Dental Insurance Programs - In Your Local Area

Dental Insurance Plans: Compare Network and Out-of-Network Coverage

This article will outline the difference between an in-network dentist and an out-of-network dentist.

Access – The availability of dental care to a patient. This can be determined by location, transportation, type of dental insurance plan services in the area, etc.

Accident - An event that is unforeseen, unexpected, and unintended.

Accidental Bodily Injury - Physical injury sustained as the result of an accident.

Accumulation Period - Period during which the insured incurs eligible dental expenses to satisfy a deductible for the dental insurance plans.

Actively-At-Work - Most group dental insurance plans state that if an employee is not actively at work on the day the policy goes into effect, the coverage will not begin until the employee does return to work.

Actual Charge - The actual amount charged by a dentist for dental services rendered.

Actuary - Accredited insurance mathematician who calculates premium rates, reserves, and dividends and who prepares statistical studies and reports.

Acute Care - Skilled, medically necessary care provided by dental and nursing personnel in order to restore a person to good health.

Additional Drug Benefit List - Prescription drugs listed as commonly prescribed by dentists for patients' long-term use. Subject to review and change by the dental insurance plans involved. Also called drug maintenance list.

Administrative Services Only (ASO) Agreement - Contract between an insurer (or its subsidiary) and a group employer, eligible group, trustee, or other party, in which the insurer provides certain administrative services. These services may include actuarial support, plan design, claims processing, data recovery and analysis, benefits communication, financial advice, dental care conversions, data preparation for governmental reports, and stop-loss coverage.

Adjusted Community Rating (ACR) - Community rating adjusted by factors specific to a particular group. Also known as factored rating.

Admissions/1,000 - The number of admissions for each 1,000 members of the dental plan.

Admits - The number of admissions to a hospital (including outpatient and inpatient facilities).

Adverse Selection - Tendency of those who are poorer-than-average dental risks to apply for, or maintain, insurance coverage.

Age Change - The date on which a person's age, for insurance purposes, changes. In most Life Insurance contracts this is the date midway between the insured's natural birth dates. Dental insurers frequently use the age of the previous birth date for rate determinations. On the date of age change, a person's age may change to that of the last birth date, the nearer birth date, or the next birth date, depending upon the way in which the rating structure has been established by that particular insurer.

Age Limits - Ages below and above which an insurance company will not accept applications or renew policies.

Age/Sex Factor - Compares the age and sex risk of dental costs of one group relative to another. An age/sex factor above 1.00 indicates higher than average risk of dental insurance plans costs due to that factor. Conversely, a factor below 1.00 indicates a lower than average risk. This measurement is used in underwriting.

Age/Sex Rates (ASR) - Separate rates are established for each grouping of age and sex categories. Preferred over single and family rating because the rates and premiums automatically reflect changes in the age and sex content of the group. Also sometimes called table rates.

Agent - Insurance company representative licensed by the state who solicits, negotiates, or effects insurance contracts and who provides services to the policyholder for the insurer.

Allied Health Personnel - Health personnel who perform duties, which would otherwise have to be performed by physicians, optometrists, dentists, podiatrists, nurses, and chiropractors. Also called paramedical personnel.

Allocated Benefits - Payments authorized for specific purposes with a maximum specified for each. In hospital policies, for instance, there may be scheduled benefits for X-rays, drugs, dressings, and other specified expenses.

Allowable Charge - The lesser of the actual charge, the customary charge and the prevailing charge. It is the amount on which Medicare will base its Part B payment.

Allowable Costs - Charges that qualify as covered expenses.

Ancillary Services - Dental care services that patients receive from providers other than primary care dentists.

Ancillary Benefits - Benefits for miscellaneous hospital charges.

Approved Charge - Amounts paid under Medicare as the maximum fee for a covered service.

Approved Dental Care Facility or Program - A facility or program that has been approved by a dental care plan as described in the contract.

Assignment of Benefits - A method where the person receiving the dental benefits assigns the payment of those benefits to a dentist or hospital.

Average Cost Per Claim - The total cost of administrative and/or dental services divided by the number of units of exposure such as costs divided by number of admissions, or cost divided by number of outpatient claims, etc.

Average Length of Stay (ALOS) - The total number of patient days divided by the number of admissions and discharges during a specified period of time. This gives the average number of days in the hospital for each person admitted.

Average Wholesale Price (AWP) - Under the Medicare catastrophic coverage act, payment for prescription drugs is limited to the lowest of the pharmacy's actual charge, the sum of the AWP for the drug plus an administrative allowance, or effective 1992, the 90th percentile of pharmacy charges.

Base Capitation - The total amount which covers the cost of dental care per person, minus any mental dental or substance abuse services, pharmacy, and administrative charges.

Basic Hospital Expense Insurance - Hospital coverage providing benefits for room, board and miscellaneous expenses for a specified number of days.

Benefit Levels - The maximum amount a person is entitled to receive for a particular service or services as spelled out in the contract with a dental plan or insurer.

Benefit Package - A description of what services the insurer or dental plan offers to those covered under the terms of a dental insurance contract.

Benefit Period - Defines the period during which a Medicare beneficiary is eligible for Part A benefits. A benefit period is 90 days, which begins the day the patient is admitted to a hospital and ends when the individual has not been hospitalized for a period of 60 consecutive days.

Billed Claims - The amounts submitted by a dental care provider for services provided to a covered individual.

Binding Receipt - A receipt given for the payment that accompanies an application for insurance. If the policy is approved, the payment "binds" the company to make the policy effective from the date of receipt.

Birthday Rule - One method of determining which parent's dental coverage will be primary for dependent children. The parent whose birthday falls earliest in the year will be considered as having the primary plan.

Board-certified - A designation that a dentist has successfully completed an approved educational program and evaluation process by the American Board of Dental Specialties (ABMS) which includes an examination designed to assess the knowledge, skills, and experience required to provide quality patient care in a given specialty.

Board Eligible - A professional person or dentist who is eligible to take a specialty examination.

Broker - Person licensed by the state that places business with several insurers; the broker, although paid a commission by the insurer, represents the buyer rather than the insurance company.

COBRA - See Consolidated Omnibus Budget Reconciliation Act of 1986.

Capitation - A method of paying for dental services on a per-person rather than a per-procedure basis. Under capitation, an HMO pays a doctor a fixed amount each month to take care of HMO members, regardless of how much or how little care each member needs.

Carrier - Usually a commercial insurer contracted by the Department of Health and Human Services to process Part B claims payments.

Carry Over Provision - In major dental policies, allowing an insured who has submitted no claims during the year to apply any dental expenses incurred in the last three months of the year toward the new calendar year's deductible.

Case Management - The assessment of a person's long term care needs and the appropriate recommendations for care, monitoring and follow-up as to the extent and quality of services to be provided.

Case Manager - A person, usually an experienced professional, who coordinates the services necessary under the case management approach.

Catastrophe Policy - This is an older name for Major Dental.

Certificate of Authority (COA) - Issued by the state, it licenses the operation of an HMO.

Certificate of Insurance - Document that summarizes the provisions and benefits of an insurance contract. May be distributed in booklet form.

Chemical Dependency Services - The services required in the treatment and diagnosis of chemical dependency, alcoholism, and drug dependency.

Chemical Equivalents - Drugs that contain identical amounts of the same ingredients.

Closed Panel - A situation where covered insureds must select one primary care dentist. That dentist is the only one allowed to refer the patient to other dental care providers within the plan. Also called Closed Panel or Gatekeeper model.

Coinsurance - The amount you are required to pay for dental care in a fee-for-service plan or preferred provider organization (PPO) after you have met your deductible. It is usually expressed as a percentage of billed charges. For example, if the insurance company pays 80 percent of the claim, you pay 20 percent.

Commercial Policy - In Health Insurance, this term originally applied to policy forms intended for sale to individuals in commerce, as contrasted with industrial workers. Currently the term is loosely used to mean all policies that do not guarantee renewability.

Community Rating - Under this rating system, the charge for insurance to all insureds depends on the dental and hospital costs in the community or area to be covered. Individual characteristics of the insureds are not considered at all.

Composite Rate - One rate for all members of the group regardless of their status as single or members of a family.

Comprehensive Major Dental - A plan of insurance which has a low deductible, high maximum benefits, and a coinsurance feature. It is a combination of basic coverage and major dental coverage which has virtually replaced separate hospital, surgical and dental insurance plans with each having its own deductible requirements. Also see Major Dental Insurance.

Concurrent Review - A case management technique which allows insurers to monitor an insured's hospital stay and to know in advance if there are any changes in the expected period of confinement and the planned release date.

Conditional Binding Receipt - It provides that if a premium accompanies an application, the coverage will be in force from the date of application or dental examination, if any, whichever is later, provided the insurer would have issued the coverage on the basis of the facts revealed on the application, dental examination and other usual sources of underwriting information. A Life and Health Insurance policy without a conditional binding receipt is not effective until it is delivered to the insured and the premium is paid.

Conditionally Renewable - A contract that provides that the insured may renew it to a stated date or an advanced age, subject to the right of the insurer to decline renewal only under conditions stated in the contract.

Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986 - Legislation providing for a continuation of group health care benefits under the group plan for a period of time when benefits would otherwise terminate. Continuation rights apply to enrolled persons and their dependents. Coverage may be continued for up to 18 months if the insured person terminates employment or is no longer eligible. Coverage may be continued for up to 36 months in nearly all other cases, such as loss of dependent eligibility because of death of the enrolled person, divorce, or attainment of the limiting age.

Continuation - Allows terminated employees to continue their group dental insurance coverage under certain conditions.

Consumer Price Index (CPI) - A measure of the average change in prices over time in a fixed group of goods and services. In this report, all references to the CPI relate to the CPI for Urban Wage Earners and Clerical Workers (CPI-W).

Contract Year - This period runs from the effective date to the expiration date of the contract.

Conversion Privilege - Right given to an insured person under a group dental insurance plans to change coverage, without evidence of dental insurability, to an individual policy upon termination of the group coverage. The conditions under which conversion can be made are defined in the master policy.

Coordination of Benefits (COB) - Method of integrating benefits payable under more than one dental insurance plan so that the insured's benefits from all sources do not exceed 100 percent of allowable dental expenses or eliminate incentives to contain costs.

Co-payment - A specific charge you pay for a specific dental service. For example, you may pay $10 for an office visit or $5 for a prescription and the dental plan covers the rest of the dental charges.

Corridor Deductible - A Major Dental deductible that provides for a deductible, or "corridor," after the full payment of basic hospital and dental expenses up to a stated amount. In the event of further expenses, payment is on the basis of participation or coinsurance, such as 80%-20% or 85%-15%, and the deductible is that portion paid by the insured.

Cost Contract - An agreement between a provider and the Health Care Financing Administration to provide dental insurance plans services to covered persons based on reasonable costs for service.

Cost Sharing - A situation where covered persons pay a portion of the dental costs such as deductibles, coinsurance, or copayment amounts.

Covered Expenses - Dental care expenses incurred by an insured or covered person that qualify for reimbursement under the terms of a policy contract.

Covered Person - A person who pays premiums into the contract for the benefits provided and who also meets eligibility requirements.

Creditable Coverage - What Does It Include?

The purpose of creditable coverage is to give you credit for prior health care coverage. You will generally be deemed to have creditable coverage if your prior health care coverage was under one of the following:

• A group health plan
• A governmental or church plan
• Health insurance coverage (care under any hospital or dental service policy or certificate, hospital or dental service plan contract, or HMO contract)
• Medicare (Parts A and B)
• Medicaid
• CHAMPUS
• A military-sponsored health care program
• A dental care program of the Indian Health Service or of a tribal organization
• A state health benefits risk pool
• A health program offered under the Federal Employees Health Benefit Program
• A public health plan, such as one provided by a state or local governmental political subdivision
• Health benefit plan provided for Peace Corps members

Creditable coverage does not include:

• Coverage only for accidents
• Disability income insurance
• General or auto liability insurance
• Workers' compensation
• Auto dental payment insurance
• Credit-only insurance

How do I show that I have creditable coverage?

In general, you should receive a certificate from your current plan or issuer when your coverage ceases, such as when you leave or change your job. The certificate should contain information demonstrating that you have creditable coverage.

If you do not receive a certificate and your new plan or issuer wants to apply a preexisting condition exclusion, ask your new plan or issuer to help you get a certificate from your old plan or issuer. If you still cannot get a certificate, you can use a variety of evidence to prove creditable coverage. Acceptable documentation includes: pay stubs that reflect a premium deduction, explanation of benefit forms (EOBs), a benefit termination notice from Medicare or Medicaid, and verification by a doctor or your former health care benefits provider that you had prior health or dental coverage.

You may request a certificate from your plan or issuer at any time, free of charge. In fact, you can request a certificate ahead of time if you know you will be changing jobs.

Generally, a significant break in coverage is 63 days or more without any creditable coverage. Any coverage occurring prior to a break in coverage of 63 days would not have to be credited against a preexisting condition exclusion period. For example, John Doe had coverage for two years followed by a break in coverage for 70 days, and then resumed coverage for eight months. He would receive credit against any preexisting condition exclusion only for eight months of coverage; no credit would have to be given for the two years of coverage prior to the break of 63 days or more.

Types Of Discount Dental Plans - Coverage for Individuals and Families

DENTAL PPO PROGRAM

A dental PPO – preferred provider organization – is a individual dental insurance plan that uses a network of contracted dentists to provide a better value. Like a medical PPO, the dentists on the dental PPO network have agreed to a discount dental plan set of dental fees that have been established to be below the usual geographic area.

The dentists have agreed to the reduced fees in order to attract additional patients that might not have come to their office otherwise. The PPO network can replace some of the advertising that a dentist or dental group might rely on to bring in new patients. So you can see how medical and individual dental insurance plans are alike.

DENTAL CAPITATION PROGRAM - DHMO

A dental capitation or “Cap” program is another variation of discount dental coverage. They are sometimes referred to as Dental HMOs or DHMOs. Unlike the traditional discount dental plans described above, a dental capitation insurance plan does not use the fee-for-service system, but pays the dentist a fixed amount for each patient each month.

The capitation refers to this fixed monthly payment, which is determined from a combination of the premium received and the historic utilization of that group. While a way to transfer some of the risk of the cost for extensive services to the dentist, it can also be a source of conflict when a number of patients need multiple services from the same provider.

DENTAL REFERRAL or DISCOUNT DENTAL PLANS

A dental referral plan is not insurance. This type of dental plan uses a network of contracted dentists, like a PPO or DHMO, but the benefit is simply a discounted fee on their individual dental insurance plan. Nothing is paid on behalf of the member; they are simply entitled to a lower fee for their dental care. While this can appear to be of limited value, some referral plans are able to save their members a significant amount of money in dental fees.

Be sure when you are purchasing a discount dental plan that you are aware of the nature of the plan. A dental referral plan may help you with special fees at a limited number of dental offices, but it does not provide emergency benefits when you are away from home unless you contact the plan office and find a participating dentist where you are visiting.

GETTING THE MOST FROM YOUR DENTAL INSURANCE

Dental insurance is focused on the preventive and diagnostic services for higher coverage. To get the maximum benefit from your insurance plan, you need to consider the following issues:

• Is there an option that uses a PPO or DHMO network where you premium dollars will get more dental services? Often, using a PPO dentist can save you 10 – 20% from the usual fees.
• Whether you are in a PPO or not, will your dentist provide a treatment plan for a large amount of work? To be sure that your dental services will be covered by your plan, it is best to have your dentist send in a pre-estimate of services. That way you will know that the services are covered and what your portion of the costs will be.
• Can the treatment be set up in stages? If some care is more urgent than other services, perhaps your dentist can provide the services over two calendar years, thus utilizing two annual maximums. Annual maximums are usually $1500 or more, but that can be reached quickly with multiple services.
• Are there alternatives? Often, a dental problem can be solved in several different ways, all satisfactory and appropriate, but different. For instance, missing teeth can be replaced by dental implants, or by a bridge (in most instances) or by a partial denture. All of these are acceptable dental care, but the costs can vary widely. Talk to your dentist about why he or she believes that this treatment is best for you and if you still have questions, seek a second opinion.
• How often can you get your teeth cleaned? Some plans indicate twice per year, while others limit you to once every 6 months. If you have the second kind and your cleaning occurs before 6 months have passed, the insurance will not pay the benefit. Be aware of your plan coverage and the specifics before you get surprised
• Are your children too old for coverage? Dental insurance for your family usually covers children as dependents up to age 18 or 19. If your child is over 18, you should understand when coverage ends and if they are a full-time student, what you must do to prove that for the insurance company.
• Are the services that your dentist is proposing covered? Sometimes, new forms of dental treatment or cosmetic services are not covered by your dental insurance. Be sure to check your benefits guide and/or have your dentist submit a pre-treatment estimate to confirm that the services will be covered. If the services are denied, you or your dentist may need to write a letter and send more explanation regarding the need for these services.
• Do you have coverage from both parents? The dental insurance companies will then use coordination of benefits to determine which insurance is primary and which is secondary for your children. Once you know that, the claim should be submitted to the primary carrier first.
• Does your dentist give a discount for cash? Some offices will allow you to pay and receive a discount for cash and then send in the insurance yourself. This method could save you up to 10% at some offices.
• Does your dentist give a discount for referrals? If you send in your friends and neighbors, will the office give you a break on your bill? Ask what discounts might be available at your dental office to see how you might save more on your bill.

Understanding Your Dental Insurance Plan Options

The market place has provided you multiple options:

• Discount Dental Plans
• Dental Insurance
• DHMO Plans
• Capitation Plans

All of these plans have their pros and cons. Talk with the a dentist you trust to help you make the best choice to maximize your individual dental coverage need.

by Dr. Fred Sharpe