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Dental Insurance 101

Well, it’s the time of year when the mailbox includes the annual open-enrollment benefits package filled with complex, double-speaking terminology that can be absolutely mind-boggling.  I know because the package comes to my house, too. This year, I am sharing some observations and recommendations on how to stretch your health care dollars in the area of dentistry.

You may have wondered what the “M.P.H.” designation on my business card means. I completed a master’s degree in public health in 1998, concentrating on health services delivery and organization. I wrote my thesis on health maintenance organizations. 

Unlike most other industrialized countries, the United States has relied on capitalism to finance its health care needs.  In the 1970s, the government became aware that projected health care needs would outpace funds.  In an effort to shift the costs to the private sector, the government gave huge financial incentives to the burgeoning health maintenance organizations.  Since that time, three types of health care delivery systems have developed, based on the way they are financed.

HMO: The HMO pays a fixed amount of money to the health care provider.  The health care provider must provide all or most of your care and assumes the risk if you have high needs.  In the late 1980s, I worked part time as an employee dentist in HMO offices.   Typically, the owner was paid less than $120 annually to provide all cleanings, x-rays, fillings, crowns, bridges, root canals and treatment for periodontal disease, not to mention the doctor’s rent, staff salaries and dental supplies.  (The offices used inexpensive labs, low-quality materials and deferred treatment and referrals to contain costs.  I was constantly fighting with the owners to give my patients the care they needed.)  The average wait for my patients between appointments was 2-3 months even if treatment was in progress.

PPO:  A dentist signs up to be a preferred provider.  This means the dentist agrees to accept the fees set by the dental insurance company for the PPO.  All the dentists in a given geographic are paid those same fees.  Each company sets its own PPO fees.  The patient must choose from the list of these providers accepting the set fees.

Woods Dental Practice signed up to be a preferred provider with all of the major insurance carriers in the late 1980s.  After 12 years of receiving no fee increases, we realized that we were not meeting our costs of doing business (rent, salaries, lab fees, dental supplies), even before the doctors were paid.  Our choices were to use cheaper materials, find a cheaper dental lab, work faster and produce a lesser-quality product, or use less-expensive dental supplies. 

None of those choices was acceptable to us.  For those plans, we changed our status and became an out-of-network provider. As an out-of-network provider, we continue to accept all PPO policies. We have found that most of our patients pay costs similar to those they would pay if we were an in-network provider, because we are reasonably priced and our fees fall within the PPO guidelines for the plan.  Our patients pay the same or slightly more to have the freedom to pick the dentist they choose rather than be limited to a list of providers.  We use the best materials, we take the appropriate time to do beautiful dentistry, and we are dedicated to excellent care.  Our office will be happy to verify your insurance benefits and provide an estimate of costs for work to be provided in our office.

FEE-FOR-SERVICE:  This is the traditional, standard policy that has existed since the 1950s, but it too is changing as the cost of health care rises.  In a fee-for-service plan, you pick the service provider you want, and the insurance pays a percentage of the cost.  Percentages vary depending on the service and are negotiated item by item with your employer. As fee-for-service was originally designed, you paid the provider out of pocket, filed a claim and your insurer sent you a check to cover its part of your cost. In the 1970s, many providers began submitting your claim for you, receiving payment directly from your insurer and billing you only for your share of the costs.

A study in 1998 compared dental policies in the years 1960 and 1996.  In 1960, the average dental insurance policy had a $1,000 maximum payout.  In 1996, the average dental policy had a $1,000 maximum payout.  When corrected for inflation, the 1996 amount of insurance should have been $4,667!!  Of course, the cost of the annual premium had gone up, too.

WHAT TO DO??
Purchasing appropriate, skilled dentistry is the most cost-effective way to finance dental care.  Providing quality dental work takes time.  We don’t take shortcuts: We use the best materials possible and the latest proven technologies to provide beautiful, precise, excellent dentistry for our patients.  Quick, cheap work ends up needing replacement much more rapidly and, over time, is far more costly, besides jeopardizing the health of the teeth. 

A good way to maximize benefits is to work with your dentist to plan next year’s dental costs and put that money into your flexible or medical savings account pre-tax.  Never leave unused dental benefits when you have diagnosed work—you are missing out on free money.  More and more literature points to the overall physical benefits of a healthy mouth.  The November 2005 issue of Good Housekeeping included an article titled “What Doctors Wish You Knew:  75 Tips for Staying Healthy.”  Tip No. 12 said that, “to help prevent a heart attack or stroke, floss your teeth daily.”  The article continued, “Flossing prevents gingivitis, a chronic gum infection that can trigger inflammation in your arteries and increase the risk of dangerous clots.” 

Investing in oral health pays physical and financial dividends.  We are more than happy to discuss your dental insurance questions or create a plan to maximize your insurance benefits at any time. Please feel free to call me at 310-676-2922 or e-mail me at michelleawoods@woodsdental.com

Thank you,

Michelle A Woods DDS, MPH