Opinion: Dental Insurance Next Industry That Badly Needs Reform

By Yaël Ossowski, Consumer Choice Center Deputy Director

In the last decade, most debate and discussion on reforms related to health care have focused on Americans’ general health insurance plans and costs. And for good reason.

And though our health system is convoluted and complicated, it gets even more complex when we examine what is happening with dental care.

The intersection of hefty insurance premiums, confusing government benefits and a red tape bonanza keep many Americans from ever visiting a dentist’s office.

Even though 80% of Americans have access to dental benefits, nearly 35% of American adults didn’t visit a dentist in 2019, according to the National Association of Dental Plans.

The reason so many neglect getting their teeth checked is clear in the data: the mounting cost. And modern dental insurance, coupled with myriad various government programs, is a big reason for that.

Unlike most health care plans, dental plans have low caps on the number of benefits they will pay out, anywhere between $1,000-$1,500 a year. Premiums average $30-$50 per month depending on the plan and the number of people covered.

Because patients use dental insurance to cover all aspects of their care, rather than emergencies, this adds to an inflation of the price of rudimentary care, a phenomenon dubbed the “social consequences problem” by economists.

That problem gets even more complicated considering that nearly all dental patients don’t choose their plans themselves.

At present, 93% of privately insured dental patients receive coverage from their employers, meaning there is little incentive to innovate direct-to-consumer options that would offer competition.

This incentive problem, along with a relatively opaque dental insurance market, means costs will continue to rise unless we can agree on simple reforms to increase competition and transparency in the dental insurance market.

To do so, state legislatures and Congress should first look to encourage patients who choose membership programs as dental plans, rather than traditional insurance. Using health savings accounts to buy these memberships, as well as pay for care, would be a huge improvement that would empower patients to contract their own care.

This would be similar to the movement of direct primary care doctors, who offer direct monthly subscriptions to patients and don’t accept insurance. Removing the insurance middleman means less bureaucracy, less red tape and more time with patients. As a plus, prices are transparent and fair. That alone would provide better competition and prices for patients in need.

This would lead to a larger decoupling of health and dental insurance from employers, allowing patients and consumers to choose the plan that works best for them and their families.

On the note of transparency, state legislatures should hold the dental insurance industry accountable with simple reforms that empower patients when choosing their dentists.

Assignment of benefits laws, already passed in states like Colorado and Illinois, allow patients to choose whether they want insurance companies to directly pay dental clinics, freeing patients from having to pay upfront and negotiate with insurance companies for reimbursement.

Similarly, network leasing regulations, allowing dental clinics to revise and opt-in to insurance networks rather than being automatically forced into them, would keep prices low and transparent, not to mention predictable before you even step into the dentist’s chair.

As legislatures look to reform health care, we should also keep in mind the growing dental bills facing Americans every day, and hope lawmakers understand the need for more competition and transparency to better improve dental care in our country.

Encouraging competition to traditional dental insurance, while promoting simple regulations to promote financial transparency, will serve to empower consumers and lower the costs of care.

That would be bold and revolutionary for patients and would help encourage innovation in a sector where it has not always been the most welcome.

Reprinted with permission from the Boston Herald. This op-ed was originally posted on July 14, 2021 at bit.ly/3CzGRfI.


The FDA thanks the Consumer Choice Center for bringing attention to these important issues. The dental insurance industry needs important reforms to protect transparency and competition for patients. We’re glad to see this additional momentum behind the work of the National Council of Insurance Legislators to reform dental insurance and protect patients.

1 comment

  1. Very true and accurate this take on dental insurance. My displeasure with most dental insurance is the capped amount of $1000-1500 (for the majority of plans) and has been that amount for the past 35 years i have practiced dentistry. As compared to average medical capped at $1,000,000 a year. Dental should be in the $3000-5000 range to actually benefit patients.

    Like

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