Dental discount plans have been around for a number of years. However, they have become increasing popular in recent years. The reason is that dental discount plan are less costly for the patient and they are less hassle for dentists.

What is a Dental Discount Plan?

Dental discount plans (also marketed as dental savings plans) provide members with reduced rates for dental procedures. These rates are based on fee schedules issued by the discount plan itself. Dental discount plans are similar to Sam’s Club or Costco memberships, where members pay an annual fee for access to reduced rates. The reduced rates are usually anywhere from 25 to 50% of the UCR (Usual, Customary, Reasonable) or “cash” rate charged by the dentist. These reduced rates are usually very competitive with the contracted rates provided by dental insurance companies.

How Does a Dental Discount Plan Differ from Dental Insurance?

The main difference between a dental discount plan and insurance is that dental insurance usually pays a percentage of the contracted rate up to the yearly maximum after any applicable deductible. For example, a dental insurance plan may provide a benefit of 50% payment on the contracted rate for a crown. Thus, the patient is only responsible for half the contracted rate for the procedure. Therefore, (and greatly simplified) if the contracted rate for the crown is $750, the patient should expect to pay about $375 in total out of pocket. In order for a dentist to obtain the remaining benefit (the other $375 in this example), he or she must submit a claim to the insurance company.

Dental insurance is beneficial to the patient because it usually minimizes the patient’s out of pocket cost at time of service. It is beneficial to the dentist because the less a patient owes up front, the more likely they are to accept treatment and same-day care. However, dental insurance if also subject to a variety of limitations including waiting periods, maximums, missing tooth clauses, alternate benefits and procedural frequencies. Further, as stated, dentists must file claims directly with the insurance company (which often requires x-rays, narratives, etc.) to receive payment.

Dental discount plans avoid most of these concerns. There are none of the limitations listed above. Discount plan members are simply responsible for the full contracted rate. Thus, if the contracted rate for the crown is $750, the patient owes $750. The savings they receive is the difference between what they would have spent if they paid UCR (say, $1100) and the contracted rate under the discount plan. Thus, while insurance offers the discount and the added benefit payment, discount plans simply offer the discount.

A benefit of discount plans to dentists is the fact that claims never need filed. Further, there are rarely any plan limitations. The dentist simply must remain in network.

Why Would Patients Choose Dental Discount Plans Over Dental Insurance?

Patients lucky enough to have dental insurance through their employer will almost always prefer dental insurance because it usually reduces total out of pocket cost. However, patients not having dental insurance through their employer often find being self-insured costly. Self-insured patients can expect to pay up to $50 or more per month to maintain dental insurance. Thus, the risks often outweigh the benefits because many patients might never end up using all their benefits each year.

Given the cost of dental insurance, many patients seek out dental discount plans because the monthly subscription is normally anywhere from $9 to $25 a month. Further, they can use their plan immediately as there are no waiting periods before a member can have “access” to use of the plan. Also sign up is much quicker. It can usually be completed online in about 10 minutes.

Why Should Dentists Accept Dental Discount Plans?

There are a multitude of reasons dentists should accept dental discount plans. First, there are hundreds of discount plans competing for enrollees. In fact, the market is so competitive that nearly all the major dental insurance carriers are in the dental discount plan game. They have also entered this market because the benefit of quick and easy enrollment at a fair price has proven desirable to patients.

Second, patients actively purchasing discount plans are doing so because they have a known dental concern and expect to spend money. Patient’s signing up for dental discount plans often know dental work is expensive, understand that they have a fair amount of dental work complete and are prepared to pay for that treatment when they visit your office.

Third, dentists do not have to worry about any claims processing headaches with dental discount plans. They simply stay in network, agree to charge the contracted rates and collect money at the time of service. There are no hassles with claim forms, x-rays, narratives and insurance underpayment.

Finally, it makes sense to appeal to a large segment of the market if you wish to attract patients and grow your practice.