September 15, 2015
There are several types of dental plans:
- Traditional dental plans – these plans pay a percentage of your dental bill depending on the procedure you have done. They pay a percentage of the dentist’s fee he charges for the procedures. Exams, cleanings and x-rays are usually covered at 100% while fillings are at 80% and major work like crowns, bridges, root canals or dentures are covered at 50%. That means the patient pays the remaining missing percentage. These plans also usually come with yearly maximums of $1000, $2000 or $2,500 and once the insurance company has paid out the amount equal to your maximum they won’t pay for anything else that year until your policy renews the next year (most policies renew every January) and so you would have to pay 100% of the dentist’s fee for any work done once the yearly maximum was paid out. These plans also have waiting periods, for fillings or major work like crowns, bridges, root canals or dentures. This means that if you’ve just signed up on the plan and you need a crown, the insurance won’t help you pay for it for one entire year (the insurance company wants to collect a year’s worth of premiums from you before they’ll pay for anything expensive). These plans used to be the norm but are virtually non-existent now.
- PPO plans – These work exactly like traditional plans except the dentist doesn’t get to collect his fee……instead he has agreed to collect only the fee the insurance company says he can collect, which is usually 40% to 60% less than his own fee. This saves you money, but it makes you a less valuable patient to the dentist because he gets less money for doing the same work he does on patients who have traditional plans. So instead of the filling costing $100 it might only cost $60 and then the insurance would pay their 80% of that $60 and the patient would pay the remaining 20%. PPO plans also save you money even if the yearly maximum has been paid out by the insurance company because the dentist STILL can only collect the fee the insurance company sets the price at, even if the yearly maximum has been met and the insurance is no longer paying out any money that year…….the patient would still have to pay 100% of the fee, but it would be the 40% – 60% off PPO fee instead of the dentist’s own fee.
- Reduce Fee Plans – these plans have a $40 – 60% reduction in the dentist’s own fee, just like PPO plans, but instead of the insurance company paying a percentage of that reduced fee, the insurance company pays NOTHING. The patient pays 100% of the fee set by the insurance company. These plans usually cost much less than PPO plans to have, sometimes as little as $5 a month, which offsets the fact that the patient has to pay 100% of the reduced fee. There are several advantages to reduced fee plans for both the dentist and the patient. For example, since the insurance company NEVER pays out any money to help the patient there are no waiting periods and no yearly maximums on reduced fee plans. You can start getting work done the moment you sign up and you can get as much work done as you can afford to do without worrying that a yearly maximum will be reached. The dentist also benefits because he doesn’t have to bill an insurance company and wait for payment…..the patient simply pays for any work they get done the day they get it done. The dentist doesn’t have to pre-authorize any work with the insurance company before starting treatment either (something both tradition and PPO plans require before any major work is done like crowns, bridges, root canals, or dentures). Pre-authorizing slows down the speed at which the patient can get their treatment done because weeks, sometimes months, are spent waiting for the authorizations to go through the mail.
- HMO plans – these plans are totally different from any of the other types of plans. In essence, here’s how they work……imagine if Macy’s department store sent a letter to all their costumers telling them that if they paid $15 a month, every month, then when they needed something from one of their department stores they could come in and get it for just $5 more dollars the day they pick it up. In theory, Macy’s SHOULD make enough money collecting $15 every month from all of their customers to cover the huge loss they incur when a customer actually comes in and gets an item for only $5 additional dollars. In reality, Macy’s would be out of business the very next day because people would pay one $15 monthly payment and then come clean out their store paying just $5 additional dollars for each item. When Macy’s sets actual prices like they do now they can guarantee that they’ll make enough profit on each item so as not to go bankrupt if all the items are sold. With the HMO model, Macy’s faces a terrible risk that hoards of customers will all want to come in and clean them out all at once, long before Macy’s has collected enough months worth of $15 per person collections to cover the loss. In a dental HMO, the dentist is paid a fee by the insurance company each month for each person on the HMO plan…usually about $15 per person. So if the dentist has 100 patients on the HMO plan he’ll get a check for $1500 every month from the insurance company. But when any of those 100 patients need any work, the dentist has to provide that work for only $5 additional dollars. If just one of those 100 patients needs a 3 unit bridge (a fairly common procedure which costs about $2,500) that one patient would cost the dentist more money than he’ll get all month from the HMO insurance company. So how’s he going to do cleanings, exams and x-rays and other treatment for the other 99 HMO patients???? The answer is he doesn’t do the bridge, not yet anyway. The dentist makes the bridge patient wait until he’s collected many months worth of checks from the HMO insurance company before he can afford to do the work for that one patient – JUST LIKE the insurance companies have waiting periods where they won’t pay for major work until they’ve collected months worth of premiums from their customer before they pay for expensive work. Insurance companies are in the business of assessing RISK – they collect premiums every month from their customers and assume the risk that those premiums will cover any losses in claims they pay out. In the HMO plan, the insurance company assumes NO RISK AT ALL because ALL of the risk is shifted to the dentist. The dentist assumes the risk that the amount of money he gets every month from the HMO insurance company will cover his losses when a patient comes in for treatment. So, HMO plans only benefit the insurance company since the dentist doesn’t want to treat the HMO patient since the dentist makes the most money NOT TREATING the HMO patient. Having a relationship with a dentist who doesn’t want to have to treat you is not something you should want as a patient, and this is why you DON’T want an HMO plan. And HMO plans are not new. They were first thought up by Hippocrates in 460 BC. He was an ancient Greek physician who told his people on the Greek island of Kos that if they paid him a monthly fee in the form of food stuffs he would in exchange provide medical care for them when they needed it. It didn’t work back in 460 BC and it doesn’t work today either.
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