The Dental Consumer

Consumer Directed, Employer Sponsored Group Dental Plan

2011-03-08T18:17:00Z

Looking for a lower cost alternative to your group dental plan? Consider this example of how a Consumer Directed, Employer Sponsored Group Dental Plan works.

In 2000 business was booming for the American Manufacturing Company of Ohio and John, the owner, decided to add dental insurance to his employee benefits program. The plan he selected covered preventive care (2 cleanings and exams and I set of x-rays per year) at 100% and, after a $50 deductible, covered basic services at 80% and major services at 50%. The premiums were $25/month for an employee and $60/month for a family. John said he would pay the single rate for everybody and those employees who wanted to add family members would pay the difference. The plan was extremely popular with his 100 employees and, with annual increases of only 5%, John kept paying the single rate. With the economic downturn over the past few years, however, times have been tough for the ABC Manufacturing company so last year, in 2010 when the single rate for the dental plan hit $40, John surveyed his employees to see if they would be willing to contribute $15/month each to the plan which would bring the company cost back down to $25/employee.   Only half of the employees said they would be willing to do that so, in order to keep the plan, John had to continue paying the $40 because the dental insurance company required a minimum of 75% employee participation.   The premium for family employees had also increased over the years to $100/month so even with John’s $40 contribution, the cost for an employee to have family coverage was $60/month and several employees had dropped their families out of the plan. John recently received his 2011 renewal rates, an 8% increase taking the single rate to $43 and the family rate to $108. The company can no longer afford the premiums and John seriously faces the possibility of having to cancel the dental insurance. Rather that give up on an important employee benefit, John instead elected to switch from dental insurance to a consumer directed, employer sponsored dental plan.

First, he selected a dental network to contract with. He chose the Careington Plan because they had a huge network of over 64,000 dentists (over 40% of all the dentists in America) and, as such, commanded discounts in the range of 50% to over 70%. He also liked the fact that they gave specific amounts (fee schedule) that an employee would pay for each procedure. John’s cost was $7/month/single employee to “rent” the network and he then set an allowance for each employee of $13/month ($156/year) that an employee could draw on to pay for the out of pocket expenses because that amount provided more than enough to pay for two visits per year. Here is the breakdown of costs the employee would pay, ADA codes in parenthesis:

    Visit#1: Comprehensive exam (0150) $18, adult cleaning (1110) $29, full series x-rays (0210) $40
    Visit#2: Periodic exam (0120) $14, adult cleaning (1110) $29
    Total annual cost: $130

Each employee then had an additional $26/year ($156 allowance minus $130) that would be available if additional dental work were needed.

Originally willing to spend $25/month per employee and the new plan only costing him $20/month ($7 premium plus $13 allowance) John decided to further help out the employees that had families. He chose to pay the $16/month family network costs and give families a $14/month allowance, meaning that employees with families would cost the company $30/month. This pretty much averaged out to the affordable $25/employee in his budget. Employees with families had previously been contributing $60/month, or $720/year for a plan that covered two visits in full. There would be no payroll deduction for premiums with the new plan, but families would have out of pocket costs. As shown above, the annual cost for an adult with the Careington plan is $130. A child’s cleaning with Careington is only $21, so the annual cost for a child is $114/year. A family of 2 adults and 2 children, then, would have annual costs of $488. The company is contributing $168/year ($14/month), so the net cost to a family would be $320/year, a savings of $400 to the employee over the old dental insurance plan.

John also wanted to make sure that dental procedures beyond cleanings were also going to be affordable. He first looked at a basic service, a simple filling, ADA Code 2140. The Careington fee schedule cost was $40, a discount of about 70%. The dental insurance plan would have paid 80% after a $50 deductible, so John felt this was pretty equitable.

The group dental insurance would have paid 50% for a root canal. For ADA Code 3310, anterior root canal, a Careington member pays $272, a discount of about 60%.

A Careington member pays $428 for ADA 2750, porcelain fused to metal crown, a discount of over 50%. The dental insurance would have paid 50% for the cost of a crown.

The only potential downside John could see with switching to the Careington plan was that the employees are required to use the network dentists. Some employees would certainly complain. The equitable solution was to present it to his employees as a Consumer Driven Plan. For anyone who chose to opt out of the Careington plan the American Manufacturing Company would provide each single employee with $240/year ($20/month), $360/year ($30/month) for each employee with a family, to draw on against any dental expenses they incurred at any dentist. Employees had complete freedom to go to a non-network dentist and pay retail or go to a plan dentist and take advantage of the buying power of the network. It was their choice as consumers of services versus purchasers of insurance.

Contact Ronald Haines at 216.539.0589 or send email to ronald@dentalplanguy.com

Does your dentist belong to a network?

2011-03-02T19:10:00Z

Are you paying retail prices for your dentist visits? With the current economy many more dentists are participating in network plans in order to attract more patients and in the process are giving discounts in the range of 50% to more than 70%. Does your dentist or a dentist close to you participate in a network? You might be surprised to learn that nearly two thirds of the nation's dentists currently do and, if yours does, you could be saving hundreds of dollars immediately.

Click here to do an instant, absolutely free check against up to 36 major networks, depending on your area.

The cost for you to join a network is minimal, generally starting in the range of $70-$100/year for an individual and as low as $150/year for an entire family; costs easily recouped with a single visit. Apply the cardinal rule of American consumerism, never pay retail, to dentistry and save a lot of money in the process.

by Ronald Haines, ronald@dentalplanguy.com

Dental is a buyer's market, but don't buy a plan until you know which of the 8 types is the best one for you

2010-08-22T21:52:00Z

When shopping for a dental plan for yourself and your family it is important to recognize that with eight different plan types currently being offered by a number of different companies, dental is a buyer's market. To help you select the plan that best fits your needs here is an overview of the eight types of dental plans available throughout the United States. Once you have decided on the type of dental plan you would like you'll then be able to comparison shop the companies that offer those plans for the best rate.

Dental Indemnity Insurance (Traditional or UCR) Plans: Standard format is 100% coverage for preventive care then, after a deductible, 80% coverage for basic work and 50% coverage for major work. Coverage is generally based on usual, customary and reasonable (UCR) charges and you are responsible for any excess balance.

PRO: go to any dentist

CON: these plans generally have the highest premiums

Dental Indemnity Insurance (Scheduled) Plans: Lists a schedule of covered benefits with the amount the insurance company will pay for each procedure. You are responsible for amounts over this.

PRO: go to any dentist for a lower premium than traditional

CON: potentially high out of pocket costs

Dental Regular PPO Plans: Same format as traditional dental insurance but with lower premiums and a choice of in or out of network dentists.

PRO: no balance billing for in-network providers

CON: out of network coverage not as good, resulting in higher balance bills

Dental Preventive PPO Plans: Similar to regular PPO but benefits limited to preventive care, usually covered at 100%, and in some cases a few basic procedures covered at 50% after a deductible.

PRO: low premiums for a plan providing 100% in network preventive coverage

CON: little or no coverage for procedures other than preventive and diagnostic

Dental Basic PPO Plans: Similar to regular PPO but out of network dentists are paid at the network negotiated rates.

PRO: lower premiums with same in-network benefits as regular dental PPO

CON: high out of pocket costs for non-network providers

Dental Open Network HMO Plans: Similar to a PPO but benefits can only be received from network dentists.

PRO: lower premiums than other PPO plans

CON: no out of network benefits

Dental HMO (DMO) Plans: Network only plans with a schedule of benefits and subscriber copayments.

PRO: low premiums for a complete plan

CON: must select a primary care dentist from network

Dental Discount Plans: Not an insurance product. You pay a fee for access to a network and then pay that network’s negotiated rates directly to the dentist, making you a buyer of benefits instead of a buyer of insurance. Study the fee schedule so you know what the plan will cover before you buy, and only buy a plan it it tells you exactly what you will pay for each procedure. Avoid any plan that just gives you a range of discount percentages.

PRO: best value if you shop carefully

CON: necessary to change the way you look at dental plans

Use insurance company secrets to slash your routine dental costs in half

2010-08-22T20:34:00Z

Until recently the only options available to the American consumer that did not have a dental plan available through their workplace was either a dental reimbursement plan, which helped pay some of the costs of dental visits, or a dental HMO plan which, while having reasonable copays, offered only a restrictive choice of dentists. Neither choice being particularly attractive, most chose to simply pay for dental care for themselves and their families directly to their dentist. Rising health care costs over the past few years has forced many employers to cut back on dental plan offerings, however, and as their employees who were used to dental insurance entered the individual marketplace they created a demand for group-like dental plans to be available for purchase. Responding to the opportunity, many large insurance companies have made these products available and there is now a good selection of both traditional and PPO styles of dental insurance available for individuals, families and seniors. In most cases, however, people are spending a lot more than they need to.

In order to be a good dental consumer it helps to first understand how the insurance process works. In the traditional model you go to your dentist and insurance pays a percentage, typically 100% of UCR* for preventive visits, 80% for basic services like fillings and 50% for major work like crowns and bridgework. In this system the insurance company is paying retail prices to the dentists and in order to make a profit they need to collect more via monthly premiums that what they pay out in benefits. Essentially a flow through system, as dentist charges increase the insurance companies simply raise their premiums to keep up.

Following the example of the health insurance industry, the concept of managed care has also been applied to dentists as a means to control costs and the most popular dental plans are now PPOs, or Preferred Provider Organizations. With this model, if you use a network dentist you’ll pay lower premiums for the same level of coverage as with traditional insurance.

In addition to premiums, insurance companies have several other means to maintain the profitability of their dental plans. Most of them require deductibles be met, have waiting periods before basic and major services are covered, and place annual limits on the amount of services the insured can receive. In spite of all this, it still makes sense to have a dental plan. With the average cost of a six month routine dental visit close to $150 ($50+ for exam and $90 and up for a cleaning), over $200 if you have x-rays done, the out of pocket costs for a family of four without a plan could easily exceed $1,400 per year just for preventive care. A traditional dental insurance plan that charges $120/month and pays for these visits in full can clearly be justified as a good budgeting tool and a PPO plan coming in at around $100/month offers value by costing less than paying out of pocket with no insurance. Still, $100/month is a lot of money. Especially when you realize that if you use the same tools that an insurance company does, the same dental care for a family of 4 can be had for half that amount. The secret lies in understanding how a PPO plan works.

PPOs contract with dentists to become ‘preferred providers’ which means they will receive less than their normal charges for services they provide to members of the network. A strong network and a large customer base gives a PPO a lot of leverage and, in order to participate, a dentist has to accept discounts in the range of 50% to 80% off their usual fees. With this tremendous buying power it is easy to see how an insurance company selling a PPO dental plan can offer value, provide customers with preventive care at no cost in exchange for annual premiums totaling less than what they would pay for those services in the retail environment, and still make a profit. Imagine how low your costs would be if you could access these networks without going through an insurance company? Well, imagine no longer. Under the labels of discount plans you can now rent access to these networks for as little as $7/month for a single person and typically less than $16/month for an entire family. Find a plan that gives you a 60% to 70% discount (shop around) off preventive care and you will only pay $400 instead of $1,400 by using a network dentist. Add $200 for annual access fees and your total annual preventive dental costs for a family of 4 is just $600, half the cost of a PPO plan and a savings of $800 over either traditional insurance or paying retail.

A couple of words of caution when shopping for a discount plan: companies that advertise the same network name may not offer the same rates or discounts, and be very skeptical of those savings plans that just offer 20% to 40% discounts without giving much detail. Never buy a plan that doesn’t provide you with the specific dollar amounts that you will be paying for particular procedures. I’ve created a checklist, how to evaluate a dental plan, on my website that you might find useful as you shop around. For an example of what a discount plan should offer, check out the Careington Dental Plan : at $6.95/month for single and $15.95/month for a family, it is my top pick.

Americans are the best consumers in the world. It’s time to apply that consumerism to dental care by taking advantage of the same shopping tools that the big insurance companies use.

*UCR stands for usual, customary and reasonable fees or, for our purposes, just think of it as the average charge of dentists in your area.

Why Dental Plan Guy

2010-08-20T16:39:41Z

Health care reform and the recent financial crisis have brought about significant changes to the world of dentistry. According to the Society for Human Resource Management, dental insurance tops the list of benefits that employers are looking to cut back on as they make adjustments due to health reform, dramatically increasing the demand for non group dental plans. Insurance companies have responded by offering plans similar to group dental as well as a variety of other plan styles on an individual basis such that consumers now have a choice of eight different types of dental plan from more than 30 carriers, creating both healthy competition and a good deal of confusion. Unfortunately, the common notion that dental insurance is too expensive remains so pervasive that most people have chosen to pay out of pocket rather than investigate the new plans. When financial concerns arise it’s an easy choice to use the $150 to $200 that would have been spent on a routine dental visit on to a trip to the grocery store instead, especially when nobody’s teeth are hurting. According to a 2009 Harris Interactive/Healthy Day poll, over half of Americans without dental insurance missed necessary dental visits last year and the U.S. Centers for Disease Control reports that only 48% of the children entering kindergarten had seen a dentist in the past 12 months. The impact of this, according to The American Dental Association, is half of the general practice dentists in America lost money in 2009.

I therefore created Dental Plan Guy to help reinforce the importance of good dental hygiene to the American public while at the same time showing consumers just how affordable dental care can be. Everybody living in America now has access to an inexpensive dental plan that, even after adding any out of pocket costs for dental visits to the monthly fees, will still cost of less than half that of paying a dentist directly without a plan.

Dental Plan Guy also assists uninsured individuals who have immediate needs such as root canals by getting them enrolled in dental plans that will provide them with immediate help.