How to Avoid Hidden Costs in Your Dental Care Plan

When we use the term, “hidden costs” you might think of some shady used car salesman trying to sneak something past you, or a high pressure timeshare presentation where they want you to sign the contract before you have all the facts.

When it comes to dental insurance, that’s not the problem. In fact, dental insurance plans are generally very well documented and do a sufficient job outlining all the various out-of-pocket costs you can expect to pay by using the plan. The trouble — and the root cause of many of the “hidden costs” members complain about — lies within not fully researching or understanding the dental coverage, leading some to be taken off guard by an unexpected expense.

The cost of dental insurance

The following are important terms to be aware of as you’re either researching new dental coverage for the upcoming year, or reading through the documentation for coverage you already have. With a solid understanding of these terms and how they apply to your specific coverage, you should be able to eliminate the misunderstandings that lead to costly surprises.

1. Premiums - Your insurance premium is the amount you’re required to pay to secure coverage. If you’re receiving dental insurance through an employer, your employer may be covering part of this amount, but if you’re responsible for some or all of the premium cost, you should see it coming out of your paycheck. If you have private insurance, you’re probably paying your premium monthly via automatic transfer from your checking account.
2. Deductible - Your deductible is the total amount you’re expected to pay toward covered dental expenses before your insurance begins paying. Generally, the higher the deductible, the lower the premiums. Often, routine services like your semi-annual cleaning and examination are covered without applying to the deductible, but not always. Usually, the deductible amount is different for an individual and a family. Once you’ve paid your full deductible amount out of pocket, any further dental care expenses will be covered according to the plan guidelines.
3. Copay - Your copay is a set amount you’re required to pay to the provider at the time of services. It’s usually a fairly small amount, such as $10 or $25, but some plans require higher copays for more advanced procedures including emergency care. Generally, the higher the copay, the lower the monthly premiums. In most cases, you’re still responsible for your copay whether you’ve reached your deductible or not.
4. Coinsurance - Coinsurance is the portion of a covered expense you are responsible to pay out-of-pocket. It’s often expressed in a percent ratio such as “80/20” or “70/30.” Commonly, coinsurance guidelines will apply to advanced dental services such as restorative work (crowns, bridges), oral surgery (advanced extractions), and orthodontics (braces or retainers). So, for example, 80/20 coinsurance on your $1000 bridge work means that the insurance will pay $800 (80 percent of the bill) and you’re responsible for the remaining $200 (20 percent of the bill).
5. Maximum out-of-pocket expense - This figure is the highest amount you’ll be required to pay out of pocket toward your (or your entire family’s) dental care for the year as a member of your plan. This places a ceiling on the total you can expect to pay when adding together copays, deductibles, and coinsurance. It is not included in every plan.
6. Maximum benefit - This figure is the highest amount the plan will pay toward your (or your family’s) dental services during the plan year. Generally, the higher this amount, the higher all your other costs will be, including your premiums.

Common misunderstandings that will cost you

If you review the benefit descriptions for any dental care plan, you’ll likely find most (if not all) of the above included with clear dollar amounts and/or percentages listed. There really aren’t any “hidden costs” involved. However, as noted above, misunderstanding or failing to accurately calculate what all these factors mean in real-world situations is what leads to unexpected expense and frustration.

Here are some of the most common misunderstandings dental patients run into:

1. Assuming full coverage begins immediately - If you choose a plan that states “Preventive care is covered at 100 percent” you may feel justified in expecting that when you make your first appointment for a cleaning in January, you’re not going to be charged anything for the visit. But, look again at the fine print: does that 100 percent coverage start after you reach your deductible? Is there any sort of waiting period before the coverage begins? If so, you may end up paying in full for that visit.
2. Assuming all dental services are covered - Even the most liberal of plans will usually have limitations when it comes to what’s considered a covered dental care service and what’s either considered medical (and, therefore needs to be handled through your medical insurance,) or “not medically necessary” and, therefore, not covered.) A common example is coverage toward braces or similar appliances for adjusting alignment and bite. While most plans offer a coinsurance arrangement to cover some of the cost of orthodontics for children, adult braces are often considered strictly cosmetic and are not covered at all.
3. Assuming coverage is available at any dentist - Nearly all dental plans require that you visit an “in-network” or “participating” dentist to receive the maximum plan benefits. Some plans have reimbursement or coinsurance arrangements set up to cover services outside the network, but your out-of-pocket expense will almost always be higher in that circumstance. And, if reimbursement is the only option, you’ll need to pay in full at the time of services and submit your own claim to the insurance for reimbursement, which can take several weeks.

How to choose the best dental care plan

If you’re analyzing various dental care plans and trying to decide on the best one for you and your family, here’s a simple way to compare them head-to-head:

Cost of Premiums + Max Out-of-pocket expense = Worst Case Scenario

This simple formula will provide you the very most you can possibly spend on each plan over the course of the year. With that figure in hand, you can do two important things to help make your decision:

1. Consider your normal dental plan usage
2. Research out-of-pocket cost at local dentists

If you or your family tends to have excellent oral health and almost never requires anything more than their two standard cleanings and exams, plus perhaps one small filling each in a year, you’ll likely find that paying out of pocket for services costs less than paying for a dental care insurance plan and meeting the copay and deductible requirements so the plan can begin covering services for you.

On the other hand, if you or your family need extensive dental care within the next year and the plan covers even a portion of it, you may very well find that the total cost of the plan is still far less than what you would pay for the services you need without insurance.

It’s important to take the time to research the out-of-pocket cost for various services at local dentists’ offices so you can make a fair comparison of all these figures. Keep in mind, too, that many dentists are willing to offer discounted prices or financing to uninsured patients, which can have an impact on the total cost as well.

Optimizing your care with a dental discount plan

One other factor to consider as you’re making your decision is the opportunity to join a dental discount plan. These membership plans can provide up to 50 percent off the out-of-pocket cost of most dental services if you visit a participating dentist.

These programs are not insurance, so most of the limitations described above will not apply to a discount plan. 

Remember, dental insurers are not out to fool you or perform any sort of “bait and switch.” In fact, it’s to their benefit for you to fully understand your plan and use it to the fullest, because that’s how they earn satisfied repeat customers and keep their businesses afloat. However, there are plenty of opportunities for misunderstandings and oversights to lead to unexpected expense when getting services through dental insurance.

Do your due diligence and be prepared to avoid “hidden costs” in your dental care plan.