Is Dental Insurance Really “Insurance”?

In a word: No.

Wikipedia defines “Insurance” as “ the equitable transfer of the risk of a loss, from one entity to another in exchange for payment”.  Most people’s idea of insurance is more or less in line with the basic gist of this definition:  A person pays the insurance company to protect them from the financial consequences of a catastrophic loss .  For example, your home insurance most likely covers the cost of your home in the event of a fire.  It’s a one-time catastrophic event and you won’t end up with many out of pocket costs.

Dental Insurance is a completely different entity.

Did you know that many people believe that their dental insurance company:

  1. Will pay for any procedure they need?
  2. Will pay the dentist’s full fee for that procedure?
  3. Will act in the patient’s best interest?

None of the above are true, and this comes as a rude awakening to many people.  Dental benefits don’t cover ALL of your dental costs or ALL procedures you may need.  Rather, they help defray costs of a select set of commonly required procedures.

I believe the best way to understand dental insurance is to think of it as a coupon. 

It’s a limited time, limited value offer applying only to certain services or procedures, and you generally have to spend some of your own money to access the benefit.

It’s based on average fees at average dentists for average patients in an average year.

The problems arise when you or your family’s needs go beyond average.  For example, your son breaks a tooth riding his scooter and ends up needing an implant, which is “not covered” under your plan.  Your spouse has a fall and breaks several teeth, and the cost to restore those teeth is thousands above your yearly insurance limit.  Or perhaps you are diagnosed with gum disease, but your plan won’t cover the frequent treatments you need.

But there’s more lurking under the surface that many people are unaware of.

Dental insurance plans come in many different flavors and vary drastically in the value that a person can attain from them.  As such, they don’t all pay for the same procedures, and NONE of them pay for every possible procedure you may need.  While most offer some benefit payable towards basic dentistry (like visits with the dental hygienist, extractions, and fillings), there are differences from plan to plan regarding what procedures are payable and in what amounts.

Sound confusing? It is. The takeaway message here is this: There is no such thing as 100% coverage.  Look at your dental “insurance” as a discount off your dental costs provided by your employer, not as a carte blanche guarantee that everything you need will be paid for.