Dental insurance is popular – many employees will buy it through payroll deduction. Typical premium is about $18 – $23 per month for single coverage. Family coverage can cost $50 – $60 but sometimes as much as $75-$85 per month. But is dental insurance cost effective?
Dental coverage is limited, most policies cover dental procedures up to $1,000 per year per insured. Routine and preventative care is usually paid 100% with no deductible, while all other dental treatment is subject to a low annual deductible like $50. Major dental services, such as crowns, inlays, onlays, root canals, etc., are covered at 50%.
Dental insurance rates typically don’t go up every year, and if they do, increases are minimal. Insurance companies, and agents who sell the policies make money. Nothing wrong with that.
But it costs as much as 45 cents on the dollar to deliver 55 cents of dental care. Does that make sense? And statistics show us that on average 40% of any given book of dental business do not seek dental care during a twelve month period.
So why insure dental care, especially when costs to administer the plan are high, and dental costs are relatively low and frequency of major care is limited for most people. It’s almost like buying Fan Belt Insurance for your car, or Water Pump Insurance, or Tire Insurance, or Alien Abduction Insurance.
So, is there a better way to finance a dental care program? The American Dental Association thinks so. It’s call Direct Reimbursement – http://www.ada.org/1611.aspx.
A direct dental reimbursement dental plan may make sense for many employers – www.dentaldirect.us
