John Goodman included why dental insurance is so different from health insurance in the October 18th edition of Wednesday Links, but I thought it was too good not to write a longer post on it. It has been 15 years since I had dental insurance through work. At the time my dental coverage cost $34 a month and had a $250 deductible. It provided one free teeth cleaning per year with routine dental care paid at 85%. Oral surgery, crowns and root canal procedures were covered at 50%. The maximum benefit was $2,500 a year as I recall. My dentist wouldn’t even take it. The next year I dropped coverage because it wasn’t worth the $408 annual cost.
The gist of the Vox article is that dental insurance isn’t like medical insurance with unlimited benefits after a deductible. The article claimed:
Dental insurance isn’t a scam — but it’s also not insurance. How we pay for going to the dentist is supremely screwed up.
The thing about dental insurance is that it isn’t really insurance — it’s more like a half-helpful discount plan with a maximum. And once you reach the maximum, you’re on your own, often to the tune of hundreds and thousands of dollars. As though going to the dentist needed to be less fun.
Dental insurance and optical coverage have never caught on to the same degree as health insurance. That’s not necessarily bad, although one would never know that by reading the Vox article. The average person would probably be money ahead to put additional funds into a health savings account (HSA) instead of dental insurance and use that money for the dentist. More from Vox:
According to the American Dental Association, one-third of adults aged 19 to 64 don’t have any benefits at all. (For comparison, just 8.4 percent of Americans lack health insurance.) Many patients put off dental care and cite cost as the main reason they don’t go to the dentist — including those who are insured.
I’m surprised that two-thirds of adults under the age of 65 have dental coverage. I didn’t realize it was that high. Dental insurance does not work like health insurance (and that’s a good thing).
“When you look at the dental insurance model, it doesn’t protect the patient from financial risk. It’s the opposite,” said Marko Vujicic, chief economist and vice president of the Health Policy Institute at the American Dental Association. “Once the benefit runs out, the $1,400 or whatever it is, all of that financial burden is on the patient. So it protects the insurer, they’re limited on their exposure.”
Yet, the article goes on to say that whenever Congress considers adding dental benefits to Medicare, the American Dental Association opposes it. Dentists don’t want 66 million seniors calling their office, trying to use benefits that pay much lower fees than dentists prefer to work for.
Dental technology has advanced in the past few decades. Today dental patients have far more options than when I was a kid. When my grandfather had periodontal disease, they pulled his teeth. Nowadays there would be far more interventions available, such as periodontal surgery, implants, crowns, etc.
Dental care is labor intensive. Whereas a primary care physician may see three, four or even five patients an hour, a dentist may see only one or two. A dental hygienist can clean teeth but he or she cannot fill a cavity, perform surgery, or treat a root canal. They can assist the dentist with all the above but there still must be dentists performing the work.
According to the Bureau of Labor Statistics, dental inflation has risen 4,159% since 1935. During the same time, medical costs have risen 5,275%. According to one study, over a 20-year period (1996 to 2016) medical expenditures nearly doubled, while dental expenditures increased only about 50%. One reason for more constrained dental spending is probably the fact that dental coverage is not as generous. As a result, dental patients are more price sensitive. Because patients are more price sensitive, dentists must be more competitive.
Something else that would help patients is to allow dental hygienists to practice independently and allow dental therapists to service routine dental needs independent of dentists. A lot more Americans would visit a dental office if the costs were lower for routine services not requiring the expertise of a doctor of dental medicine.
Is dental coverage a bad deal? That depends on one’s circumstances but for the average person, routine dental care is probably cheaper using an HSA and self-insurance. My dentist has his own discount plan. A $199 annual fee gets me a 20% discount and two free cleaning each year along with a variety of other services. I even wrote about getting expensive dental care in Costa Rica at prices that are a lot cheaper than available locally.