As a patient, one can end up paying the complete cost of a dental service if one is not covered by dental insurance. Armed with insurance coverage, one can be assured of lowered costs because insurance organizations negotiate with the dental practices within the network to offer coverage along with lower costs for any dental service.
Dental plans help to protect patients from expensive treatment costs arising out of dental billing services. Depending on the provider, one can maximize coverage for preventive or restorative care by choosing plans accordingly.
While opting for a plan, one needs to know that the entire amount is not always covered. One needs to understand how plans work with components such as deductibles, coinsurance, or copayments.
What do copayments mean?
A co-pay dental plan is when a patient needs to pay a flat or a fixed amount for a service rendered by the practice. For such plans, the fees for services and procedures are bound by a predetermined fee structure between the dentist and the insurance company.
As per a copayment plan, a practice agrees to use the finalized fee schedule and hence a patient knows exactly what needs to be paid for any particular service or treatment. Payment needs to be made only for the difference between the stipulated fee and the amount covered by insurance.
The benefit of such plans is that one has prior knowledge of the billing amount even before treatment begins. Certain plans may include affordable premiums or no annual maximum limits.
Waiving the copayment amount
The waiver of a copayment amount can be considered to be an insurance fraud and violation of the law. A dentist can be fined or might even be debarred from continuing to practice.
Both the patient and the dentist need to sign on the claim form that is sent to the insurance organizations. It has to state all the services that were offered and the total amount payable. The insurance company processes its portion of the payment based on the assumption that the balance amount gets paid by the patient.
How does coinsurance work?
Coinsurance dental plans charge a predetermined percentage of the agreed fee of the dental practice that the patient would have to pay once the deductible amount has been paid.
Patients can find the percentage values on the dental plan summary. Generally, the percentage amount differs as per the category of service required by the patient and this can be confirmed by checking with the plan summary.
Consider a case where a patient needs a basic procedure that costs USD 150 and the plan covers 80% of the cost. If the deductible has already been covered during the year, then the amount covered by the insurance company would be USD 120 while USD 30 would be borne as out of pocket by the patient.
The deductible is the annual amount that is paid to the dentist by the patient before the insurance plan comes into force. Coinsurance plans can vary depending on the package and services needed by the patient.
One can understand how coinsurance works for a typical dental plan as per the example below.
Let us evaluate a procedure such as a root canal that could cost USD 1000. If the deductible is USD 100 and the plan covers 80% of the cost, then the apportionment of costs will be as follows
For some coinsurance plans, patients might have to pay 10% for certain treatments while a complex procedure may need a patient to pay 40% of the cost.
Major differences between Copayments and Coinsurances
| Aspect | Copayment (Co-pay) | Coinsurance |
| Definition | A fixed amount paid for a dental service. | A percentage of the cost of a dental service that the patient pays after meeting the deductible. |
| Payment Structure | Flat or fixed amount per service, based on a predetermined fee schedule agreed upon by the dentist and insurance company. | A percentage of the total cost of the service, varying based on the type of service and the specific dental plan. |
| Cost Predictability | High predictability, as patients know the exact amount to be paid beforehand. | Less predictable, as it depends on the total cost of the service and the percentage covered by the plan. |
| Deductible | Not directly related to the copayment. The copayment is a fixed amount regardless of the deductible. | The patient pays coinsurance only after the deductible is met. |
| Plan Variability | Generally consistent within a specific plan. | Varies significantly based on the plan, with different percentages for different types of services. |
| Budgeting | Easier for patients to budget for, as the amount is fixed. | Requires more careful budgeting, as the cost depends on the actual service prices. |
| Premiums Relation | Copayment amounts are not typically related to the premium cost. | Plans with higher premiums often have lower coinsurance rates, and vice versa. |
| Legal Considerations | Waiving copayments can be considered insurance fraud. | Not applicable as coinsurance is a percentage of the service cost. |
Each dental plan has its advantages and a customer needs to evaluate plans based on personal requirements and budgetary constraints. Plans with higher premiums will have a lower coinsurance amount and vice versa.
The present financial state and the quantum of work needed during the year should be parameters for the finalization of any plan.
