Dental insurance for retirees is not very affordable. Consider self-insurance.

Financial Planners


Christina Povenmire is half-retired from her financial planning career and enrolled in Medicare. She’s about to buy an add-on plan that pays for virtually everything Medicare doesn’t pay for. However, she does not have insurance to cover dental expenses.

“The cost of dental insurance is not worth the benefit,” she said.

Her views are common among financial planners and health insurance professionals who do the math on insurance choices. Because dental insurance is different from health insurance, retirees should not assume they need to have both types of plans just because they had both plans while on the job.

“People often want dental insurance for emotional reasons,” said Brian Marks, president of Virginia’s Department of Employee Benefits. When people retire and leave their workplace dental insurance coverage, “they’re afraid of paying a lot of dental bills,” he says.

But when you compare the premiums people pay each year to how much a dental plan actually covers that year, “it’s hard to get the math right,” Marks said. Plans available to retirees often cover far less than workplace plans, he said. In general, it makes more sense to pay the dentist directly without insurance coverage.

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“If you pay a premium of $900 a year and get $2,000 in coverage, then you have a two-to-one advantage,” says Katy Votava, nurse/economist and president of Goodcare.com. says Mr. “But if it’s a year you don’t need it, you’ll end up paying too much for the annual cleaning.”

Michael Adelberg, executive director of the National Dental Planning Association, doesn’t think so. He said he recently broke a tooth that cost him $4,000 for a root canal and crown. “I’m glad he had insurance,” he said. And another advantage is that the insurance company negotiates a lower fee with the dentist, so even if the individual has to pay out-of-pocket and has to cover part of the cost, the fee will be less than what the individual would receive. It will be cheaper, he added.

But people wanting protection from a major dental event like a crown should be aware of the annual limits that dental insurance pays, said Vottaba. These limits are very important and make dental insurance different from most health plans.

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People buy health insurance because they don’t know what illnesses will happen as they get older, and serious illnesses can cost thousands of dollars in treatment from doctors and hospitals each year. A patient “maximum” limit eliminates the risk of having to endure runaway costs above a certain amount.

Dental insurance coverage is just the opposite. Instead of guaranteeing dental patients that their spending won’t spike over a certain amount that year, they guarantee that the insurance company won’t spend more than a certain amount.

Votava gives a simple example of the $1,000 limit: Someone already had a checkup, x-rays, and several cleanings that year, paid for in full by their dental insurance company (probably about $400). Then the dentist delivers the bad news. A patient he needs a $2,000 crown. The insurance company has already spent $400 on him, so he only has to spend $600 to reach the $1,000 annual limit. So the person ends up spending her $1,400 on crowns, even though she took out insurance to avoid high dental costs.

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Dental insurance limits are not keeping up with inflation, according to a report by the Progressive Policy Institute. Dental services have surged 200% from 1996 to 2015, but the $1,000 limit still persists.

But limits have been increasing slightly recently, especially in Medicare Advantage plans, Adelberg said, as insurance companies use dental benefits to lure seniors in fierce competition. Currently, about a third of Medicare Advantage plans offer only basic preventive care (usually free cleanings and tests), and the remaining third have limits of $1,000 to $2,000. There is a forehead, said Caitlin Walsdorf, director of Healthscape Advisors.

Individual plans with limits over $1,000 typically charge higher premiums and copays than plans that offer only the basics. Medicare Advantage also plans to boost dental benefits to make the package of medical services work financially for insurers, and will generally boost other services such as vision and medicines, Adelberg said. said.

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Instead of worrying about dental insurance, retirees should make sure their Medicare Advantage plans cover the doctors and hospitals they need, said Jeff Goldman, an independent health insurance broker in Deerfield, Illinois. should be confirmed. “Dental benefits are no reason to do a plan,” he says.

There are even more advantageous plans. Goldman offers a Humana Medicare Advantage plan with a cap of $3,500 and a standalone dental plan ( Ameritas underwrites the GPM Dental Plan). The monthly premium is $50.72, which is higher than the typical $30.

Vottaba said it is important not only to pay attention to the annual limit imposed on dental treatment, but also to pay attention to the waiting period when purchasing dental insurance. Usually, when he retires and he takes out a personal dental insurance plan, he has to wait six months to a year for major dental costs such as crowns to be covered. The aim is to prevent people from taking out insurance after a dentist delivers bad news.

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“This is like preventing homeowners from getting homeowners insurance when their house catches fire,” said Rich Furstenberg of Mercer.

If you’re nearing retirement and think you might have a large dental bill soon, sticking with the insurance plan you had at work might help you avoid the waiting period. The costs may be higher under Cobra, but you may get 18 months of reliable dental insurance, Vottaba said.

Even those without dental insurance of any kind may have options to cut dental costs, he added. Some dentists offer discounts. Her advice is, “Before you buy dental insurance, ask if the dentist has insurance or if they offer discounts for retirees.”

Please contact editors@barrons.com.



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