Dental Insurance vs. Direct Reimbursement. Why you need to understand the difference.

Even before the specter of the Affordable Care Act we’ve often been asked questions about dental insurance and why we don’t participate or why a plan doesn’t pay for this or that. It’s really not that complicated. Dental insurance is a rigged game and I refuse to play. No insurance company has ever lost a dime on a dental insurance policy. Insurance is for catastrophic events: i.e. hurricane Katrina, a $100,000 triple by-pass, your home burns down, etc. There simply is no catastrophic downside in dentistry! Therefore…no need for insurance. Same for eye glass coverage.

What people should want, where possible, is a dental benefit program. The answer for this is Direct Reimbursement.

Never heard of it? That’s because there’s no money to be made from it. No money for insurance companies, brokers, or sales people!

How does it work? Simple. You or your employer set aside a certain amount of money each year depending on a predetermined limit of coverage and the patient can:

  1. See any dentist of their choosing (there are no participating/non-participating dentists)
  2. Have any procedures done that are needed (there are no covered/non-covered services)
  3. Pay the dentist his or her regular fee.
  4. Present your paid receipt to your employer who will write you a check, up to the predetermined limit for the year.

The benefits to the employer are great too:

  1. The employer gets the same tax write off that they would for an insurance program
  2. You get the same benefit for less or a better benefit for the same amount of money set aside. (Typically the average benefit with a dental insurance plan is 65 cents for each premium dollar paid. The rest is the insurance company’s costs and profits!)
  3. If there’s money left at the end of the year…the employer keeps it! It’s their money! (When’s the last time you heard about an insurance premium being refunded?)

Need more information? Just call or e-mail my office or the American Dental Association. We would be happy to help you or your accountant set up a Direct Reimbursement Program for your place of employment!