Wm.
Donald Tabor Jr., DDS PLC
108 West 20th Street
(W. 20th & Granby)
Norfolk, VA 23517
(757) 622-7544
Dental Insurance Plans and Scams
There are several types of dental insurance and assistance plans, the plans fall into these categories:
Indemnity Plans are the traditional
form of dental insurance. You are free to choose your own dentist without penalty.
The plan pays all or part of the dentist’s fee to the extent that it does not
exceed the Usual, Customary and Reasonable fee, or UCR, for that service.
Insurance companies calculate the UCR in differing ways, but it is usually
between the 50th and 80th percentile fee for the area. A
typical indemnity plan will pay 100% on preventive services, 80% on common
restorative services, and 50% on major treatments such as crowns, prosthetics,
and orthodontics. The payments are usually limited by a yearly maximum payment
and there is sometimes a deductible which the patient must pay before coverage
begins. Most well designed plans do not apply the deductible to preventive
services in order to encourage you to make use of those cost saving services.
PPO’s, Participating (or Preferred)
Provider Plans are similar to indemnity plans in most ways, but patients are
offered financial incentives to select their dentist from a list of dentists
who have entered into an agreement with the insurance company to accept a pre-set
fee. This pre-set fee may be the average for the area or some discounted
amount. The plan may pay a higher percentage or eliminate the deductible when a
participating dentist is chosen to induce patients to select a participating
dentist. Further, the dentist agrees not to charge the patient for any amount
that his normal fee exceeds the pre-set fee. For example, under an indemnity
plan, if a dentist charges $105 for a service covered at 80% and the UCR for
that service is $100, the insurance will pay $80 and the patient is responsible
for the other $25. Under a PPO plan with similar coverage and a pre-set fee of
$100, The insurance would pay $80, the dentist would write off the $5 by which
his fee exceeds the agreed amount, and the patient would be responsible for the
remaining $20.
Table of Allowances Plans pay a fixed
amount for a given service, regardless of the what the dentist charges. The
patient is responsible for the remainder.
DHMO’s or Dental HMO’s are not dental
insurance at all, they are capitation schemes. Under these plans you must
choose a participating dentist to receive benefits. The dentist receives a
small monthly payment for each patient he is assigned. Typically, the patient
is entitled to checkups and cleanings at no charge, but pays a Co-payment for
all other services, which is really just a discounted fee, as the HMO pays
nothing other than the monthly capitation amount. Such plans are not really
insurance at all and are just a marketing gimic. I consider all of these plans
to be fundamentally dishonest and I do not participate in any of them.
Discount Referral Plans are another
form of deception. These plans are commonly “included” in membership in some
organization. The “insurance” pays nothing to the provider at all. Typically,
in return for having patients from the organization referred to his practice,
the dentist provides “free” examinations and gives some percentage discount to
the members. There is no checking of the fees by the plan, so dentists
participating in these plans can simply boost their fee enough to make the
discount meaningless. Again, this is dishonest and I do not particpate in any
of these schemes.
Direct Reimbursement Plans are the
newest entry into dental care cost assistance and hold great promise. The
American Dental Association is promoting these plans and provides information
and assistance to employers in establishing these plans. The insurance
companies are bitterly opposed to them, largely because they eliminate the
insurer altogether. The patient pays for his treatment (many dentists will
accept a post-dated check) and brings the paid receipt to his employer to be
reimbursed in whole or in part. The percentages of reimbursement are based on
the benefits used. A typical plan might pay 100% of the first $200 of dental
expenses, 80% of the next $500 and 50% thereafter until an annual maximum of
$1000 is reached. Because the patient’s share of the expense increases as more
benefits are used, the patient is discouraged from overuse of the benefits and
encouraged to use his shopping skills to get the most for his and his
employer’s money. Any additional cost incurred by allowing the patient to
control his own treatment is more than made up by eliminating the insurance
company’s processing costs and profits. These plans may hold the key to
providing effective dental cost assistance while providing employers with
savings comparable to the managed care scams and maintaining real benefits to
the employees.