Will A Dental Discount Plan Save You Money?
I have had the good fortune to experience a comprehensive dental insurance in my lifetime. For a small monthly premium (usually $27 or less), my family and I could enjoy twice-a-year cleanings, annual x-rays, and routine repairs with little or no out-of-pocket expenses. Now that I’ve jumped headfirst into the world of self-employment, my days of enjoying low-cost dental coverage are gone. So I tried a dental “discount” plan for the first time ever. Here’s what I have found.
The cost of coverage varies. I personally pay less than $80 a year to cover my entire family under the discount plan. There are 6 of us, so this could be an excellent value in the long run. I would like to point out, however, that most plans run between $90 and $200 a year for similar coverage (we enjoyed a deep discount as part of a self-employed association group membership, which I paid separately for.)
The type of coverage varies. For most plans, your actual benefit comes in the form of a “discount” off each billable service. This can come in the form of a percentage off your cost for each procedure, but most commonly equates to guaranteeing that you will pay “no more than $XX” for each particular billable service. Unlike insurance, your dental bill isn’t sent to a payor to process, negotiate down, and return to you. This means you will most likely know at the time of service how much your visit has been “discounted,” and payment will be due at time of service. Cleanings, X-rays, fillings, caps, and most other common dental and orthodontic procedures are usually covered, if only at a small discount.
Your dental health may determine the value of a plan. Quite simply, if you are one of those fortunate folks who waltzes into your dentist for a twice-a-year-cleaning and one x-ray, with no additional services needed, this may not work out to your advantage. The cost of premiums have to be less than the cost of services to keep you from bleeding cash. If you don’t see yourself going to the dentist regularly (or won't be needing any work done), you might want to calculate if you’d be better off without the discount plan.
Your location can affect savings. The first time I used my plan, my husband and I both went in for a regular cleaning, x-rays, and fluoridation. Upon presenting our discount, the receptionist informed us that we saved $10 on our $210 bill. This seemed strange to me, so I asked her what their normal cost of doing business was. It turns out, that since we are rural, and the cost to do business is low, they charge the same amount as the “discounted” price of our plan. We would have paid almost the same amount, regardless of using a discount plan. (And without the discount plan, I would have saved $80 in premiums.) In larger cities, where dental prices are higher, the discount plan could have more of a positive affect on your bottom line.
You can utilize your HSA to save even more money. Whether your dental plan was a good decision or not, you can still save some additional cash by using an Health Savings Account. The small amount of saved tax money, coupled with the discounts, might make it a sweeter deal than just paying cash. (My HSA gives me checks and a debit/credit card. Be sure to ask your dentist what kinds of payment they take, since you will most likely be paying at time of service.)
Will I get a dental discount plan next year? Probably not. Yes, I saved some money, but it was only because I ran into some unexpected fillings (7 to be exact.) The savings of $20 per filling, coupled with the $10 saved on my initial cleaning, would save me a grand total of $150 this year. Subtract the cost of my annual premium of $80, and I only saved a measly $70 (and this is with substantial work being done, which hopefully won’t be repeated next year.)
I would suggest looking at your dental discount plan from a strictly "bottom dollar savings" mentality. Call your dentist of choice, and see what they already charge for the most common services. Compare this cost with the cost you will incur under the savings plan. If there is a minimal difference between the two, you will know that the “discount” isn’t much of a discount, after all!