According to a report by the National Association of Dental Plans and Delta Dental Plans Association, approximately 205 million Americans, roughly 64% of the population, had dental insurance coverage at the end of 2014.
Most people get their coverage from an employer or organizational group insurance plan. A smaller number buy individual insurance coverage. If you're thinking of joining their ranks, there are some facts and figures you should know. And you might want to chew on 4 Important Steps For Choosing Dental Insurance first.
Types of Policies
Three basic types of dental insurance plans exist.
Dental Health Maintenance Organization
DHMOs are similar to any HMO. They are structured plans with a set group (network) of dentists who provide care for a low monthly premium. DHMO plans have no waiting periods (for coverage to begin), deductibles, an annual maximum on benefits or claim forms to fill out.
DHMOs are excellent for preventive services (checkups, cleaning and X-rays), which are typically covered at 100%. Most other covered procedures come with a co-pay. However, these types of plans tend to limit major and/or restorative procedures. They often pay 50% or don’t cover the procedure at all.
Dental Preferred Provider Organization
DPPOs parallel regular medical PPO plans. They negotiate lower rates with dentists in their network, aka their "preferred providers." Some also cover visits to an out-of-network dentist, though co-pays are higher for these.
Most DPPOs are what is known as "100-80-50" plans. This means that, if you go to a preferred provider, the plan covers 100% of preventative services, 80% of certain basic procedures and 50% for major services such as crowns.
There are limitations. Not all procedures are covered, and DPPOs frequently have a calendar-year maximum (that is, a maximum amount in expenses they'll reimburse within the same year) and a deductible that must be met. Usually, there are waiting periods for certain procedures from the time you purchase the policy until you can have that procedure done.
Indemnity Dental Insurance
Also known as “traditional” insurance, dental indemnity insurance plans operate under a “fee for service” structure. The main advantage of an indemnity plan is that it allows you to visit any dentist.
Indemnity plans pay a set amount based on a pre-calculated “usual, customary and reasonable” (UCR) fee. Very often, you must pay an additional amount out of pocket. There is also usually an annual maximum benefit – typically about $2,000.
With an indemnity plan, you generally have to pay your share of the cost of service up front. Some providers require that you pay the full amount and then be reimbursed by the insurance company.
The Financial Bite
As with all types of insurance, the cost of dental coverage varies by area and by the type of coverage obtained. According to NADP, for most people the cost is less than a daily cup of coffee. Of course, the cost of that java can range from roughly $1.50 for a medium cup at McDonald’s to $4.00 for a large Caffe Latte at Starbucks.
Since there are two main ways to obtain dental insurance – group plan or individual purchase – prices are broken down using those categories.
A group plan is, obviously, less expensive than an individual plan. Employers often pay part of the premium, which can lower your cost. According to the most recent figures available from NADP:
- DHMO plans average about $225 per year for an individual and $445 for a family.
- DPPO plans average $285 for an individual and $866 for family coverage.
- Indemnity plans run about $288 for an individual and $666 for a family.
Individual policies are typically more expensive than group policies. In addition, coverage may be limited. For example, individually purchased policies rarely cover orthodontia and waiting periods often apply – especially for major procedures.
According to NADP, the annual cost of coverage as of 2009 (the last time these data were collected) ranged from $48 to $180 more than a comparable group policy for individuals – and from $240 to $420 more than a comparable group policy for families. However, there may be ways to cut some of the cost: see Can I get dental insurance with Obamacare?
The Bottom Line
The cost of dental insurance is an important factor, but not the only one. For example, how important is it to be able to visit the practitioner of your choice, as opposed to one who's in the insurer's network? When comparing the price tags of two policies, it’s also important to consider what sort of care is covered and when you can get it. If you must wait a year for a needed procedure, you risk your condition getting worse, and the cost of treatment getting more expensive. In addition, if a procedure you need – now or in the future – is not covered by your policy, the policy isn’t worth much to you, no matter how low its premiums or co-pays.
For some specific insurers, see 5 Places to Get the Best Dental Insurance.