THE STATE OF DENTAL INSURANCE IN 2017

The Merriam-Webster definition of insurance is “coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril.” We have insurance on our house and car. If our car gets damaged, we usually pay a deductible and the insurance picks up the rest. If our house burns down, we have insurance to help us rebuild it. Unfortunately, that is not the way it works in dentistry.

I have not decided how many columns there are going to be in this series yet but I anticipate 2 or 3, maybe 4. My purpose of this series is to explain how I see the current state of dental insurance, and how its trend is changing the way dental care will be delivered in the future. It may sound like some boring columns, but I encourage you to read them and pass them on for others to read. I feel it is important information to have in choosing how you receive your dental care.

It’s common to hear patients ask, “What does my insurance cover?” followed by “Why is dental insurance so lousy?” And my patients have a point — dental insurance typically is pretty lousy, for the patient and the dentist. There’s not enough coverage, too many things aren’t covered at all, the co-pays are too high, and the limitations are fairly strict. But why is this so?

I am not here to bash dental insurance. It has its place. However, I think the first order of business is to eliminate the word “insurance” after dental in our vocabulary. If you look back at the definition of insurance, dental insurance is not insurance; it is a dental “benefit”. Some may not like to hear that but that is what it is.

Unlike medical insurance, which started being offered in 1850 by the Franklin Health Insurance Company of Massachusetts, dental insurance is a fairly recent phenomenon. Dental insurance was first introduced in California in 1954, and quickly rose in popularity. By the 1970’s, these plans were widely available and usually provided a maximum annual coverage of about $1000 (which is still about the maximum today).

The first plans didn’t distinguish between in-network and out-of-network providers. They simply established usual and customary rates for the area, and would pay (typically) 100% of preventative care, 80% of minor dental work (such as fillings) and 50 percent of major work (like crowns, bridges, etc).

Eventually, insurance companies started offering PPO plans. The way these new plans worked is that in-network providers who signed up for these plans agreed to a reduced fee schedule for their services. Patients could go to an out-of-network provider but would have to pay the difference between the provider’s fees and the insurance reimbursement.

PPO plans peaked in 2011 with 65% market share but have been losing ground ever since. New insurance plans are offering lower and lower payouts. Less and less of your smaller/private dental offices are able to accept these plans because they make it impossible to provide comprehensive care and treat patients the way they should be treated. However, these plans are less expensive for employers.

There are drastic changes coming to the dental benefit world in the near future that will cause quite a stir for both patients and dentists. I will continue next week.