Dental Plans: Why Americans Are Paying More For Less

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Dental Plans: Paying More For Less?
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Dental Plans: Paying More For Less? (ABC News)

With all the attention paid to affordable health care, experts say standard dental coverage has changed little over the last 20 years while leading to greater out-of-pocket costs for consumers.

As with the rising costs of overall health care, many times only the wealthiest have access to important dental care.

Dr. Paul Glassman DDS, professor of dental practice and director of community oral health at University of the Pacific, said dental benefits and the cap on dental health plan benefits have not changed much in the past 20 years. But the cost of dental care has increased "dramatically."

"A plan that covered $1,000 used to get a lot," he said. "Now if you have an exam and get fillings, you've used your maximum."

As a result, more people are paying out of pocket if they want additional work done, he said.

And those who struggle to afford oral health care may find even more problems down the line, with gum disease possibly contributing to ailments like diabetes and heart disease.

Real out-of-pocket dental expenditures increased to $332 in 2008 from $270 in 1996, according to the American Dental Association's (ADA) report published in April called, "Breaking Down Barriers to Oral health for All Americans: The Role of Finance." The ADA said the figure dropped to $323 in 2009, but "this likely reflects the state of the economy, rather than any improvement in dental benefits."

Real per capita expenditures on overall personal health care reached $6,819 in 2009.

Glassman said a number of issues have contributed to dental care's higher costs. One major reason is that labor costs have increased in dental offices.

"Despite the recession, demand for their services was pretty good," he said. "So they were able to raise prices and still be able to have busy practices."

Sen. Bernie Sanders, I-Vt., introduced a bill on Thursday called the Comprehensive Dental Reform Act of 2012 that tries to fill the gap for the 130 million Americans who have no dental insurance.

Medicare covers almost no dental care, and no dental services for the elderly. Medicaid dental benefits vary by state and are often only for the most dire emergencies.

Part of the bill proposes pilot programs for dental therapists, who would have more training than dental hygienists, to perform certain procedures. So far, Alaska and Minnesota allow some dental therapists to provide procedures that only dentists are permitted to do elsewhere. Sanders' bill authorizes National Health Service Corps loan repayments for individuals licensed by a state as dental therapists.

The American Dental Association has opposed this provision of the bill, telling Sanders in a letter that "only dentists can diagnose, develop treatment plans and provide complex treatment."

"Only 20 percent of the nation's practicing dentists provide care to people with Medicaid, and only an extremely small percentage devote a substantial part of their practice to caring for those who are underserved," Sanders said in a statement when he introduced his bill in Washington, D.C. "This bill addresses this by creating an incentive to increase Medicaid reimbursement rates for dentists by assisting the states in covering those costs."

President Obama's Affordable Health Care Act, which will roll out by 2014, will impact some dental policies, such as small group and individual market policies.

"Almost no states cover dental benefits now," said Glassman. "Adults who are low income are almost out of luck in terms of having benefits now."

Burton Edelstein, pediatric dentist and Columbia University professor of dental medicine and health policy and management, said the basic design of dental plans has not changed dramatically over the past 20 years. He said dental plans are "essentially pre-paid dental benefits, rather than risk-shared insurance per se."

"The industry uses the term pre-paid dental plan," said Edelstein, also the founding president of the Children's Dental Health Project in Washington, D.C.

Dental plans are foremost intended to promote the prevention of serious dental problems and greater costs down the line. The classic design is the 100-80-50 plan, which covers about 100 percent of preventive and diagnostic services, about 80 percent of dental repair services and 50 percent of advanced services.

Unlike medical insurance, in which one person needs an appendectomy and everyone chips in, most people need dental services. Because much of dental care is predictable, that creates challenges for the insurance industry to write dental policies, said Nancy Metcalf, senior program editor with Consumer Reports. The insurance industry overall, after all, makes money when people don't use services.

So, what's the most affordable dental plan for someone who needs three root canals?

"My reply is there isn't one," Metcalf said.

"Some proportion of people use services and it's the non-utilizers in the group who offset the costs for utilizers," Edelstein said. "Otherwise there are no savings really to be had."

Data from the National Association of Dental Plans' member companies show that the average premium has not changed significantly in the past few years.

The monthly average individual premium for dental preferred provider organizations (DPPO), the most common plan type, rose to $24.97 in 2011 from $23.98 in 2009. The monthly premium for dental health maintenance organizations (DHMO) increased to $13.55 in 2011 from $13.14 in 2010. The association's member companies represent about 25 percent of all commercially covered people in the U.S.

The American Dental Association (ADA) says three economic forces are creating the "perfect storm" that is reducing the number of U.S. families with any dental coverage. The ADA, which has more than 157,000 members, published a report in April, "Breaking Down Barriers to Oral health for All Americans: The Role of Finance."

The first out of the three economic forces is unemployment, namely the 12.7 million Americans without jobs who have lost their private insurance coverage.

The second is a "steady reduction" in the percentage of firms providing dental benefits. The ADA says about half of companies offering health benefits also offer dental. But fewer companies are offering health benefits.

The third force, according to the ADA, is that firms are shifting costs to consumers to pay out of pocket. Because of the economic downturn, employers are reducing the scope of coverage or increasing the amount workers pay for third-party private benefits, the Kaiser Family Foundation and the Health Research and Educational Trust reported in a 2010 survey.

From 2000 and 2010 the general CPI increased 127 percent. Meanwhile, the consumer price index for dental services rose 154 percent over that period - twice as fast as rate of inflation in the last decade, according to the Bureau of Labor Statistics.

In 2008, total dental expenditures accounted for $30.7 billion or 22.2 percent of total out-of-pocket health expenditures, second only to prescription medications, according to a report by Glassman.

One recent movement in health care payments reform that focuses on health outcomes as opposed to the number of visits or procedures is beginning to gain traction in dental care, Glassman said. The idea behind that reform is moving to a value system, instead of a volume system.

That movement may address the rising out-of-pocket costs for dental patients.

"Dental care is almost entirely volume-based and people are looking to how you can make it value-based."

One of the barriers to this system is that dental care is divided among many large private insurers and dental practices are without the capacity, funds and political will "to establish meaningful quality improvement programs," according to Glassman.

About 50 percent of the population has private insurance, Glassman reports.

Edelstein said under current and proposed legislation, states and the federal government can develop plans to provide more intensive dental care to those with greater needs and less to those who don't need it.

"This would be a meaningful and new advancement in dental coverage that would better align benefits with needs and replace the "one size fits all twice a year checkup" design that now predominates," Edelstein said.

Whether you have an employer subsidized dental plan, there are some steps you can take to make sure you are getting the most affordable dental care you can:

1. Many experts suggest seeking low-cost dental care, such as through Federally Qualified Health Centers.

Sanders' bill proposes increasing funding for oral health services at these public clinics, which have a sliding pay scale, and for school-based dental services. He also proposes new funding for mobile and portable services.

Glassman is also a proponent of telehealth services in which dentists could provide remote supervision and collaboration without seeing every patient in person.

2. Put money in a health savings account (HSA).

Nancy Metcalf of Consumer Reports said she often discourages people who do not have subsidized dental plans from getting individual dental coverage.

"You're probably better off if you have a HSA [health care spending account] by tucking money in there," she said.

Consumer Reports readers who are insured said the average cost of a filling was $141. For those who were uninsured the average cost was $288. The average cost of a tooth implant for an insured person was $2,825, while those who were not insured was $3,938.

3. Research and negotiate prices.

Metcalf said HealthcareBlueBook.com allows people to look up prevailing prices for local services.

"Call up the dentist and make a deal with them," she said. "Say that you'll go to them for a root canal for $1,000. You're probably going to do just as well if you don't have dental insurance."

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