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1/6/2009
Tuesday morning
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| Dental insurance doesnt really fit this description. For the most part,
dentistry is a high frequency low cost (that is, about $100 a trip)
occurrence. Most of the expensive stuff in dentistry is actually considered
by the insurance companies to be elective. If you need a root canal and
crown (lets say, at $1000), you can say no Doc, I dont have the money,
please pull it out (at under $100). On the other hand, most medical
insurance is not elective. If you need dialysis, at tens of thousands of
dollars, you dont go in and say; no Doc, I cant afford it right now, I
need to buy new shoes for little Johnny, if I live to see next year, maybe
Ill have it done. |
| A second factor that prevents utilization of dental insurance
is all of the widespread confusion! I went to quotesmith.com
where they offer dental insurance. I just wanted to look
around and maybe cause a little trouble. |
| Now, let me explain what dental insurance actually is. It is nothing more
than a way for your employer to provide you with a tax free benefit. It is
typically capped at $1-2k per year so they can manage it. What happens is
for every person on your plan, your employer pays, lets say $20-30 per
month. During any given year, statistically more than half the people
covered by dental insurance wont even go to see the dentist! Of the other
half, more than half of them wont need anything more than 2 cleanings a
year. The last 25% run up the bill. |
| In dentistry, thats a little different. Dental insurance is
in reality, a discount dental plan. Your premium allows you
to control dental costs through centralized insurance company
administration. Many plans pay 100% for routine care and then
require you to pay 50% against the catastrophic part of the
contract. So the function of dental insurance (and managed
care) is a concerted effort to keep dental fees in line for
you, the patient. |
| In actuality, dental insurance is essentially a way for an employer to
give its employees a tax favored benefit. Your employer makes a tax
deductible payment to the insurance company. Any benefit payable to or for
you is not taxable to you. The insurance company makes a profit, the
employer gets a deduction, you get a benefit. Everyone is happy. |
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