Dental Insurance

If you or a spouse is employed and your employer provides dental insurance as a benefit, you may as well use it! But if you are self-employed or find yourself unemployed—you can potentially save hundreds of dollars each year by self-insuring your dental needs rather than purchasing dental insurance.

Dental insurance is one of those things that many people feel they ‘need’. It’s synonymous with health insurance. We even run the words together as if it’s a single item: Health and dental. We’re practically brainwashed that health insurance is not complete unless it’s match with dental insurance.

But... for many people, maybe even most people, it’s a complete waste of money. Insurance is to help get people through large and unexpected financially-crippling losses. Visits to the dentist rarely meet such criteria. Typically, you go twice a year for a cleaning and checkup. Total yearly expenses—assuming no problems arise—might be a few hundred dollars. If your dentist needs to fill a cavity, maybe a couple of hundred dollars more. Root canals and crowns might run a couple of thousand dollars—those are definitely big-ticket items! But with a decent float, all of those dental costs are manageable without insurance. Even if you were so unlucky that you need a couple of root canals, a crown and a few cavities filled—you’d be hard-pressed to push your bill above $10,000.

So self-insurance is definitely an option, but to know if it’s the right thing for you, you need to do the math.

The Cost of Dental Insurance is Just Too High

My actual yearly dental costs generally fall between $300 and $500 depending on how many x-rays they take or need a cavity filled. For dental insurance to be worth it, my total payments need to beat those numbers.

So I ran a search for dental insurance in my area for a male of my age and found several plans ranging from $19.71 to $79.39 per month—or $236.52 to $952.68 per year. That is just the cost of the premiums, however. I also need to add in out-of-pocket expenses.

The cheaper plan has a 20% co-insurance for teeth-cleanings and x-rays (except for full-mouth x-rays that have no coverage at all). Fillings, root canals, crowns and other procedures are not covered. If I had this plan and had no dental problems, I would expect to pay $50 to $100 out-of-pocket on top of the premiums for a total of about $300 to $350 per year. This happens to be about how much it would cost if I had no insurance at all!

If something does go horribly wrong with my teeth and I need a filling or crown or whatever, this particular insurance plan won’t cover the procedure and I’ll be on the hook for the full price—the same as if I had no insurance at all. This cheap policy is really more of a payment plan than an insurance plan and has no real advantages.

Maybe quality care requires a quality policy, however, so let’s look at the more expensive option.

With that policy, I would pay $952.68 per year in premiums. It would cover my cleanings and checkups but I’d still have a 20% co-insurance for x-rays—after a $50 deductible. If my teeth are well and happy all year, I would have to shell out about $1,000 in total. Without insurance, I’d save a whopping $700 for the year!

The most common problem I have is filling a cavity every few years. In that scenario, I’d still have to pay for 50% of the filling’s cost so my total cost would be roughly $1,100 for the year compared to the $500 or so if I paid without the ‘help’ of insurance. Still a solid $600 saved!

If a more expensive procedure such as a root canal or crown comes into play, I calculate that I would save about $300 with dental insurance over being self-insured. If I needed a couple of root canals or crowns, however, the $1,200 maximum annual benefit comes into play and I would get little additional savings.

Unless someone gets expensive procedures like a root canal or crown on a yearly basis, this insurance plan won’t save anyone money. None of the insurance plans did and it’s not surprising.

Insurance should protect you from large, unexpected financial losses. Regular cleanings and x-rays are not large nor are they unexpected. And for big-ticket items that are large and unexpected, the policies either do not cover them at all or only cover half of the expense limiting their risk but increasing yours. As a result, they are priced mostly as payment plans that have steep fees.

Advantages of Self-Insurance

If saving money is not reason enough to self-insure, there are additional advantages as well. Insurance companies do not like to pay for expensive procedures and sometimes deny claims. You might have to fight and appeal the decision. Maybe you will win, maybe you won’t. Either way, it will still waste your time and involve dealing with their bureaucracy. If you are self-insured, you approve your own claims!

The lack of red tape is another significant advantage. For instance, many dental plans will require at least six months between cleanings—and not a day sooner! When I thru-hiked the Appalachian Trail, I expected to be out of town for six full months so I had my teeth cleaned a couple of weeks before it was due. It was either that or wait an extra five months (for a total of 11 months between cleanings) until I returned home. Since I was self-insured, it was no big deal to get my teeth cleaned a couple of weeks early. With dental insurance, however, it could have been problematic.

I probably would have been fine if I went 11 months without a cleaning, but you can be certain that the insurance company would not have refunded me anything for essentially skipping a visit. Being self-insured means I can be flexible and skip the red tape and other obstacles that insurance companies might otherwise put in my way.

I’ve even discussed self-insurance with my dental hygienist. It came up when she asked if I had insurance and I answered, “Well, I prefer to say that I’m self-insured.” She was amused at the description, but it started a discussion about the topic, and she agreed that most people simply do not need dental insurance. I also got the sense that the dentist office preferred not having to deal with insurance companies as well—they have to deal with the same bureaucracy and obstacles that we do.

Saving Money with Your Self-Insurance Plan

So you’re convinced that self-insuring your dental needs is the way to go? Great! Now that you are on the hook for 100% of your dental bills, it makes sense to look at ways to keep those bills as low as possible. Some of these tips can even be useful if you do have insurance or you need a procedure that your insurance will not cover.

• This may seem obvious, but the very best thing you can do to lower your bills is take good care of your teeth. Brush and floss regularly! If you use a regular, old-fashioned toothbrush, you might consider investing in an electronic toothbrush like Sonicare. They are a bit expensive, but they do make it easier to clean those hard-to-reach molars, let you know when you are pressing the brush against your gums too hard and even let you know how long to brush each section of your mouth. If an electronic toothbrush makes you do a better job of brushing, it will pay for itself the first time you avoid a cavity.
• There is a second financial benefit in taking good care of your teeth besides not needing so many expensive repairs. My dentist usually takes some x-rays every year from patients but moved me to an every-other-year schedule because my teeth are in good shape, and my dental hygienist said that my teeth are in such good condition that I’d be fine if I came in for cleanings every eight months instead of the usual six. Fewer x-rays and fewer cleanings equal more money saved.
• Shop around. Websites such as Healthcare Bluebook and Zendy Health can give you an idea of how much various procedures will cost and where you can quality care at lower prices.
• If you have a Health Savings Account (HSA), use it! The average American pays almost 30% in income-based taxes. It varies widely from state to state and even from person to person, but let’s run with the average. If you have no major dental issues and pay $300 for cleanings and a checkup in a given year, you would normally have to earn $430 in order to pay a $300 bill after taxes. Through an HSA account, you pay no taxes and therefore only need to earn $300 in order to pay the $300 bill—a savings of nearly $130! We’ll come back and take a closer look at HSAs later in the Health Insurance section of this website.
• Ask what discounts are available. My dentist gives me 5% off if I pay with cash or check—a discount that I’ve heard is common among the industry. Maybe there are others?
• Let’s say something truly horrific is happening in your mouth and you are looking at potentially tens of thousands of dollars in dental bills. Drastic times call for drastic measures...take a vacation and travel to an exotic locale! And while you are there, get some low-cost, high-quality dental care. Countries like Mexico and Costa Rica have high-quality options at a fraction of US prices. Read more about medical tourism at the Medical Tourism Association website or pick up a book like Patients Beyond Borders.

The best part about saving money when you are self-insured—every cent you save goes into your own pocket! Because of the way most dental plans are structured, they typically reap the majority of any savings that you find.

Now let’s talk about the elephant in the room....