Dental insurance policies help many people effectively budget for the cost of maintaining a great smile. Compared to medical insurance, understanding dental insurance policies is a breeze. Most policies are straightforward and specific regarding what procedures are covered and exactly how much you have to pay out-of-pocket. Dental insurance is available as part of medical insurance plans or as a standalone policy.
Overview of the System
First, here's a breakdown of how private dental insurance works. You select a plan based on the providers (dentists) you want to be able to choose from and what you can afford to pay:
- If you already have a dentist you like and they are in the insurance company's network, you'll be able to opt for one of the less expensive plans.
- If you don't have a dentist at all, great! You can choose from any of the dentists who are in-network and again have the option of a less expensive plan.
- If your existing dentist is not in the network, you can still get insurance, but you'll pay significantly more to see an out-of-network provider—so much more that you may not have any chance at coming out ahead by being insured.
The monthly premiums will depend on the insurance company, your location, and the plan you choose. For many people, the monthly premium will be around $50 a month. This means that you're spending $600 on dental costs each year even if you don't get any work done.
- Dental insurance covers issues related to the teeth and gums as well as preventative care such as annual cleanings.
- Not all procedures are covered, for example cosmetic procedures like crowns or whitening.
- Deductibles, co-pays, and co-insurance will apply, and many policies have annual coverage maximums that are relatively low, ranging from $750-$2,000 in many cases.
Waiting Period for Dental Insurance
Most dental insurance policies have waiting periods ranging from six to 12 months before any standard work can be done. Waiting periods for major work are typically longer and can be up to two years. These periods are set in place by insurance companies to guarantee they profit off a new account and to discourage people from applying for a new policy to cover impending procedures. (Learn more about: 6 Dental Insurance Plans With No Waiting Periods.)
Deductibles, Co-Pays and Co-Insurance
An insurance deductible is the minimum amount that must be paid before the insurance policy pays for anything. For example, if the deductible is $200 and the covered individual’s procedure is $179, the insurance does not kick in and the individual pays the entire amount. Co-pays, which are a set dollar amount, may also be required at the time of the procedure.
Once a deductible is met, most policies only cover a percentage of the remaining costs. The remaining balance of the bill paid by the patient is called co-insurance, which typically ranges from 20% to 80% of the total bill.
How Dental Insurance Categorizes and Pays for Procedures
Dental procedures covered by insurance policies are typically grouped into three categories of coverage: preventive, basic and major. Most dental plans cover 100% of preventive care such as annual or semi-annual office visits for cleaning, X-rays and sealants.
Basic procedures are treatment for gum disease, extractions, fillings, and root canals, with deductibles, co-pays and co-insurance determining the patient’s out-of-pocket expenses. Most policies cover 70% to 80% of these procedures, with patients paying the remainder.
Major procedures such as crowns, bridges, inlays and dentures are typically only covered at a high co-payment, with the patient paying more out-of-pocket expenses than other procedures. Every policy differs in how procedures are categorized as preventive, basic and major, so it is important to understand what is covered when comparing policies. Some policies group root canals as major procedures, while others treat them as basic procedures and cover much more of the cost. (For related reading, see: 4 Important Steps for Choosing Dental Insurance.)
Dental Insurance Does Not Cover Cosmetic Procedures
Most dental insurance policies do not cover any costs for cosmetic procedures such as teeth whitening, tooth shaping, veneers and gum contouring. Because these procedures are intended to simply improve the look of your teeth, they are not considered medically necessary and must be paid for entirely by the patient. Some policies cover braces but usually require paying for a special rider and/or delaying braces for a lengthy waiting period.
While most medical insurance policies have yearly out-of-pocket maximums, the majority of dental policies cap the amount of annual coverage. Coverage maximums typically range from $750 to $2,000 per year and generally speaking, the higher the monthly premium, the higher the yearly maximum. Once the yearly maximum is reached, patients must pay for 100% of any remaining dental procedures. Many insurance companies offer policies that roll over a portion of the unused annual maximum to the next year. (Learn more about: 5 Dental Insurance Plans With No Annual Maximum.)
Applying Tax Credits for Dental Insurance
Any leftover tax credit not used to pay for your family’s health insurance purchased through Healthcare.gov may be applied to pediatric dental insurance premiums if your medical insurance policy does not include dental coverage. If your health insurance policy includes children’s dental coverage, you cannot use tax credits to buy an additional plan.