Why is dental insurance so lousy?
As WestCoaster points out, insurance is basically gambling: you gamble that you will need it, the insurer gambles you won’t. The betting pool is spread out among many insured, which means the probability increases toward unity that some of those insured will require the pay outs, even though we still can’t tell who that will be. But everybody (more or less) gets dental cleanings. There is no probability involved. Since everybody uses it, the only savings to be had are, essentially, in bulk purchases.
As a father of 3, I’ve found that a dental plan that covers 100% of regular cleanings/checkups, and gives you an option for a Flexible spending account (i.e. pre-tax moneys socked away for anything that the insurance doesn’t cover outright), my dental coverage goes a long way. I work for an insurance company (the largest in the world, in fact) so I may have a better context from which to judge this, but I’m particularly satisfied with my coverage. And, this is after going through one set of braces on a child, already. I’ve still got 2 more to go.
The concept of insurance seems to make most sense when there are high-cost risks with relatively low probability (consider, for example, property insurance). For dental care, by comparison: * Much of the cost is for regular (ideally, twice per year) checkups and cleaning; unavoidable. * Potential costs in the under-$500 range are significant but not worth (from the insurer’s viewpoint) requiring a second opinion; it’s not clear how subjective these decisions are. *[Probably most important] – unlike medical conditions, dental problems are often untreated for years. If there were low-cost insurance available on the open market, those with significant problems would be the ones flocking to it. (Which is why, I suppose, that a lot of dental treatments require patients to pay 50% of some costs.) Perhaps as an illustration, the dental insurance I have through my work starts with a 40% deductible in year 1 of employment, and this decreases by 10% per year IF I go to the dentist for a checkup
smackfu, it probably makes sense only because most people don’t take advantage of it. It’s like using rebates to “discount” the price of a product. In my opinion the best way to make dental coverage effective for both insurers and their customers is to make it part of standard health plans. That way the insurer gets to cover a larger pool and reduce their expenses, and in turn they can offer their customers improved dental coverage by doing away with the strict annual and lifetime coverage limits most plans seem to offer today. I like what WestCoaster’s plan does by reducing costs (or increasing coverage) if the insurer gets recommended preventative care. Similar things could be done in other areas of health care. It would be a good way to encourage people to get recommended cancer screenings, for instance, which could reduce the risk of paying for treatment of advanced cancer among a large pool of insured customers. Encouraging their customers to get flu shots in this manner would hel
