The Trouble With Dental Insurance

I get asked -- all the time -- about dental insurance. And it's almost never a "good" conversation. In fact, it's usually along the line of "why is dental insurance so lousy?"

And my patients have a point -- dental insurance typically is pretty lousy, for the patient and the dentist. There's not enough coverage, too many things aren't covered at all, the co-pays are too high, and the limitations are fairly strict. But why is this so?

Well, to tell you the truth, there's really just one reason it's so bad: dental insurance is simply not profitable to insurance companies. Now, why isn't it profitable ... well, there are lots of reasons and speculation for that. I wish I could say "well, it's because of XYZ, and if that gets fixed, it's all sunshine and rainbows" (or fillings and root canals if you prefer). But that's just not so.

However, as a NYC Cosmetic Dentist, I do have a lot of firsthand experience with dental insurance, and can offer you my views on why it's not profitable for insurance companies (and thus, why it's so lousy). Keep in mind that the following are more opinion than anything else. That said, I'm pretty confident many insurance executives -- if asked why dental insurance is bad -- will cite reasons similar to my thoughts in this post.

Dental insurance first started in the mid 60s/early 70's. Delta Dental offered insurance with a $1,000 cap in 1972. And $1,000 bought a lot of dental care in 1972.

Today, the average cap on dental plans is ... $1,000.

Wait ... what? No, you read that right -- it's still $1,000 (on average).

So in about 40 years, the benefit has not gone up. We all like to demonize insurance companies, but in all fairness, they have raised caps on nearly everything except dental insurance. That should tell you something about the business model of dental insurance.

So why isn't offering "good" dental insurance profitable? Here are a few thoughts from me:

• The "use" factor. In plain terms, dental insurance almost always gets used, oftentimes, right up to the max. This is not so with other types of insurance. In fact, the entire profit model of insurance is based on a certain percentage of people not using it. Contributing to this is the built-in "twice yearly" cleanings and such that are recommended.
• Pre-existing conditions. Many dental problems are often ignored for years. So the feeling is that many people will "save up" their problems until they get dental insurance. Then bam - three root canals, two crowns, and a bridge. This happens so often that many dental insurance providers have a waiting period of one year for any major work (and lower caps on maximum coverage). I can tell you from personal experience that I have seen countless patients with a mouthful of problems that really should have been handled earlier, but weren't due to lack of funds.
• Dental problems are more commonplace than many other health problems. There are very, very few people out there with no need for dental work at all. This relates to my first point -- use. Almost all people with dental insurance will use it to a certain degree every year. Conversely, looking at typical health insurance as a comparison, a great number of healthy people will often go years without seeing a doctor.
• The total cost of work is lower, making it difficult for an insurance company to charge a high enough rate to offset the "people using it" factor, but also for the rate to be low enough to be "worth it" to the typical consumer. Put another way, you have health insurance not only for routine doctor visits, but for "catastrophic" events. After all, an operation/hospital stay could bankrupt you. Thus, even at high premiums, health insurance is a must have for most people.

But look at dental work -- really, what's a reasonable "bad" scenario for dental work? $5,000 a year? Ok, let's even double that to $10,000 -- how much premium are you willing to pay to protect against that? I'm going to guess the answer is "not much."

Let's do some expanding on that last point. We can assume because of a fairly low "worst case" dollar number, patients will not be willing to pay all that much for the premium (and rightfully so). But the insurance company knows if they provide coverage, it will get used to a degree (at the very least for twice yearly cleanings/checkups, and yearly x-rays). So to make a profit, they have to charge more than what that will cost, and then also average out what will get used beyond that. Very, very quickly the premium cost will add up to where it's not really worth doing, because the worst case isn't "lose your shirt" territory.

So really, we're all sort of stuck. To provide "full coverage," an insurance company would have to charge more for premiums than a consumer would deem worth spending. So we get this hybrid "this is covered up to that amount/waiting periods/low maximums/no coverage at all" scenario that we're in. Which really helps nobody -- insurance companies don't like it, as a dentist, I don't like it (I don't like being told what I can and cannot do -- heck I could write an entire post on that subject alone), and worst of all, patients don't like it.

There are no easy answers. But at least now you sort of have an inkling as to "why?"

Ok, what say you -- what do you think about this subject?

Until next time, keep smiling.


 

Follow Thomas P. Connelly, D.D.S. on Twitter: www.twitter.com/dr_connelly

Comments

[crom14]

01:20 PM on 04/04/2011

This may be one of the most important articles on the health care debate on THP. Dental issues affect our overall health, heart health and smile. We need this discussion. Thank you.

[jcadams]

05:07 PM on 04/03/2011

Dentists still subscribe to the "greed factor" more than medical doctors. They're in it for the money. Many medical doctors really do believe they have a "calling" to help people. They know they will always make a decent living. Dentists, as a generalization, don't have such a calling. They will provide good service --- but only to those who can pay. And screw the rest. And in the NorCal Bay Area where I live you’ll find a lot of medical doctors who really liked the idea of single payer. I think if you look at the social-political make up of most dentists --- you'll find lots of Republicans who just hate the idea of "Obamacare." That is "'... screw poor people because they don't deserve any minimal level of medical care.'" (“’And screw poor people again because they also don’t deserve any minimal level of dental care.’”) However most dentists will also conveniently forget the fact that they may have gone to a state dental university. And that they may have benefited from “government help” to get their valuable dental degrees and licenses. There is one solution --- open up the dental schools to students who will agree to provide payback for professional school loans with some service to low-cost dental providers. (Actually note that dental schools in some areas appear to have restrictive quotas that will actually limit competition with additional dentists.) I think Dr. Connelly and his ilk will retch at all this!

[Uosdwis]

10:53 AM on 04/03/2011

As Thom Hartmann points out repeatedly, it is go-to-jail ILLEGAL to make profit on basic care medicine in most other countries than America. And being able to eat solid foods is pretty basic. Never mind the esthetics and how it is de riguer in a lot of workplaces to have a decent grille.

[Broadway96]

10:27 AM on 04/03/2011

Im a 30 year old that needs braces bad. But I cant afford $5000 for them. And dental insurance only pays for kids. :-(

[JohnFromCensornati]

01:50 PM on 04/04/2011

"dental insurance only pays for kids"

That is not true. That's a decision your employer made.

[retromega]

09:10 PM on 04/02/2011

Interesting view point, but I think we already knew that Americans think they are entitled, yes even entitled to live forever!

Beyond trying to setting up another multi-million dollar lottery which any one of us can win today and fix every single problem we have, what do Americans do? Well the answer seems crystal clear!

We make sure that NO ONE without $10,000 in their pocket gets teeth they can chew with. No wonder the sales of dog and cat food are reaching new highs! Those hoarders will do it every time!

[Qjersey]

07:54 AM on 04/02/2011

The problem with dental coverage is that it is based on the procedure/surgery model. One hour in the dentists chair for a cleaning, $35; a cavity filling, $50; a root canal, $400. Then there are the charges for crowns. The dentist puts some goop in your mouth to take a mold for 10 minutes and the cost of crown is $700. Really $700 bucks to make a mold and pour porcelain?

[crom14]

01:06 PM on 04/04/2011

My hubby had a root canal that cost $1,000. He has not had the crown put on as that is $1,500. I am a potter and porcelain is very cheap. We also have never had a cleaning that they do not X-ray. I finally said enough. We can no longer take out loans for this stuff.

[ct 63]

11:36 AM on 04/18/2011

"He has not had the crown put on."
Be aware, if your husband is delaying the final crown and still has a temporary filling in the tooth, the root canal will fail. The temporary filling is meant to be just that - temporary...it does not provide a "seal" on the top part of the tooth, and will allow a passageway for bacteria to re-enter the root canal system, thus causing the root canal to fail. A crown or definitive restoration (not temporary) is crucial to the long term success of the root canal.
Yes, it may be expensive - but it will be more expensive to have the root canal fail, have the tooth pulled, and replaced with an implant or bridge.

[Nathaly Macomber]

05:08 PM on 04/01/2011

I had to go back to Peru, where I am from, to get my teeth fixed. Dentists over there aren't millionaires, don't drive porches and have to work very hard to make a buck. On the other hand, only in America you find dentists who are millionaires, own million dollar properties and drive around town in very expensive automobiles, IT MAKES ABSOLUTELY NO SENSE. Let's be realistic, If being a dentist isn't the same as being a cardiologist, why do they have to make that much money????

[VA Jill]

02:20 PM on 04/01/2011

Dental insurance is awful, but it's better than no dental insurance, at least for me. I went for years without seeing a dentist before there was such a thing as dental insurance because I could not afford to see one, period. At least with insurance I could get a couple of cleanings a year and half off fillings, which was better than nothing. Unfortunately I needed, and still need, more work. I still can't afford to have some of it done, because my dental insurance doesn't pay enough, or in some cases doesn't pay at all.

[utags7]

03:02 PM on 04/01/2011

VA Jill, if you need major work, see my earlier post about the great experience I had in going to Hungary and saving over $10,000. I worked through a Minnesota based company called "Hungarian Smiles" that arranges "hassle free" trips there. If you're interested, their website is www.hungariansmiles.com. Good luck to you.

[VA Jill]

10:03 AM on 04/02/2011

If I can't afford the dental work here, how in heck am I supposed to afford a trip to Hungary? Get real, please!

[SinfullySublime]

09:57 AM on 04/01/2011

Insurance of all kinds is false security, only good if you never have a need to claim.

[Last Gasp]

08:51 AM on 04/01/2011

when the republican ideology of privatisation starts to take over the people suffer. its the natural outcome. i see it clearly. i despise republicans. i hate them. i want them imrisoned. why do progressives still talk to them? why try to reason with them? they are the enemy of the people. they should be treated like enemies. they should never be treated witht respect or human dignity.

[jasdmd0]

09:08 AM on 04/01/2011

It's very simple. Because in this country, there aren't enough dems or republicans on their own to be able to pass whatever they want to run the country however they want. So therefore compromise needs to occur. And until BOTH parties realize that they need to work for what's best for the country 1st, instead of what's best for ones political cuacus first, the system will be in gridlock and all we'll hear is complaints from both parties, and even more complaining from the extreme left and extreme right (both being the minority of voters) instead of doing what the more centrist middle (the majority of voters) would like done

[Avery Owen]

06:44 AM on 04/01/2011

Dental insurance is more like going to the doctor with a coupon cut out of the Sunday paper.

[nikhta]

02:05 AM on 04/01/2011

I am a Pasadena, CA dentist and have been in practice for 30 years. Dental insurance is not real insurance. It is a gift from one's employer which offers a certain dollar amount in benefits per year. It makes no sense to purchase it as an indicidual - the premiums are too high. It only makes sense if someone else (an employer) picks up the tab. It doesn't insure against catastrophic situations as does medical insurance so its more like a gift card than a credit card.

By the way, Dr. Connelly made an error - dental insurance began in 1954 (not 1972) with insurance offered to the longshoremen's and other unions on the west coast by an insurer that later changed its named to Delta.

[ahartmann22]

11:26 AM on 04/01/2011

Actually, my husband has an individual plan for $40 a month through Humana. It won't cover any major dental issues until he's had it for 1 year. However, we bought it because his dentist charges $1500 for a crown with no insurance. But if he has Humana's dental insurance, his dentist only charges $650 for a crown because he's an in network provider and has to charge based on Humana's fee schedule. So even though we pay $480 per year for his benefits, it still saves us money because his cleanings are free and we get a hefty discount worth more than we pay for the first year when he needs major services. After the 1st year, he gets 50% paid on his major work. Up to $1500 per year. So it's actually not that bad a deal, especially if you can find a good in-network provider. The problem in our area is that in-network dentists that are reputable are hard to find in-network.

[nikhta]

12:27 PM on 04/01/2011

$1500 seems to be an inflated fee which gives you the impression the insurance is better than it really is. If you only pay $650 for a corwn the insurance is not paying the other $850 (if anything at all), The real fee is much lower than $1500. Your "discount" is not what you think.

[JohnFromCensornati]

12:51 PM on 04/01/2011

Agreed.

[crom14]

01:11 PM on 04/04/2011

So what is the solution here? This is a serious issue. I'm going on three years now of not going to the dentist. I can only chew on one side as I am afraid I'll crack a filling. My husband needs three root canals and crowns. We can no longer go in debt for our teeth.
As a dentist, what solutions do you have for hard working Americans that just can't afford this any longer? I do not want sympathy, I want to solve this.

[nikhta]

01:38 AM on 04/05/2011

If you know the specific services you need shop around. Tell the office what you want and how much you are willing to spend and see if they are willing to see you. There are dentists with too much time on their hands and may be flexible with their fees. The dentist mentioned in one of the preceding posts was willing to do a $1500 crown for $650.

If there is a dental school in your area you can save a lot of money and get excellent care but the work will take a long time. The alternative to root canals is extraction and replacement with a bridge or implants. A removable bridge is the least expensive option and can be used until a better (and more costly) option can be afforded. Dental services have been excluded from medical insurance policies and private insurance is usualy to expensive for what you get.

[POpgrssve]

01:56 AM on 04/01/2011

Well, to tell you the truth, there's really just one reason it's so bad: dental insurance is simply not profitable to insurance companies.

THIS is the cause of our troubles with health care in this country. Profit before care. I have no idea when we'll get it through our thick heads that private companies should not be in charge of determining who gets care and who doesn't. If we were a smart society, we'd adopt a universal health system like every other rational, industrialized nation. But, alas. We not. We'll continue to do what's insanely expensive and morally corrupt.

[JohnFromCensornati]

10:08 AM on 04/01/2011

"dental insurance is simply not profitable to insurance companies"

Exactly! They sell it for the fun of it!

[Spike5]

08:10 AM on 04/03/2011

He means "good" dental insurance wouldn't be profitable. So instead they sell over-priced policies that really aren't cost-effective for the consumer and make a tidy profit.

I pay only $10/mo for my employer-subsidized policy. But between the amount if covers and the deductible, I never break even. I just had a cleaning. The fee charged was $125. MetLife's plan covers $38 for that service, but since I hadn't met my deductible of $40, it paid nothing. So this policy doesn't kick in at all if you only get a cleaning once a year.

It probably would save me money if I went to an in-network dentist who has agreed to their very low negotiated fee. And there is a long list of providers in my area. But when I looked them up, I discovered that they ALL belong to a single chain of low-cost 'factory dentists' with a very poor reputation.

[Spike5]

02:41 PM on 04/04/2011

LOL. So we are just both politely answering each other far into the stage of mutual boredom.

Well, let's at least find a topic more worth our time next time. Global warming? Autism research? Wall Street malfeasance?

Thanks for the conversation, John. Now we can both move on with a smile.

[Katie Loffredo]

12:25 AM on 04/01/2011

The insurance system made sense after WW2 because people (men) tended to have career length jobs from hire to retirement at the same company. The companies were large enough to provide insurance. These large companies have changed shape, moved abroad, and the work force has morphed, become more complex in recent years. The system as it was set up, no longer makes sense. There needs to be more safety provided for more people, so that the stress of health is not tied up so completely with the stress of finding the right job. People are vocationally mobile, they are encouraged to be. The insurance system is not set up to support these changing mores. The federal government should work directly with insurance companies so that its citizens don't have to...

[healthanalyst]

11:41 PM on 03/31/2011

Dental insurance should be folded into regular medical insurance. Why should dentists be broken out? Hopefully if we ever get universal health care, that will be the norm. Think about it, lots of conditions are caused by lack of dental care. Cardiac conditions for one. Systemic infections.Its not just a smile anymore.

[triggeraway]

03:27 PM on 04/01/2011

You're right. Why health insurance covers everything but teeth is absurd. We don't have separate insurance for other body parts.
The health and dental costs would be easier to cover if they were merged.
Even my veterinarian knows that teeth involve my dog's heart health.

[crom14]

01:14 PM on 04/04/2011

This is my worry, for sure. Plus, many suffer in silence, do not smile or worse, seniors in nursing homes have little chance of dental work. ( at least in my area).