Dental Insurance Benefits are so confusing! Ever want to know how to read your dental insurance company’s Explanation of Benefits or Predetermination? You’re not alone. Have you ever wondered what all those columns mean? I wrote the following article to help our patient’s better understand their dental insurance benefits. I hope you find it useful.
Dental plans have an annual maximum. This is the maximum dollar amount a dental insurance company will pay toward the cost of dental care within a specific benefit period (most of the time it’s a calendar year, but sometimes a fiscal year). The patient is responsible for the cost of any treatment above the annual maximum. Believe it or not, your cleanings and exams use up your maximum benefit! If you receive a root canal, crown buildup, and a crown, and you use all $1500 of your benefits, you will have to pay out-of-pocket for a cleaning during the same calendar year! Crazy, I know! Especially since people think they’re entitled to “two free cleanings a year.”
During a dental insurance benefit period, you have to pay a portion of your dental bill before your dental insurance company will contribute to the cost of treatment. In the majority of dental plans, diagnostic or preventive treatments do not have a deductible (cleanings and exams). So before your plan shells out money to pay for half of that crown, they’re going to subtract your deductible from their benefit. Wait what? If they normally pay 50% of a $1000 crown, they’re going to deduct your deductible, let’s say $50 first, then pay 50% on the remaining $950! Okay, that makes sense now.
Benefit plans pay a predetermined percentage of the cost of your treatment, and you are responsible for paying the balance. What you pay is called the coinsurance or your “out-of-pocket” cost.
Dental treatment is typically broken down into three classes of coverage. Each class provides coverage at a certain percentage, with specific limitations and exclusions. Diagnostic and preventive treatment are typically covered at the highest percentage (usually 100% percent). This is to give patients a financial incentive to seek early or preventive care, because such care can often prevent more extensive and costlier treatment. Basic procedures, such as fillings and periodontal treatment, are usually reimbursed at a slightly lower percentage (typically 80%). Major services, like crowns and bridges, are usually reimbursed at at the lowest percentage (50% most of the time).
Predetermination of Dental Benefits
You may ask your dentist to submit a request to your dental insurance for a written cost estimate for your treatment at any time. This will allow you to know in advance what procedures are covered, the amount the benefit plan will pay toward treatment, and your financial responsibility. However, a predetermination is not a guarantee of payment! Let me say that again: a predetermination is not a guarantee of payment! When the services are complete and a claim is received for payment, your benefits will calculate payment based on your current eligibility, amount remaining in your annual maximum, and any deductible requirements. And yes, I’ve seen insurance companies say they’ll pay on a predetermination and then deny a claim. Unfair indeed!
Limitations and Exclusions
Dental plans are not like car or home insurance – dental insurance benefits are designed to help pay for your dental expenses, not cover every dental need. All plans include limitations and exclusions. This can relate to the type or number of procedures, the number of visits, or age limits. For example, if you want a third cleaning in a year, but you’re only allowed two, you’ll have to pay out of pocket for the third.
John and his family have Aetna dental insurance, and have been coming to Mohawk Dental for years. John, his wife, and 2 children visit us in January for their cleanings and exams. There is no out-of-pocket cost, since preventive care is covered by John’s benefits at 100% with no deductible.
In March, John breaks a tooth eating a carrot. He sees the dentist, who examines the tooth, and determines it needs a crown. John receives the crown the following week. The fee for the crown is $800. His individual deductible is $100. The crown is reimbursed by Aetna at 50%. Therefore, John’s estimated out-of-pocket cost is $550. $800 crown – $100 deductible = $700, 50% of $700 is $350. $800 crown – $350 of benefits + $100 deductible is a $550 out-of-pocket cost.
John and his family return in July for the cleanings and exams. John’s wife and family have no out-of-pocket costs, since their plan covers two exams and cleanings per year. However, John’s exam isn’t covered, since his plan limitations allow coverage of only two exams per year.
John’s wife has an old bridge in the lower-left of her mouth that needs replacing. She requests that we submit a predetermination of dental benefits. Aetna responds in 2 weeks, and says that they will cover 50% of the bridge, after the individual deductible, until John’s wife’s maximum benefit has been reached. Since the cost of the bridge is $2200, and she has already used $300 of dental insurance benefits (2 cleanings and exams), she has $700 of benefits remaining. Her estimated out-of-pocket cost is $1500. $2200 bridge – $100 deductible = $2100, 50% of $2100 is $1050. $2200 crown – $700 of remaining benefits is an estimated $1500 out-of-pocket cost.
I hope this helped you learn more about your dental insurance benefits.