Dental Insurance Madness- Part III

Apr 13 2014

Dental Insurance Madness- Part III

In the last two parts, we talked about the basics of dental insurance. I’m definitely ready to move on with another topic but as promised and per the request of many, this last post will get into some details on the costs associated with dental procedures and what your insurance can do for you.

dental insurance moneyIts often been said that medical providers over inflate their prices and never expect to get paid what they bill out anyways… begs the question, how do dental providers determine their fees? Here’s how:

Systematic monitoring and surveying of dental practices is being done by companies such as National Dental Advisory Service and actual UCR fees (explained in previous post) in use are compiled based on zip code. The published self reported fees are set by the supply and demand of the market and the report shows their yearly fluctuation pending economic factors. This data is used by new and existing dental practices to set and adjust their fees to get them inline with their geographic competitors.  And yes, they actually consider these fees standard for their area. Also, federal law prohibits any organization or group of dentists from conspiring to set fees or monopolizing dental services.

So, if dentists aren’t just arbitrarily charging crazy-high fees, why is dental care “so expensive”?

This topic has been visited several times and quality dentistry is actually very expensive for many reasons beyond the control of the dentist and many of these reasons have been stated by others who have spent the time to investigate it. But to summarize, a quality dental practice, even when run very efficiently, still has a 60% over-head. In other words, the significant majority of fees charged for a procedure really goes into covering the cost of that procedure such as laboratory fee, rent, staffing, equipment…etc. Cutting cost by, for example, sending off your crown to china to have it fabricated at a fraction of the cost, or cutting corners to save time so that a doctor can see more patients in a typical day could improve the overhead to profit ratio, but the quality of care and ultimately the patient will suffer.

So what other big things might you need to know about how a dental insurance carrier may misrepresent their product?

The ever so sneaky “fee schedule” or “maximum allowable fee” scheme is a big one for sure. More and more dental insurances are selling their product as PPO, which means you pay a higher premium than an HMO policy, but in return, you can choose your own provider, as long as that dentist is willing to work with that insurance. At time of purchase, the insurance company will say that they cover certain things (for example cleanings, check ups, and xrays) at a 100%. But when you go to your dentist to use your benefit, you realize that you have a patient portion to pay for these same services. How is that possible? Is your dental office overcharging you? Most likely, you are victim to this “fee schedule” or “maximum allowable fee” insurance company scheme. You see, though the insurance company sells their product as 100% coverage, they actually will cover 100% of their own “fee schedule” or “maximum allowable fee” and they make you responsible for the difference. These fee schedules uses are often well below the market fees for your area and the insurance company simply does not care and will not be able to explain why they pay out at the fee that is so much below Usual and Customary Reimbursement rates. I may give you some real life experience and numbers on what these policies really payout in a future post.

In short, be aware that dental insurance is a very different beast than medical insurance. The coverage you are offered should be investigated well to make sure that at minimum, your policy would not cost you more than they would pay out. That said, there are good dental policies (typically offered by large employers), and they make oral health possible for many Americans. You just want to make sure yours does not end up being a junk policy.

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