Dental Insurance Plans
Before delving into the dental savings plan vs insurance policies comparison, let’s take a moment to analyze the latter.
Dental insurance plans have been around for decades, yet they have inherent limitations that affect patients.
In addition to limited coverage and yearly maximums, dental policies can cost hundreds of dollars per year for each adult. Families can spend north of $600 annually for a policy that covers all household members and these payments are usually divided into monthly installations.
The type of coverage depends heavily on the dental insurance policy that your patients purchase. Some policies limit individuals to a specific network, while others require them to cover the full cost upfront and issue a reimbursement later on.
One of the biggest challenges for patients is dealing with reimbursement times. The process is simple and fast with some providers, while other insurers make it harder to receive a refund for the dental services purchased.
Some of the most common challenges in terms of reimbursement include managing claim paperwork and lacking coverage due to preexisting conditions. This list also includes having to wait up to 18 months for the insurance policy to cover major treatments.
Lastly, insurance plans often limit the amount of money they reimburse to each patient on a yearly basis. This can range from $1000 to $1500 and more depending on the provider. But, this cap limits the advantages that insurance policies bring to patients in need of complex procedures.
Dental Membership/Savings Plans
Dental membership plans offer a great alternative to traditional insurance policies. Also known as dental savings plans, these programs are suitable for large families because they have a relatively low cost, especially for big families that require ongoing care.
Like insurance policies, dental membership programs vary from one provider to the next. It’s possible to find programs that work with a network of dentists. At the same time, patients can also opt for a dentist that offers an in-house program depending on which alternative offers the best option.
Patients often turn to their local dentist first when looking for a dental savings program. Having any type of membership program poses advantage in these instances. Having an in-house program is even better for dental care practitioners.
Giving patients great benefits is a great way to build a members list quickly. As a general rule of thumb, you should offer a savings program that has no yearly maximum and offers instant discounts in order to avoid the hassle of dealing with reimbursements, accounts receivable, and other traditional barriers.
Dental Savings Plan vs Insurance: How Do They Work?
Now that we’ve covered the basics of each one, let’s take a deeper dive into the dental savings plan vs insurance policies discussion.
Individuals that receive dental insurance as part of their work compensation package have fewer worries as their monthly premiums are covered by their employers. But, patients that pay dental insurance out of pocket should consider adjusting their approach.
The reason for this is that dental insurance plans are becoming more and more limiting. In addition to a slow plan activation, the annual limits and accompanying paperwork usually becomes a major issue for patients that are already strapped for time.
Additionally, some insurance providers don’t even cover some of the treatments that patients are looking for. Cosmetic dental procedures are a great example of this as the vast majority of insurers don’t provide coverage or discounts for this type of treatment.
Rather than opting to pay for treatments fully out of pocket, many patients are turning to dental insurance plans to help them maintain good oral health.
Contrary to traditional insurance policies, membership programs don’t have activation periods, paperwork, or annual limits. Moreover, some dentists create multiple programs to cater to all patients, including those who seek cosmetic, restorative, and otherwise aesthetic treatment.
Dental Savings Plan vs Insurance: Which Is Best for Me?
There is no one-size-fits-all answer formula to achieve great dental health for a family. Every household is different, so each family needs to consider its unique requirements in order to find the best alternative.
Dental practitioners need to take a similar approach. After all, no dental business has the same equipment, list of services, or in-house specialists. Therefore, you should look at your business goals, current assets, and future projections in order to find the best solution.
With all that said, it’s important to note that dental savings plans give practitioners more control over their patients, the treatments they provide, and the revenue that comes in. Practitioners can create dental plans perfectly tailored to their patients as well as their oral healthcare offices, all without the hassle of managing it internally.
One of the keys to success is to ensure that your patients see and understand the difference between a dental savings plan vs an insurance policy. Your team should be briefed on the difference between these as well as the benefits of your plan in order to provide accurate information. This will help enroll more members and improve the profitability of your savings plan.
Dental membership plans are the new way to access and pay for dental care.
According to the ADA, one of the biggest reasons that most people don’t go to the dentist is because of cost. One study indicated that 59% of Americans surveyed said they cannot afford to have dental work done. Dental fees as reported by the Consumer Price Index have risen by 20% over the past ten years, taking a toll on oral health and preventative care.
Almost two-thirds of the United States population fear they are unable to pay for quality dental care. As a result, too often patients wait a long time before getting simple preventive work completed that can prevent more expensive procedures at a later date due to neglect.
The American Academy of Periodontology reports to the Centers for Disease Control that half of the adults over age 30 have periodontitis, an advanced form of gum disease, which leads to severe dental issues if left untreated.
If that’s not enough, the dental industry, in general, has had a tough year economically as DSOs and solo dental practices have had to close down for a season due to the impact of COVID-19, effectively shutting down approximately 198,000 active dentists and dental specialists in the USA according to the Agency for Healthcare Research and Quality (AHRQ).
With most offices now reopened in the past couple of months, dentists are dealing with the rise in the cost of their own business due to the additional operational expenses in treating patients and sanitizing their practices. Getting back into the fiscal black is still a challenge.
Due to the variety of dental plans available to consumers in today’s oral health environment, it’s important to learn the differences between them. Some plans require your dental practice to be part of a network while others limit maximum charges. Also, many have set fees for specific services. Dentists need to have a fundamental knowledge of how dental plans work, regardless of the type and scope of the plan designs.
Patients have become savvier over the past several years, and with the growth of online access for purchase and a variety of plan designs even by the same plan vendor, the awareness of what plans include what benefits and how they work can be an education in itself.
Dental practices, including those with multiple locations and providers, must find ways to bring in new patients, keep their existing patient load, and increase revenues that provide additional profit. The traditional dental insurance plans that have been in the market for years include benefit coverages that can be easily exhausted if patients need extensive dental work.
Even though most dental insurance plans include 100% coverage for preventive dentistry for patients, most restorative work is typically only covered at half of that. That usually means the patient must make up the difference out of pocket, something that many of them are unable to pay. The other option is for the dentist to set up some type of deferred payment plan through a third-party billing service which further eats into the profitability of the office.
For the dental office, there is added waiting time for reimbursement of claims sent to the insurance carrier, and often those delays can take thirty to sixty days or longer if there are issues anywhere in the claims payment process. Delays of income to the dental office can be problematic if the accounts receivables are lagging too long. As well, especially for DSOs, this means additional personnel required to keep billings in check that adding to additional costs for the business.
Over the past several years, with the advent of dental membership plans growing in popularity by consumers, dental practices are beginning to see the light when it comes to accepting them. Many DSOs in particular are gravitating to developing their own plans with the help of licensed plan administrators who help manage the programs for their members. For a nominal cost, patients can save money using their membership plan without too many restrictions. Since there are no maximum limits on utilization, patients are able to use their dental membership plan as often as they need.
There are multiple reasons why dentists should have their own dental membership plan, but one of the primary reasons is cash flow. Dentists collect immediate payment at the time of service, and there is no claims process delaying payment to the office.
Additionally, the dental office collects a significant portion of the membership fee after a small administrative fee is paid to the plan administrator, thereby making up some of the discounted fees charged for procedures. Not only that, but these patients become more loyal to your practice over time. They have a vested interest in returning and referring others to you.
What type of dental plans should your office accept?
The easy answer would be all of them. Yet, the best strategy would be similar to going to a cafeteria for lunch. You don’t have to take everything offered on the buffet line, but take those items that are best suited for your practice including a well-rounded blend of the best choices – make up your own dental plan menu of what is available. That should include both some insurance plans along with your own dental membership plan with the assistance of a qualified plan administrator at your service.
Dental savings plans and dental insurance policies are inherently different, so it’s essential to understand the differences between the two. We hope that the article above has helped you gauge the impact of implementing an in-house savings program, especially if you rely heavily on insurance claims and accounts receivable.
If you want to learn more about implementing a dental care program designed specifically for your practice easily and without hassle, get in touch with Membersy today. Our team will be glad to help.