that he's at least getting some compensation
for the "free cleanings" and perhaps would be less
prone to take advantage of you.)
-
Dentists who are building a business will often offer
introductory rates for an exmination and cleaning.
Instead of making an appointment, ask to see their
schedule of fees.
See if they will agree to a flat percentage
reduction from those fees.
(Remember, some dentists give away their
services for subscribers in certain plans,
so why shouldn't other dentists be happy to accept 75%
of their standard fees when you walk in the door?)
While you may consider these approaches unconventional,
there's no evidence to suggest that they won't work.
In any case, you will be sending a message to the dentist
that you are aware of his need to be compensated, but he needs
to be aware of your need to limit your costs as well.
Related links:
A Guide to Dental Insurance Benefits (ADA)
Dental Insurance and Dental Assistance Plans (Donald Tabor, DDS)
Dental HMO's are Fraud (Donald Tabor, DDS)
explanation of 3rd party payments (Corbin Kinser, DDS)
Dental-Related Internet Information List of Links
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