Dental and Vision Insurance

“For there was never yet philosopher that could endure the toothache patiently.”

William Shakespeare, Much Ado About Nothing, Act 5, Scene 1, line 37

For many years, clients have asked me about Dental Insurance.  Since Original Medicare does not offer any Dental coverage, it is a natural question that arises when we discuss comprehensive care and when comparing benefits to Employer plans or to coverage through a Medicare Advantage Plan.  Early on in the discussion I would often say something like,  

“Whatever expectation you have from a Dental plan, you should lower it because none of them are good.” 

I am no longer so cynical about Dental coverage; there are a few plans that don’t suck.  However, I still strongly believe that expectations need to be calibrated to reality.  To properly set expectations, it is important to know the jargon and generally how many Dental plans work at a high level.  That way, you can decide if you truly need Dental insurance and what features and benefits are important to you personally. 

Real Dental Insurance coverage (not a discount plan or membership arrangement) will likely classify dental work in the following 3 categories: Preventive, Basic and Major.  Let’s define these categories. 

From the National Association of Dental Plans; Glossary of Dental Insurance and Dental Care Terms, sited on May 1, 2024 

• Preventive Services = “Diagnostic and Preventive Services: A category of dental services that are often paid by the dental plan without deductibles or co-payments. Usually includes exams, cleanings, x-rays, fluoride treatment, sealants, and space maintainers. Also called Class I, Group I or Type A services.” 

• Basic Services = “A category of dental services. Usually includes fillings, extractions, root canals, and root planning. Also called Class II, Group II or Type B services.” 

• Major Services = “A category of dental services. Usually includes crowns, dentures, implants, and oral surgery. Copayments or coinsurance is typically higher for these services. Also called Class III, Group III or Type C service.” 

WHY KNOW THE ABOVE CATEGORIES? 

Because the amount of one’s dental bill that is covered by insurance is based on the category of services.  Very often, Dental plans breakdown the coverage similar to this: 

• Preventive Services: Covered 100%.   
• Basic Services: Covered 80%. 
• Major Services: Covered 50%. 

A deductible may need to be met annually before anything is covered, but sometimes the deductible is a one-time deductible for the life of the policy, or it may only apply to Basic and Major Services.  Every policy is different. 

In my experience, the above coverage percentages are typical, but there are many exceptions and variations.  I will refer to the above the following shorthand: PS100 / BS80 / MS50.  Going forward, I can write examples using this shorthand to show the Coinsurance percentage for the various service categories.  

Another big variable common to most Dental Plans is the Annual Maximum.  Again, pulling from the Glossary of Dental Insurance and Dental Care Terms 

ANNUAL MAXIMUM:  “The most a dental plan or dental policy will pay toward the cost of your dental services. After the plan pays this amount, you must pay the total cost of your dental services but at a discounted cost if your dentist is in a network. Only 3% to 5% of people with dental policies reach the annual maximum each year.” 

In my opinion, the Annual Maximum and Major Services coverage are the two most important variables when weighing the value of a specific Dental Plan.  I believe this is because these two variable determine the potential “risk” / costs that can be transferred to the insurance company.  I’ll explain my point by asking two questions. 

1. If you were certain that the only dental care you ever needed to pay for was preventive care, would you pay a $30 monthly insurance premium to cover preventive care that only add up to $500 annually? 

2. If you were certain that the only dental care you would ever need was a small cavity filling ever three or four years, plus annual preventive services, would you pay an extra $200 in annual premiums to occasionally reduce a $500 filling expense down to $100 (80% discount)? 

Some people would say yes to both questions above, but in these examples, the benefits received are barely above the premiums spent.  Moreover, they are not the sort of expenses that are going to make a tremendous impact on someone financially. 

The point is – I don’t believe people need an insurance plan to cover occasional, relatively minor expenses.  Insurance, all insurance, is about transferring risks that, if experienced, would have a significant financial impact. 

Reconciling this belief in the Dental insurance context means that the potential significant financial impact is most likely to occur in the Major Services category, not the Preventive or Basic Services categories.  Furthermore, if the Annual Maximum on a Dental Policy is only $1000, I may still be very exposed to the financial impact I’m trying to transfer.  Therefore, I must find a balance between Premiums and Benefits based on my perception of risks and my ability to accept the risk on my own. 

Think of Dental Insurance like a Poker Game 

Personally, I don’t play poker and I only know, or think I know, the basics of the game.  But I believe this loose comparison is helpful to understanding the “game” of Dental Insurance.  (Real poker players, please ignore and overlook any errors in this analogy.) 

The Dental Policy Premium = The Ante.  It’s the amount you lay down to get into the game. 

The Dental Policy Deductible = The Call.  It’s an amount in addition to the Ante that you might have to pay in order to have a chance at the pot.  

Not filing claims = Folding.  When you receive no benefit from the policy, your Ante was effectively lost. 

Hitting the Dental Policy Annual Maximum = Winning the pot.  When your policy pays out the maximum amount of benefits, you win.  Although, in the real world this means that you had a lot of dental work done, so that’s hardly fun. 

Continuing with the Poker analogy –  

Let’s say I spend $50 a month in premiums ($600 annually).  This is my Ante, so to speak.  If I am confident that I will get two cleanings, two exams and one Xray each year with or without Dental Insurance, and if my Dental policy covers 100% of all the Preventive services, then I can consider the cost of these Preventive services a reduction of my Ante.  In other words, if all the Preventive expenses paid by the policy add up to $400, then the amount I “anted-up” is only $200.  I can look at the 100% Preventive coverage as a partial return of my premium / Ante.  Of course, this is only true if I actually go to the Dentist and take advantage of the Preventive services. 

I spent $600 in premiums.  I saved $400 in services.  I netted $200 out of my pocket. 

With this mindset, in the years when I don’t have cavities, toothaches, or other dental problems / needs, I am a happy smiler, but I lost my $200 (net) Ante.  However, in the years when I have Major dental issues, my policy kicks in and reduces the amount I would have spent had I not had the policy.  When this reduction of expenses is more than $200, my bet is paying off and I’m recouping some of my previous losses.  If I “win the pot” each and every year, I either have a bad dentist, bad hygiene, bad genetics or a combination of all of the above.  Like in poker, sometimes you win, sometimes you lose. 

The Importance of Staying in the Network 

Another key variable that makes a huge difference in the value one receives from a Dental Plan and is often a huge frustration is NETWORKS.  What type of network does the Dental Plan have – HMO-style or PPO-style?  How big is the network?  And most importantly, is the dentist who you want to go to a part of that Network? 

I’ve been burned more than once by calling ahead to a dentist, asking, “Do you take such and such plan?”   
“Yes, we take that plan,” comes the reply. 

But after the procedure, when I got to the desk to pay, I discovered that they are happy to bill my insurance plan, but because they are not in the plan’s network, the prices are more than I expected.  IT’S SO FRUSTRATING!  How can they tell me that they accept the plan, but not tell me that they are not an In-network provider?  The answer – because I didn’t ask the right questions. 

To remedy this, the best way to verify network providers is to go directly to the Dental insurance plan’s website or call them, rather than the dentist.  It’s good practice to document your findings, so that if there is a discrepancy, you have evidence of your effort to verify the dentist’s network status.  You will not need to do this for every visit.  Once the network status is confirmed initially, just a quick question at the dentist office on subsequent visits should be good enough to avoid problems: “Have there been any changes to your networks?  I want to confirm that my insurance coverage is still the same.” 

For you to receive the best value and benefits from a Dental Plan, you must use dental providers that are In-network.  The In-network providers have already agreed to certain pricing, so not only is your policy picking up a percentage of the bill, often the itemized services are priced lower to begin with.  This translates to your percentage of the bill being lower too. 

There are Dental Plans that are not network based.  This means, theoretically, that you can visit any dentist you want, and the plan gives you the same coverage everywhere.  Obviously, this is an attractive draw to such plans.  As you might expect, the No-network plans are more expensive, so you should really weigh out the costs and benefits to determine if the higher premiums are worth it.