Dental Insurance Basics

Only about two out of three Americans have dental insurance plans – 64 percent, according to the American Student Dental Association, although Consumer Reports puts it at just one in four Americans. That’s a lot of potentially untreated toothaches.

This type of insurance for dental treatment is almost a luxury in tough economic times, at least if options for coverage aren't provided by your employer. But that might not matter to you if you’re reading this with an icepack pressed to your jaw, wondering what you can do for next time. You want to know how this type of policy works, and exactly what dental benefits you get for your money.

Dental insurance is similar to other health policies in several ways. You pay a monthly premium and your insurer will pay for at least some of your care when you need it. No insurer is going to pay for 100 percent of your dental costs. Deductibles almost always apply, so if you had insurance and decided to see a dentist about that tooth, you could plan on contributing a few of your own dollars to the cost.

This rule doesn’t always apply to preventive care or diagnostic procedures like x-rays, however. You might not have had to pay for these preventive services if you had seen a dentist before your tooth began aching, or if the dentist just tells you what’s wrong but you decide not to have the problem remedied. And it’s often a yearly deductible, so you’re off the hook for eleven months if you pay one for care in January and it meets the annual deductible requirement.

​Read More:​ What to Do If You Can't Afford Your Insurance Deductible

Many dental insurance plans also require coinsurance or copayments – either in lieu of or in addition to that deductible. The insurance company might pay for ​80 percent​ of your treatment, but that other 20 percent is an out of pocket cost for you. The portion you're responsible for paying can increase to as much as ​50 percent​ for major procedures like root canals and crowns.

These general rules can vary by type of plan, and there are several plans out there to choose from. Some are more common than others.

An indemnity plan is the traditional version of dental insurance. You get to pick your own dentist, and you’ll be subject to those deductibles and copays. The total amount that an insurer will pay for certain procedures might also be capped at a maximum. You’ll have to come out of pocket for any balance over this amount.

A preferred provider organization, or dental PPO plan, restricts your care to dentists who contract with the insurance company. The majority of dental plans – more than ​80 percent​ – fall into this category. Some indemnity plans work hand-in-hand with this type of setup.

​Read More:​ Pros and Cons of PPO Insurance Programs

A dental health maintenance organization is effectively an HMO for dental care (DHMO). It’s similar to a PPO in that you’re restricted to a certain network of dentists, but in this case, you’re assigned to one and the insurer pays them a certain amount each month to take care of you. Less than ​10 percent​ of policies fall into this category.

These plans are just the tip of the iceberg. There are numerous plans, so do your research into each product you're considering if you're buying coverage.

Dental insurers tend to be a bit stingy with coverage in other ways as well, imposing numerous restrictions.

Many cap treatments at an “annual maximum.” You might suffer some type of calamity or require ongoing care. You run up $5,000 in dental care costs. You’ll be personally responsible for $3,500 of that if your plan’s annual maximum is ​$1,500​. Some caps are even lower at ​$1,000​. If there’s any good news here, it’s that these maximums are usually assigned per family member. It’s not $1,500 for you, your spouse and your two children collectively. Orthodontics and braces sometimes have their own separate caps.

Insurers don't want to pay out any more than they absolutely have to. They’re in business to make money, after all, and that requires that the premiums paid to them exceed the dollar amount they pay out. Another common limitation is that your toothache might not be covered if it was festering due to some condition that existed before you bought your plan. And you’re probably not going to be eligible for coverage right away when you begin paying premiums. Some insurers have waiting periods, depending on the type of work you want to have done, that can range from 30 days for basic procedures and checkups or up to six months.

Some dental policies also apply exclusions – there are some types of dental procedures that they simply won’t cover. For example, you’re most likely stuck with a metal filling, not one of those nice composite ones that match the color of your tooth, unless you want to pay for it yourself. Insurers might also limit how many of the same types of care can qualify for coverage in a given year. You might only be covered for one cleaning per year or every six months. Sealants and fluoride treatments may be included, or they might be fee-for-service. Especially if you have a discount plan, check before you say yes. As for your child’s braces, you'll probably need a separate policy or rider for that work.

Consumer Reports has gone on record stating that this type of insurance is not known for being cost-effective. It urges consumers to give it some serious thought before buying a policy if it’s not provided through your job. Employer-subsidized plans are generally the most affordable.

They indicated in 2019 that you’ll pay anywhere from $20 to $80 a month for insurance coverage if you must buy your own policy, and that will only protect you up to perhaps $2,000 in dental costs. Do the math: You could pay $960 a year, in exchange for $1,040 in cost-free, covered care – that $2,000 less the cost of your premiums which you could have otherwise paid to a dentist directly. And that’s without considering any deductibles or co-pays. It’s a costly proposition if you don’t normally need a lot of dental work each year.

Your child up to age 21 is probably covered if they’re eligible for CHIP benefits ­– the Children’s Health Insurance Program. All states extend dental coverage to these children and to those who receive Medicaid. It’s much iffier for adults, however, and it can vary by state program. Medicare doesn’t cover dental care unless you purchase a private Advantage plan, and this might require paying an extra premium.

​Read More:​ The Disadvantages of Medicare Advantage Plans

So what if you decide to skip this type of insurance policy? You have a few other options.

You might simply tuck that $80 or $100 a month aside in a special, dedicated savings account. The money will be there waiting for you and should cover most of the expense if you normally just need routine care. The federal government even provides a couple of tax-advantaged savings options that cover all sorts of medical care: flexible spending and health savings accounts. These come with requirements, of course, but you basically put some money here and it will grow tax-free, assuming you make withdrawals for medical – and dental – needs.

​Read More:​ How to Set Up a Flexible Spending Account

Or you might invest in a dental savings account. Put your money here and receive dental services by covered practitioners at discounted costs. You can leave the insurance companies out of the transaction.

You might also seek care from a dental school rather than a dentist. Don’t worry, the students’ work is monitored and overseen by professionals, but you’ll pay significantly less for their services.