In short, it doesn’t. Dental insurance is nothing like medical insurance. Most dental “insurance” comes in 2 flavors. Some are DMOs (Dental Maintenance Organizations) and as they state, they work well providing you need nothing done. They are for maintenance. If you need actual work, you usually pay according to an established fee schedule. This actually isn’t insurance, it is a dental plan. With these plans you are usually assigned to an office and have no freedom to choose your dentist without the blessing of the “insurance” carrier.
The second type of insurance is indemnity insurance. This is the standard type of dental insurance where the dentist sends in a claim and you, or the dentist, gets paid through the dental carrier. Unlike medical insurance which works off of a lifetime maximum, dental insurance runs on a yearly maximum. With this type of plan the dental insurance carrier will pay up to a certain amount per year if they feel like it, based on percentages and procedure amounts which were usually determined a decade ago.
Most insurance of this type has a yearly maximum of $1000-1500 per year. If your dentist puts in a bill for $10,000.00, the plan will pay up to the maximum only. It’s like you get a $1000-1500 rebate. This type of insurance also has a deductible and other limits to payment that most people are not aware of. Most of these plans will have a waiting period for new enrollees that lasts a year. That means your plan will pay nothing for most procedures that are not preventative in nature for the first year. Another limit to payment is the missing tooth clause. That means insurance will not pay to replace any teeth that were missing prior to plan coverage. A PPO is the same exact type of plan except the dentist has agreed to use a particular fee schedule when charging patients. The best rule of thumb guideline to use to predict insurance coverage payments with this type of insurance is the 1/3 rule. Take 1/3 the total cost of treatment and that’s what they will pay, up to the yearly limit.
So the next time you’re asked “how does Dental Insurance work?” you can have an answer. And remember that insurance companies are not in the business of dental health, nor do they care about you or your teeth. Their job is to collect premiums, invest money, own the largest buildings in each major city, and report profits to their stockholders. The people who care about your teeth are your dentist and yourself.
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