Dental Benefits 101

What are the different types of dental benefits products? 

There are four key types of dental benefit products with significant market shares today, i.e. dental HMOs, dental PPOs, dental Indemnity plans, and discount dental plans. Today 87% of all commercial dental policies are DPPOs. 

A common set of definitions is helpful in seeking dental benefits coverage. The terms we use are defined below:

Dental HMOs–refers to dental benefit plans that provide comprehensive dental benefits to a defined population of enrollees in exchange for a fixed monthly premium and pays for general dentistry services primarily under capitation arrangements with a contracted network of dentists. Enrollees must use network dentists to obtain coverage except where a point of service provision allows them to opt out of the network but at reduced coverage. 

Dental PPOs–refers to dental benefit plans that have contracts with providers for the express purpose of obtaining a discount from overall fees. Enrollees receive value from these discounts when using contracted providers but may go outside the network of discounted providers but with a reduction in coverage. Providers are reimbursed on a fee-for-service basis after care is provided at either the discounted rate or the “UCR” (usual, customary, reasonable) rate recognized by the plan. Individuals are not balance billed for the difference between the negotiated fee and the actual fee that the dentist charges.

Dental Indemnity Plans–refers to benefit plans where the risk for claims incurred is transferred from employer to a third-party insurer for a specified premium and providers are reimbursed on a fee-for-service basis and there are no discounted provider contract arrangements whereby the provider agrees to accept a fee below their customary fee.

Discount Dental or Dental Savings Plans–refers to non-insured programs in which a panel of dentists agrees to perform services for enrollees at a specified discounted price, or discount off their usual charge. No payment is made by the referral plan to the dentists; dentists are paid the negotiated fee directly by the enrollee. These plans are sometimes referred to as “access plans,” “savings plans” or “discount plans.”

What do dental plans normally cover?

There are seven basic areas of dental care that policies cover. With individual policies, often only the first four will be covered in the initial year of a policy with the last two available in later years. Orthodontics is usually a rider for both individual and group policies that can be selected when relevant.

1. preventive care, i.e. cleaning, routine office visits;
2. restorative care, i.e. fillings and crowns;
3. endodontics, i.e. root canals;
4. oral surgery, i.e. tooth removal and minor surgical procedures such as tissue biopsy and drainage of minor oral infections;
5. orthodontics, i.e. retainers, braces, etc.
6. periodontics, i.e. scaling, root planning and management of acute infections or lesions; and
7. prosthodontics, i.e. dentures and bridges.

Dental benefits overcome consumers’ top concern about getting the care they need—cost. The seven types of procedures are broken into three areas of coverage for payment purposes, i.e. preventive, basic and major.

Most plans cover 100% of preventive care and apply co-payments, either as a dollar amount (DHMOs) or as a percentage (DPPOs and Dental Indemnity/ or Traditional Insurance) to other levels of care. Preventive care usually includes periodic oral evaluations, x-rays and sealants. (NOTE: Sealants may be limited to certain age groups.)

Basic procedures, i.e. office visits, extractions, fillings, root canals, and periodontal treatment for gum disease, are typically covered at a lower percentage amount, for instance 80% when in network or a lower amount like 60% when a dentist is not in the network. In the case of a DHMO, there will be lower dollar co-payments for these procedures rather than percentages. For instance, if a service cost $100, the DHMO co-payment would be stated as $20.

Major procedures, i.e. crowns, bridges, inlays, and dentures are usually covered at the lowest percentage, such as 50% or a higher dollar co-payment in the case of a DHMO. Some carriers now offer coverage for implants under this category of coverage but may have a frequency limitation like one per year. (NOTE: Root canals are also sometimes covered in this category rather than as a Basic procedure, so check your coverage.)

About 57% of dental PPOs, the predominant dental product in the market, have a maximum annual benefit of $1,500 or more. While more of those with lower annual maximums hit the maximum, in the past 6 years on average only 5% of enrollees have reached their annual maximum for in-network services. 

This fact keeps employers from offering dental PPOs with higher annual maximums as the additional premium cost may not be affordable. While employers contribute some amount to dental coverage for most employees that are offered benefits, since 2010 the portion of employees paying the full premium for their dental benefits has doubled from 10% to 20%.

Deductibles for these products are usually between $50 and $100. Some carriers now offer policies that roll some portion of unused their annual maximum.

NOTE: DHMOs rarely have an annual maximum while most dental indemnity product annual limits parallel DPPO limits.

What are typical dental procedures and what do they cost?

Dental procedures are billed under procedure codes established by the American Dental Association. The 50 most commonly used codes encompass 95% of all procedures submitted to insurance carriers each year. These 50 codes can be grouped into the following types of procedures:

1. Oral Examinations (4)
2. X-rays (6)
3. Tooth cleanings (2)
4. Application of Fluoride (3)
5. Sealants (usually limited to children) (1)
6. Fillings either Amalgam /silver (3) or Composite/white (8)
7. Crowns (7)
8. Root Canals (3)
9. Treatments for gum disease (5)
10. Extractions (4)
11. Emergency relief of pain (1)
12. Anesthesia (2) and
13. Consultations

NADP does not collect information on dental fees. The ADA publishes a survey of dentist fees which is available from their website: Survey of Dental Fees 2016[1]. The data in this survey is in broad geographic areas. More specific, up-to-date information is available to consumers for particular dental procedures by zip code area from FAIR Health’s Dental Cost Lookup.

[1] Based on postings on the ADA website, this publication is updated every 3 years.

Did the Affordable Care Act (ACA) change how dental benefits are offered? 

Since the implementation of the Affordable Care Act in 2014, there is a new structure for children’s dental benefits. On the public “marketplaces” and for policies sold to small employers of 50 or fewer employees and to individuals, pediatric oral health services are defined as part of Essential Health Benefits (EHB). The pediatric services that meet EHB requirements through a standalone dental plan cannot have annual maximum limits and must limit consumer out of pocket expenses to $350 a year for one child or $700 a year for a family when the coverage. 

While pediatric oral health services in a medical plan also cannot have annual limits, the pediatric oral services that are covered can be subject to the full medical deductible which averaged $2900 in 2015. And the limits on consumer out-of-pocket expenses are much higher under medical plans. In 2017, limits on consumer out-of-pocket spending is $7,150 for an individual medical plan and $14,300 for a family medical plan. Pediatric oral services are included in these limits.

Adult coverage and children’s coverage through large employers (51 and more employees) remains under the structure described under the question, “What do dental plans normally cover?”

Do public programs like Medicaid and Medicare cover dental care? 

There are two dental diseases, cavities and gum disease. Dental coverage is important for children because cavities (dental caries) are the most common childhood disease. Dental coverage is important for adults because over 70% of adults aged 65 and older have some level of gum disease.

Medicaid covers comprehensive dental care for children through the Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit, which federal law requires all states to provide to children.

In 2009 a new requirement to provide dental coverage was also added to the Children’s Health Insurance Program that also allows a family to buy just dental coverage for their children if the family has medical coverage but no dental coverage. 

While states are not required to provide adult dental services under Medicaid, most provide some level of dental services for adults. Only 3 have no coverage at all. There is a strong state-by-state effort to assure Medicaid dental treatment for adults at some level. The two million visits to emergency rooms annually for dental services costs over $1.6 billion; Medicaid pays for about 1/3 of these charges, i.e. $520 million[1].

Traditional Medicare, i.e. Medicare Part B, does not cover routine dental procedures. However, about one-third of seniors buy Medicare Advantage plans rather than enroll in traditional Medicare. NADP’s 2018 Dental Benefits Report: Enrollment analyzed CMS data on Medicare Advantage enrollment and found that 10.9 million seniors had dental benefits through their MA plan in 2017. MA plans cover roughly one-third of Medicare enrollees.MA plan enrollment overall is projected to grow to 40% of Medicare by 2022. Most of the MA plans that include dental benefits charge no extra premium for the coverage. About 1 in 6, usually those with the more extensive benefits, do charge a small additional premium for the dental coverage.

There are also other commercial dental benefits available to seniors through groups like AARP’s endorsed group dental program for their members or on an individual basis.

What should I think about before I shop for coverage? 

Before you shop, think about what is most important to you or your employees:

Is it most critical for out-of-pocket expenses to be predictable and low? If so, a dental HMO might be best suited to your needs or those of your employees. Dental HMO co-payments are published and offer more predictability as they are usually stated as specific dollar amounts. As well premiums are also lowest among insured dental benefit products and there is rarely an annual maximum on care. As well they typically have the lowest deductibles. In 2016 NADP found nearly all DHMO plans have deductibles under $25 while only 15% of DPPO deductibles are at this level. The trade-off for this predictability and lower cost is a requirement that the consumer go to a dentist in the network for care. Only when a dental emergency occurs outside of the consumer’s home area is a dentist that is not in the network paid for dental care.

Do you or your workforce have a greater tolerance for cost-sharing and an interest in a broader network of dentists? If so a dental PPO or a Discount plan may suit you. Co-payments in dental PPOs are usually stated on a percentage basis and some coverage is still provided for care obtained of outside the network. DPPOs have an annual maximum on the amount the carrier will pay for services—most often $1500 or more. About 72% of deductibles are between $50 and $99.

Discount plans do not pay anything toward the cost of care; they simply make a network of providers available to the consumer that offer services at a discount. So, while Discount plan monthly fees are lower than DHMO and DPPO premiums, the full cost of care must be paid out-of-pocket at the discounted rate.

If freedom to choose a dentist is paramount a dental Indemnity plan may be your best match. Annual maximums and co-payments are similar to those of DPPOs. Premiums are often slightly lower than DPPOs as there is no network organization cost to the plan. While there is no restriction on the choice of dentist, there is no discount on fees, so the cost of services will be higher than in a DPPO which means that fewer services will be reimbursed within the annual maximum by the indemnity plan. So, consumer out-of-pocket costs will be highest under this plan type.

How can I find a Dental Plan?

The NADP site has a link to the NADP Directory; use the button on the home page marked “Find a Dental Plan.” This Directory provides a way to search by state and “individual” or “group” coverage for the carriers that offer dental benefits in your state. Since NADP members write more than 90% of all the private dental benefits in the United States, this search will usually provide a list of 6 to 12 companies that write coverage for individuals and many more for groups. Some of the companies offer only discount products or DHMO while others will offer DPPO or dental indemnity, so know the type of coverage you are looking for before you do your search.

Other web sites connect employers looking for group coverage to carriers:

• BenefitMall.com
• DigitalInsurance.com

Web sites that focus on people buying coverage for themselves or their family include the following:

• DentalPlans.com (predominately Discount or Savings Plans)
• DentalInsurance.com
• EhealthInsurance.com
• InsuranceCo.com
• HealthCare.gov ^[1]
• AARP Member Advantages Dental Coverage (for Seniors)

You can also look up the Delta plan that offers individual coverage in your state on the Delta Dental Plans Association site, DeltaDental.com.

If you are older and can’t afford the cost of dental coverage, there are community-based oral health programs that focus on seniors. This website provides a searchable database of these programs: https.oralhealth.acl.gov. The site is a collaboration among the U.S. Department of Health and Human Services, the Administration for Community Living and the Office of Women’s Health.

NOTE: Listing contact sites for coverage is not an endorsement of that site or their products.

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¹Healthcare.gov is the federal website offering medical and dental coverage with subsidies for families with incomes up to 400% of poverty. The website is open to individuals that do not have an offer of adequate coverage through an employer.

What do dental benefits cost on a group basis or if I buy them directly as an individual?

For most the cost of dental benefits is less than your daily cup of coffee. Depending on what you buy that might be regular coffee or it might be Starbucks. (NOTE: Costs will vary by area of the country and coverage.)

Individual policies are generally more expensive than a group policy and the coverage may also be somewhat limited. Individual policies generally do not cover orthodontia. There may also be other coverage limitations and/or waiting periods particularly for major procedures. NADP has not estimated national average monthly and annual dental premiums for individual products since 2009. At that time, they ranged from $4 to $15 more than similar group products for individuals and $20 to $35 more for family coverage.  

Employer Provided Dental Benefits: Depending on the type of dental benefit—DHMO, DPPO or Dental Indemnity, the employee’s premium is about the cost of having dinner out once a month—ranging from about $15.81 to $20.86 monthly or $190 to $250 on an annual basis in 2017[1] for DHMO or DPPO coverage. Even at the high end of that range—the annual cost for dental benefits are about the cost pf one month’s medical premium. Dental premiums for 2017 for employer groups with coverage are outlined below as national averages for typical group coverage for all size groups[2]:

Employee only:

• DHMO -- $16.64 to $18.31 a month--$200 to $220 annually
• DPPO --  $28.70 to $30.71 a month--$344 to $369 annually
• Indemnity -- $35.97 to $37.35 a month--$432 to $448 annually

Discount Dental Plan fees can range from a few dollars a month to $10 or $12 dollars a month for an individual or $20 to $30 a month for a family. The Consumer Health Alliance (CHA) reports that 62% of discount programs cost less than $200 annually and result in about 40% savings on cost of dental services[3]  

Dental Benefits on Public Insurance Marketplaces

In 2015 about 1/3 of the medical policies offered on public insurance marketplaces (aka exchanges) included a pediatric dental benefit. Of those 90% made that benefit subject to the medical deductible that averaged just under $3000. Of the 90% two thirds waived the deductible for diagnostic and preventive care making the pediatric benefit a “prevention only” benefit.

In 2016 the number of children applying for commercial coverage again increased; it was 1,068,631. Of these 115,304 applied for separate dental coverage. Again, no information was made available as to whether the other applicants obtained medical policies with pediatric dental coverage. About 1.4 million individuals overall applied for separate dental coverage, i.e. primarily adults.

In 2017, the number of children applying for commercial coverage through all public exchanges was approximately level to the prior year, i.e. 1,068,082 vs.1,068,631 the prior year. The number of overall applications in all public exchanges was down slightly as well, 12,200,000 vs. 12,600,000 the prior year. Overall there were about 1.9 million public exchange applications for SADPs with approximately 134,000 of these applications for children in the 0-17 age group.

[1] NADP 2019 Dental Benefits Report: Financial Operations and Premium Trends, January 2019

[2] Ibid. NOTE: Average of all groups is displayed; premiums for small groups (under 50) will usually be higher than the average shown here while the largest groups (500 or more) will be lower. 

[3] Discount Health Care Programs: Evolution and Prospects for Continued Growth, Consumer Health Alliance, 2017.