Dental Plans in Practice

A dental plan pays less of the bill as the work gets more expensive. Preventive care is covered almost completely, repair work is covered mostly, and crowns, bridges and braces are covered in part, if at all. A producer who can run one patient’s year through the plan can explain why a “covered” procedure still produces a bill. Names and figures in the examples are invented.

How the Plan Divides the Bill

Most dental plans sort procedures into tiers and pay a different percentage of each.

Tier	Typical procedures	Typical plan share
Diagnostic and preventive	Exams, cleanings, bitewing x-rays, fluoride	Highest, often 100% and often with the deductible waived
Basic	Fillings, simple extractions, root canals, periodontal treatment in many plans	Middle, often 80%
Major	Crowns, bridges, dentures, implants in plans that cover them	Lowest of the three, often 50%
Orthodontics	Braces and related treatment	Separate percentage, usually a separate lifetime maximum, often limited to children

Where a procedure sits varies by plan. Root canals and periodontal care are basic in one plan and major in another, so the producer reads the plan’s own list. The percentages, the deductible and the annual maximum are the numbers that decide a claim. Many plans apply the deductible to basic and major care but not to preventive care, and most cap what the plan pays in a benefit year.

What the Plan Pays On

The plan applies its percentage to an allowed amount, not to the dentist’s bill. For an out-of-network dentist that is usually the usual, customary and reasonable (UCR) charge, meaning what dentists in the area typically charge for the procedure. The dentist may bill the patient for the difference. A network dentist has agreed to a lower fee schedule and generally may not bill the patient the difference on covered services.

A Year Through the Plan

Lena’s plan has a $50 annual deductible that does not apply to preventive care, pays 100% of preventive, 80% of basic and 50% of major, and has a $1,500 annual maximum. She sees an out-of-network dentist three times.

Visit	Dentist’s charge	Allowed (UCR)	Tier	Plan pays	Lena pays
Exam and cleaning	$140	$140	Preventive	$140	$0
Filling	$200	$180	Basic	$104	$96
Crown	$1,300	$1,100	Major	$550	$750
Total	$1,640			$794	$846

The filling shows the order of operations. The $50 deductible comes off the allowed $180, leaving $130. The plan pays 80% of $130, or $104. Lena pays the $50 deductible, 20% of $130, which is $26, and the $20 by which the dentist’s charge exceeds the allowed amount: $50 + $26 + $20 is $96. The crown works without a deductible because the deductible was already met. The plan pays 50% of $1,100, or $550, and Lena pays the other $550 and the $200 over the allowed amount, a total of $750.

The plan has paid $794 against a $1,500 maximum, so $706 remains. An in-network dentist at the same allowed amounts would have lowered Lena’s share by the $20 and $200 balances.

Limits, Waiting Periods and Exclusions

The tiers are only part of what a plan decides.

• Frequency limits. Cleanings and exams are commonly covered twice in a benefit year. A third cleaning is paid by the patient.
• Waiting periods. A new enrollee may have to wait before major services, or orthodontics, are covered. If Lena had enrolled three months ago, a plan with a 12-month waiting period for major services would pay nothing toward the crown. This discourages the buyer who joins when treatment is already needed.
• Missing tooth and replacement limits. A plan may decline to pay to replace a tooth lost before coverage began, and may pay for a replacement denture or bridge only once in a stated number of years.
• Alternate benefit. When two treatments would both fix the problem, many plans pay on the less expensive one. A patient who chooses a crown where a filling would do may get the filling’s benefit applied toward the crown.
• Exclusions. Cosmetic procedures, experimental treatment and services covered by workers’ compensation are commonly excluded.

Predetermination

Predetermination of benefits, sometimes called a pretreatment estimate, lets the dentist submit a treatment plan before the work begins. The insurer returns what it expects to pay, the patient’s share and any limit that applies. For Lena’s crown it would show the estimated $550. A predetermination is an estimate, not a promise to pay: it is subject to eligibility on the date of service and to the maximum still remaining. It is worth requesting for any major work.

Combination Plans and Michigan Rules

Dental coverage is sold in three arrangements. It may be a rider on a medical plan, in which case the deductible or out-of-pocket limits must be set separately from the medical coverage. It may be integrated, with a single deductible covering medical and dental. Or it may be a separate stand-alone policy with its own deductible and maximum. A prepaid dental plan operates like a health maintenance organization: the patient uses contracted dentists, pays set copayments, and the provider is paid by capitation.

Three Michigan rules affect how these plans work.

• Michigan bars preexisting condition exclusions in a health insurance policy, but the prohibition does not apply to stand-alone dental plans (MCL 500.3406ii(1), (2)(b)(x)). That section therefore does not stop a stand-alone dental plan from declining to pay for a condition that existed before coverage began, such as a tooth already missing, which a medical plan could not do.
• An insurer that issues an individual or small group health insurance policy must cover pediatric oral and vision care. The requirement does not apply if the insured has dental insurance from another source and provides evidence of the coverage (MCL 500.3406bb(1)(j)).
• When a policy providing pediatric dental benefits covers members of a family, it must make coverage available to a dependent child at least until the child turns 19 (MCL 500.3402(c)).

Lesson summary

• Dental plans sort procedures into preventive, basic, major and orthodontic tiers, each paid at a different percentage.
• The plan applies its percentage to the allowed amount, usually the UCR charge, and an out-of-network dentist may bill the patient the difference.
• Work a claim in order: find the allowed amount, subtract any deductible, apply the tier percentage, add the balance billed, and check the annual maximum.
• Frequency limits, waiting periods, missing tooth clauses, alternate benefits and exclusions can reduce or eliminate benefits for a procedure the plan lists.
• Predetermination gives an estimate before major work but does not guarantee payment.
• Dental coverage may be a medical rider, an integrated benefit with one deductible, a stand-alone policy, or a prepaid capitated plan.
• Michigan’s ban on preexisting condition exclusions does not reach stand-alone dental plans, and a family policy providing pediatric dental benefits must make coverage available to a dependent child at least to age 19 (MCL 500.3406ii(2)(b)(x); MCL 500.3402(c)).