Is Dental Insurance Worth It?


 
A new analysis by the American Dental Association’s Health Policy Institute (HPI) suggests that for most American adults, dental insurance isn’t worth the cost. With most adults having few claims and insurance premiums remaining relatively high, it seems that most of us would do better without dental insurance.
 

Analyzing Millions of Claims

For this study, researchers at the HPI looked at more than 24 million dental claims filed by nearly 6 million adults who were enrolled in private insurance plans. They also then looked at the fair market prices for those services claimed to determine whether people were getting good benefits from their dental insurance.

They found that “For the majority of adults, total copayments, coinsurance, and premiums exceed the “market” value of their dental care.”

Here’s what they found was the actual market value of dental treatments for people of various ages, first the average, then broken down by spending quartiles:

 

Ages Average First Quartile Second Quartile Third Quartile Fourth Quartile
19-34 $323 $164 $255 $348 $1425
35-49 $399 $141 $253 $467 $1593
50-64 $523 $128 $245 $810 $2104

However, once we subtract what insurance actually paid and add in the cost of insurance premiums, this is what these people actually paid for their dental care:

 

Ages Average First Quartile Second Quartile Third Quartile Fourth Quartile
19-34 $453 $391 $398 $430 $787
35-49 $476 $390 $397 $446 $876
50-64 $520 $390 $401 $520 $1090

In other words, on average an American adult age 19-49 will, on balance, pay more with insurance than without insurance, while for adults age 50-64, the savings are minimal.
 

Insurance Companies Protest

Of course, insurance companies don’t like this analysis. They say that the HPI used a flawed methodology to come to their conclusion. The key issue: the average dental premium. The HPI used the average standalone premium cost from the ACA marketplace to stand in for all premium costs. The average cost of a standalone plan is $380 for an adult. According to Jeff Album, vice president of public affairs at Delta Dental, that’s too high.

Mostly, it’s too high because most people get their insurance through group plans available through work, and 70% of those have most or all of their premiums paid by their employer. With employers paying a large percentage of the premiums, people get their dental insurance for much less than the cost cited by the HPI. Because people pay for premiums with pre-tax dollars and get other tax benefits, it can also make dental insurance a more affordable route. And flex dollars that come with insurance plans also help make treatments affordable.

Album noted two other benefits: it protects patients against fraudulent care, and it motivates them to get preventive care they might otherwise skip, but can result in significant savings by avoiding the need for more expensive reconstructive dentistry.
 

The Nature of Insurance

What the HPI has done is essentially remind us of the nature of any kind of insurance. No insurance company can stay in business unless it takes in more money in premiums than it pays out in benefits. The difference between your premiums and your benefits accounts for all the business expenses that insurers incur (including the more than $28 million Delta Dental executives earned in 2013). And if any of us knew for sure that we would be in the first or second quartile for spending, there’s no way we would bother paying for dental insurance. But for those in the fourth quartile, dental insurance is a huge savings, and many people find that the peace of mind it gives is worth the cost.

At the office of Las Vegas dentist Dr. James B. Polley we work with insurance companies or we can arrange to work directly with you. That way you can decide for yourself if you think dental insurance is worth it for you.

To schedule an appointment, please call (702) 873-0324 today.