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You have a cavity, and you haven’t had a checkup for a while — and you just saw a come-on for dental insurance. You used to have dental insurance, and it was very helpful. So you are thinking about buying.

Not so fast. There are a few things you need to know.

First, the benefits might not really reward you for buying. There are often a lot of restrictions, which you might not notice unless you read all the fine print — or until you go to actually have dental work done.

Dr. James Hargrove, a dentist in Baton Rouge, La., agreed to tell me about the ins and outs of dental insurance. He has practiced for 15 years,  and has been on the state Dentistry Board and also headed the local chapter of the American Dental Association.

“There are absolutely some people that are going to benefit somewhat from dental insurance,” he said. “Sometimes your employer is paying for it, and sometimes you’re paying for it out of pocket. If your employer is paying for it, it’s a benefit of working for them, so why not? But if you’re paying for it out of your own pocket, there are some things you should know.”

What it costs, and what you get

With a common premium in the ballpark of $50 a month, he said, that’s $600 a year. Two cleanings with associated things like X-rays can easily total $500-$600 a year, he said. Most dental insurance policies have an annual maximum payout of $1,000, so individuals may not receive full benefits that they expect.

Additionally, insurance companies often cover major services at only 50% of the cost, so 50% will be paid by the patient, he added. “if I have $1,000 in need, I save $400, it’s more like somebody’s going to need closer to $1,500 to $2,000 in work with me, before they actually get a full payout of $1,000. Most people don’t need that much dentistry in a given year.”

When dentists agree to take insurance, he said, they agree to take the insurer’s fee schedule, in effect charging a lower rate for services provided to the insurance company’s patients. The insurance company negotiates a lower rate, such as $900 for a $1,000 crown, and the insurance company typically pays half of that amount while the patient pays the remaining $450. If the dentist is not part of the network, the patient would have to pay the full $1,000. (Some states require insurance companies to pay the same amount to out-of-network dentists, while federal plans are exempt from this requirement.)

“When I say some people come out ahead — the reality is that there are some people that do need that much,” he said. “I can’t categorically say that everyone loses. I just can say that categorically, on average, insurance companies take money off the table from the patient and the dentist. And they don’t really provide any added value to the situation.”

So why would a dentist sign up for insurance, if that $1,000 crown only nets $900? “Dentists are willing to sign up to be in network because they don’t have enough patients,” he said. “So they sign up so that they have more patients. Even if they’re making a smaller margin on the patient, they’re only making $900 on a crown instead of $1,000.”

Challenging treatment

For dentists, the experience can also be challenging

“if you ever got the policy, it’s yay thick, with tons and tons of fine print,” he said. “Every policy is different, every insurance company is different. But mostly, what is all that fine print about? Well, most of it is about how can we get out of paying.”

For example, some dental needs are clear. Sometimes they are diagnosed with an X-ray, and sometimes thre are problems that are not obvious from an X-ray, he said, like fracture lines with decay. “The first thing we are told in dental school is, ‘Don’t diagnose from an X-ray,'” he said. Sometimes when he submits a claim, the insurer says “we are not saying this is unnecessary, but we are saying we don’t have evidence that this tooth needs to be treated,” he said.

This can feed mistrust between dentist and patient, he said. Also a dentist’s judgment that a problem needs to be treated while the patient says “but it doesn’t hurt” can lead to a scenario in which patient and insurer are saying “nope” but the dentist says “yep.” And then downstream, instead of a filling for a couple hundred dollars, there’s a root canal and crown for $2,000, or an implant or a bridge at many times the price of the initially suggested filling.

Insurance is motivated not to pay out

“At the end of the day, insurance is motivated to not pay out any more than they absolutely have to. And so they put lots and lots of little clauses in there about what they don’t have to pay for. So they’ll tell you ‘Oh, crowns are covered in your in your policy.’ And then in the fine print, it’ll say ‘But we don’t pay for the restoration of teeth with just fractures.’

“If somebody comes up in ask them, does this tooth need a crown? The reviewing dentist would oftentimes say, ‘Yes, I absolutely would crown this, just like the dentist who treated it.’ And they’ll say, ‘Well, why didn’t you pay for it?’ Because their specific policy doesn’t cover fractures, it only covers a large loss of tooth structure for crowns. It’s kind of like saying, you’re driving down the road and you bought insurance to cover if a tire goes bad on your car, and then in the fine print, it says ‘But only if it was hit by a nail — if it hit a screw, it didn’t pay.’ “

People often don’t read the fine print in a dental policy, he said, just as they don’t read the fine print on online software purchases or transactions — they simply click “I accept.”

Having bought insurance, he said, the patient might think: “I’ve got dental insurance, I’m good. I’m covered. Everything’s covered because I get dental insurance.”

Yet, he said, “In reality, it’s almost never completely covered. A lot of people, when they have dental coverage, think it pays for everything, but it doesn’t. There’s many times where whatever it is they need is not covered. And they get frustrated with us and we’re like, ‘I didn’t buy the policy. I didn’t sell you the policy. I’m trying to help you with it, to understand it, as best as I can.'”

Insurance payments stagnant

One topic that Hargrove is passionate about is stagnant payments to dentists for services.

When dental insurance was more common and popular than it is now, in the 1970’s, the premiums were lower — less than $50 a month — and the total payout was about the same, that $1,000, he said. But the cost of dentistry has gone up.

“A crown today costs more than it did in 1980,” he said. He had a crown in the early 1990’s that cost $400 — but now he says he routinely sees crowns without insurance from $1,100 to $3,000 apiece. He has even heard $5,000 in California, he said.

Dentistry costs have gone up.

Take education, for example: When he graduated from dental school 15 years ago, he had maybe $150,000-$200,000 in educational debt. “Now it’s closer to $400,000 or $500,000,” he said. At a school like New York University, it is $750,000, he said.

Another example: The Drug Enforcement Administration license to write prescriptions — not to maintain controlled substances, but simply to write a prescription for an antibiotic — costs $800 a year, he said. That may not sound like much, but in the 1990’s that same license was about $25. “And that’s only one of many licenses and fees we are paying,” he said.

Materials have gone up, as have lab fees, paychecks for staff — “everything is more expensive,” he said.

“However, the in-network fees have failed miserably to keep up with anything close to inflation. Many of the plans that I am currently in network with have increased their fees no more than 5% in the 15 years that I’ve been practicing — and we had 10% inflation last year.”

One of the biggest insurers, Delta Dental, reduced their fees last year for many providers, he said.

“That puts the little owner in a squeeze,” he said. “His income does not move, it’s stagnant or best case goes up 1 to 2% a year. But there has not been one year in practice that my overhead did not go up.”

Combined with inflation, and trying to recover from Covid, the dentistry business is very challenging, he said.

The rise of the D.S.O.

That is one reason that private equity is capitalizing on stress by trying to build networks of dentists who are under the services of a dental support organization (or dental services organization), or D.S.O. I wrote about that earlier this month: “The primary tool of private equity in dentistry is the Dental Support Organization — sometimes a Dental Services Organization — which is described by private equity groups as a way to “support” dentists by supplying billing, payroll, business and nonclinical services. So the dentist could join a D.S.O. and use it for business aspects of the practice — which should mean that the dentist is in charge of clinical matters, but is no longer in charge of things like billing, payroll and so on. The line for ownership can be very blurry.

The American Dental Association says that ownership of practices by individual dentists dropped from 84.7% in 2005 to 73.0% in 2021.

If a dentist joins a D.S.O., Hargrove said, they get discounts on supplies by buying in volume. A solo office like his, he said, will get the “catalog rate,” or maybe 10% off. But in a D.S.O., the same supplies can come at a 40% discount. He also said it’s widely believed that the D.S.O.’s are able to negotiate higher payment rates with insurers than are individual dentists.

So what percentage of his patients have dental insurance? Between 50 and 60%, he said — but 90% of his revenue is from patients with insurance.

“Not everyone has it, but the ones that do get treatment are the ones who have it,” he said. “Others don’t have the money to spend. Or they decide not to. Use of my services is higher by people who do have dental insurance.”

Dentists frustrated by insurers

Hargrove said dentists are often frustrated when an insurer denies a claim. “They have all these ways of saying ‘no’ to things that you haven’t thought of,” he said.

If a claim is denied, he needs to write an appeal. Sometimes, despite the appeal narrative, the insurer will respond “we still don’t see a cavity on the X-ray,” meaning the claim is not approved. So he has to balance between over-documenting every single thing and taking three times longer, or using his judgment and forging ahead and hoping not to get tripped up.

The other tactic insurers use, he said, is a request for additional information. “I already told you what I did, and gave an X-ray, and told you there is no additional information, and then you ask for additional information,” he said. “Or they ask for something completely irrelevant.”

In Louisiana, he said, insurers have 30 days to pay a clean claim insurance form. But if they ask for additional information, they can re-set the clock — and they get to keep the money and get interest. Challenging this kind of behavior from an insurer is time-consuming, he said, which the insurers know — and so few dentists do challenge with, say, the insurance commissioner, alleging a pattern of denials. One would have to establish a pattern, he said, which is difficult with HIPAA privacy laws.

Beyond that, he noted, three of the last four Louisiana insurance commissioners have gone to prison.

Another quirk: Delta Dental will only send forms for claims to in-network dentists, he said. If you’re out of network, they won’t send forms, and they will only pay the patient at their home address. So filing the forms is harder — and also, sometimes the check goes to the patient with instructions to pay the sum to the dentist. That can bring a situation in which the insurer says it paid the patient, but the patient says she didn’t get the check. And Delta will talk to a dentist only if he is in network.

“I don’t have an answer,” he said. “It would be nice if dental insurance faded into the annals of history and we didn’t have it any more.”

What can you do?

Dental insurance is very different from medical insurance, he noted. If it’s not employer-sponsored, maybe it’s not worth it.

“Most people who are in a higher socioeconomic status are usually better with their finances,” he said. “They look at the situation and say ‘I pay $600 a year and get at the most $1,000 in benefits? Why would I do that? You don’t need a crown every year. I don’t need a lot of work, I take care of my teeth, why would I spend all that money on an insurance that isn’t really going to help me out? And so they make that better decision, in my opinion.

“It’s very similar to, if you go to the Best Buy and buy a thumb drive, they try to sell you a warranty. Most people have sort of figured out that it’s better not to buy insurance on stuff like that. And even if you did buy it, you don’t know how to how to get benefit of it.”

Very few dental issues will cost more than $5,000, he said, and that is very occasional. while medical expenses can easily skyrocket well beyond that.

“My personal philosophy: It only makes sense if you are insuring against catastrophic damage to your financial situation. Everything else should be cash. Otherwise, you are buying that thumb drive warranty at Best Buy.”

If you have a dental need that is not met, he said, “It can be traumatizing, but rarely catastrophic on the par of needing a heart transplant and not getting it.”

Further, he said, it’s not that expensive for a dentist to make it look like you have teeth in your mouth. Dentures are not that expensive, he said, but if you want an implant, or a bridge, or if you want to have a tooth fixed rather than removed, the price can add up.

“Most of these qustions are more about wants,” he said. “But in medicine, it’s ‘I’m going to live or I’m going to die.’ “

Jeanne Pinder  is the founder and CEO of ClearHealthCosts. She worked at The New York Times for almost 25 years as a reporter, editor and human resources executive, then volunteered for a buyout and founded...