UBP blog

07/15/2009

Waiting periods, a major pain with traditional dental insurance

When you enroll in a traditional dental insurance plan, they tell you that your coverage begins the first day of the month after your application is processed. What this technically means is that your coverage for diagnostic and preventative dental care (procedures such as oral exams, cleanings and x-rays) begins the first day of the month after your application is processed. For everything else, you need to wait.

Traditional dental plans have a six-month waiting period on Type 2 services and a twelve-month waiting period on Type 3 services. This means that you need to wait six months before your plan’s coverage for fillings and root canal treatments kick in and twelve months before treatments such as dentures, bridges and crowns are covered.

Despite the waiting periods, plan members start paying premiums on the effective date of their plan, and for many plans, members pay more than the cost of a Type 2 or 3 procedure in premiums before the procedure is even covered.

For example, getting your cavities filled is a Type 2 procedure. The average cost of having 2 cavities filled is $135. But, before the typical dental insurance plan will cover this procedure, plan members must pay on average $288 in premiums (more than double the cost of the procedure).

Universal Dental Plan, a discount dental savings plan and alternative to traditional dental insurance, has no waiting period for this or any procedure. When an individual member of Universal Dental Plan has two cavities that need to be filled, he or she will have immediate access to the discounted rate of $102 with only the added cost of the $9.95 monthly membership fees.

So, if the member of a traditional dental plan opts to have his or her cavities filled in the first month of plan membership (before Type 2 coverage kicks in), here is what they will end up paying that month for dental services:

Cost of filling two cavities $135
Premium Cost $48
Total Cost $183

If they wait until the Type 2 coverage kicks in, here is the total amount of money that they would pay, just to have coverage for this procedure (this is provided that the cavities left unfilled did not worsen to a condition that’s more costly to treat).

Cost of filling two cavities $27 (with carrier covering 80%)
Premium Cost (for 6 months) $288
Total Cost $315

And here is what a Universal Dental Plan member would pay:

Cost of filling two cavities $102
Monthly membership cost $9.95
Total Cost $111.95

How much would you rather pay to have your cavities filled $315, $183 or $111.95? Twenty to fifty percent discounted rates on procedures and no waiting periods clearly remove the pain of dental insurance costs. To learn more about Universal Dental Plan, visit our website, www.universaldentalplan.com.

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With traditional dental insurance, you get what you pay for

One thing people don’t realize about traditional dental insurance is that enrolling in a plan with lower premium costs could (and in most cases does) mean higher out-of-pocket expenses on dental procedures.

For example, one dental insurance plan may charge an individual $40 per-month in premiums and pay 50% coinsurance on all Type 3 or Major Restorative procedures. Another plan may charge an individual $48 per-month and pay 50% coinsurance on all Type 3 procedures.

The first plan may look like the most attractive one at first glance, before one major, often overlooked piece of information is even considered. If a dental insurance carrier pays a coinsurance of 50% on a Major Restorative procedure, does that mean they’re paying 50% of what the dentist charges for the procedure? In most cases, the answer is NO.

Insurance carriers determine how much they will pay on a dental claim by first looking at your company’s zip code and then determining what each dentist in the area charges for the procedure. They give each of the dentists’ fees a percentile rank and determine their coinsurance payment based on a chosen percentile. One carrier may base the cost they cover on the rates charged by a dentist in the 70th percentile, another might base it on what a dentist in the 90th percentile charges.

Knowing that a dental plan pays 50% coinsurance tells you very little. You need to know more information than this for a meaningful comparison of plan costs.

Do you know what percentile your plan carrier is using as their benchmark for paying dentists? It is important to know this when evaluating dental plans because lower premiums usually mean lower percentile pay outs and lower percentile pay outs mean your employees will pay more out of pocket when they visit the dentist.

In light of the current economy, we offer our clients free membership to Universal Dental Plan, a discount dental savings plan and alternative to dental insurance. Visit UDP’s website, http://www.universaldentalplan.com to learn more about the plan and call us to see if your company qualifies.

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