Dental Insurance

Dental insurance is generally sold on a group basis, due to adverse selection. Insurers are reluctant to write individual dental coverage because a person in need of dental work can often postpone treatment until an insurance plan becomes effective, causing the insurer to be liable for larger benefits than it would otherwise expect to pay.

Dental plans base benefits on UCR (usual, customary, and reasonable) charges. Charges in excess of this limit are the insured’s responsibility and are subject to deductibles and co-insurance. Occasionally, dental insurance is part of a health benefits package with a single deductible called an integrated deductible, applying to both medical and dental coverage. More often, dental coverage is provided through a separate policy with its own deductible.

In addition to deductibles and co-insurance, maximums may also affect the level of benefits payable under a dental plan. Generally, there is a specified maximum dollar amount payable per year, per procedure, and sometimes per family member covered. There may also be a lifetime maximum per individual.

Some dental policies are scheduled (basic) and only cover such things as:

• Routine visits to the dentist
• Protective fluoride treatments
• Diagnostic x-rays
• Dental exams and diagnosis
• Local anesthetics
• Teeth cleanings (usually once every 6 months)
• Preventive care

Most dental policies, however, are comprehensive and work much the same way as comprehensive medical expense coverage. Dental procedures covered by most comprehensive policies include:

• Restorative

Repairing or restoring dental work that has been damaged in some way

• Endodontics

Treatment of the pulp (root canals)

• Periodontics

Treatment of the supporting structures of the teeth

• Prosthodontics

Artificial replacements and bridge work

• Oral pathology

Microscopic analysis of tissue biopsy for diagnosis of oral diseases including oral cancer

• Orthodontics

Correction of irregularities of the teeth (braces)

Prepaid Dental Plans

In a prepaid dental plan, a corporation, partnership, or other entity provides or arranges for the provision of dental care services to enrollees or subscribers. Prepaid dental plans operate in much the same way as health maintenance organizations. They offer services based on capitation or fixed per-member, per-month payments, where the provider assumes the full risk for the cost of contracted services without regard to the type, value, or frequency of the services provided.

Lesson Summary

Dental insurance is primarily sold on a group basis due to adverse selection, where insurers are hesitant to offer individual dental coverage, to prevent individuals from postponing treatment until the policy is active. These dental plans base benefits on UCR charges, with any excess being the insured’s responsibility, and subject to deductibles and coinsurance. Additionally:

• Dental insurance may be part of a health benefits package with an integrated deductible for medical and dental coverage, or have a separate policy with its own deductible.
• Maximums may also apply, with a specified dollar amount payable per year, per family member, or a lifetime maximum per individual.

Some dental policies are scheduled (basic) and cover routine visits, cleanings, and preventive care, while comprehensive policies cover a range of dental procedures like endodontics, periodontics, prosthodontics, and orthodontics. Nearly all plans cover 100% of routine cleanings and checkups. Prepaid dental plans operate akin to health maintenance organizations, offering services based on capitation, where the provider assumes full financial risk for contracted services regardless of type or frequency. They are structured as follows:

• In prepaid dental plans, a corporation or entity provides or arranges dental services.
• Services are based on capitation or fixed payments per member per month.
• The provider assumes the full financial risk for contracted services.

Chapter Vocabulary