What are the different types of dental benefits products?
There are four key types of dental benefit products with significant market shares today, i.e., dental HMOs, dental PPOs, dental Indemnity plans, and discount dental plans. Today 77% of all dental policies are DPPOs. A common set of definitions is helpful in seeking dental benefits coverage. The terms we use are defined below:
- Dental HMOs—refers to dental benefit plans that provide comprehensive dental benefits to a defined population of enrollees in exchange for a fixed monthly premium and pays for general dentistry services primarily under capitation arrangements with a contracted network of dentists. Enrollees must use network dentists to obtain coverage except where a point of service provision allows them to opt out of the network but at reduced coverage.
- Dental PPOs—refers to dental benefit plans that have contracts with providers for the express purpose of obtaining a discount from overall fees. Enrollees receive value from these discounts when using contracted providers but may go outside the network of discounted providers but with a reduction in coverage. Providers are reimbursed on a fee-for-service basis after care is provided at either the discounted rate or the “ucr” (usual, customary, reasonable) rate recognized by the plan. Individuals are not balance billed for the difference between the negotiated fee and the actual fee that the dentist charges. Dental Indemnity Plans — refers to benefit plans where the risk for claims incurred is transferred from employer to a third party insurer for a specified premium and providers are reimbursed on a fee-for-service basis and there are no discounted provider contract arrangements whereby the provider agrees to accept a fee below their customary fee.
- Discount Dental Plans—refers to non-insured programs in which a panel of dentists agrees to perform services for enrollees at a specified discounted price, or discount off their usual charge. No payment is made by the referral plan to the dentists; dentists are paid the negotiated fee directly by the enrollee. These plans are sometimes referred to as “access plans” or “discount plans.”
What do dental plans normally cover?
There are seven basic areas of dental care that policies cover. With individual policies, often only the first four will be covered in the initial year of a policy with the last two available in later years. Orthodontics is usually a rider for both individual and group policies that can be selected when relevant.
- Preventive Care—i.e., cleaning, routine office visits
- Restorative Care—i.e., fillings and crowns;
- Endodontics—i.e., root canals;
- Oral Surgery—tooth removal and minor surgical procedures such as tissue biopsy and drainage of minor oral infections;
- Orthodontics—retainers, braces, etc.
- Periodontics—scaling, root planning and management of acute infections or lesions; and
- Prosthodontics—dentures and bridges.
Dental benefits overcome consumers’ top concern about getting the care they need—cost. The seven types of procedures are broken into three areas of coverage for payment purposes, i.e. preventive, basic and major.
Most plans cover 100% of preventive care and apply co-payments, either as a dollar amount (DHMOs) or as a percentage (DPPOs and Dental Indemnity/ or Traditional Insurance) to other levels of care. Preventative care usually includes periodic oral evaluations, x-rays and sealants. (NOTE: Sealants may be limited to certain age groups.)
Basic procedures, i.e., office visits, extractions, fillings, root canals, and periodontal treatment for gum disease, are typically covered at a lower percentage amount, for instance 80% (sometimes 60%), or with lower dollar co-payments in the case of a DHMO.
Major procedures, i.e., crowns, bridges, inlays, and dentures are usually covered at the lowest percentage, such as 50% or a higher dollar co-payment in the case of a DHMO. Root canals are also sometimes covered in this category rather than as a Basic procedure, so check your coverage. Some carriers now offer coverage for implants under this category of coverage.
Most dental PPO and Indemnity plans have a median deductible of $50 and a maximum annual benefit of $1,000 to $1500. Some carriers now offer policies that roll some portion of an unused annual maximum over until the next year. Other levels of annual maximums may be available. However, only 3% of Americans (NADP Premium Trends Report, 2010) with dental benefits use their annual maximums. This is a factor that should be weighed against the premium cost for higher annual limits.
Do public programs like Medicaid and Medicare cover dental care?
Medicaid covers comprehensive dental care for children through the Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit, which federal law requires all states to provide to children up to 21 years of age. In 2009 a new requirement to provide dental coverage was also added to the Children’s Health Insurance Program that also allows a family to buy just dental coverage for their children up to 19 years of age if the family has medical coverage but no dental coverage. States are not required to provide adult dental services under Medicaid.
Medicare does not cover dental procedures.
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