Traditional dental insurance and a dental savings plan (DSP) are two common options for reducing out-of-pocket dental costs. Understanding how these distinct financial tools work and whether they can be used together is a frequent query for those trying to optimize their oral health budget. This article provides a clear answer regarding their compatibility and outlines practical strategies for maximizing the benefits of both systems.
How Dental Insurance and Savings Plans Differ
Dental insurance functions as a contract among the patient, the provider, and the insurance company, involving a monthly premium payment. This model typically includes an annual deductible, which the patient must pay before coverage begins, and an annual maximum limit on the total amount the insurer will pay out in a given year. Coverage is defined by specific percentages (e.g., 100% for preventive care, 80% for basic procedures, and 50% for major services), with the insurer paying the provider directly after a claim is submitted.
A dental savings plan, on the other hand, is a membership program, not an insurance policy. It requires an annual fee, which is often lower than total insurance premiums. Members receive a fixed percentage discount (typically 10% to 60%) off the provider’s usual fee schedule, and the patient pays the discounted rate directly at the time of service. DSPs do not involve deductibles, claims processes, or annual maximum limits on savings.
Applying Both to the Same Procedure
The core answer to whether both can be applied to the same dental bill is no. This prohibition stems from the distinct financial structures of the two systems and the contractual terms enforced by providers and plan administrators. A patient must choose to use either the insurance or the dental savings plan discount for a single service.
This restriction is in place because allowing both would violate the “coordination of benefits” principle, designed to prevent a patient from profiting from a dental service. Insurance companies pay benefits based on a negotiated rate, often referred to as the Usual, Customary, and Reasonable (UCR) fee. A DSP discount, however, is applied to the provider’s standard fee.
If a DSP discount were applied to the remaining balance after the insurance payment, the patient could potentially receive a discount greater than the provider’s actual cost. Once an insurance claim has been filed and processed, the DSP discount cannot be retroactively applied to the co-pay or deductible portion of that same claim. This strict separation ensures the integrity of the pricing agreements.
Maximizing Your Coverage Strategy
While simultaneous use on a single procedure is prohibited, owning both insurance and a DSP can be a powerful financial strategy when utilized for different purposes. The most common strategy is to leverage the DSP after the dental insurance annual maximum has been reached. Since most plans have an annual cap (typically $1,000 to $2,000), the DSP becomes invaluable for necessary procedures scheduled for the remainder of the year, allowing the patient to continue receiving discounted care.
DSPs are also effective for procedures that standard dental insurance policies routinely exclude. Services like cosmetic treatments (e.g., teeth whitening or veneers) and specialized procedures (e.g., implants or certain types of orthodontics) are frequently not covered. In these cases, the DSP can be used to secure a substantial discount on the entire cost of the elective procedure.
Another strategic use involves bypassing the waiting periods often associated with new dental insurance policies, especially for major restorative work. A DSP can be used immediately upon activation, typically within 72 hours, allowing a patient to receive necessary treatment without delay while waiting for the insurance coverage to fully kick in.
For families, it can be beneficial to use the insurance for members requiring extensive, costly procedures, and the DSP for members who only need routine or minimal care, depending on which system offers the best net savings. The optimal approach is to calculate the final out-of-pocket cost for each specific procedure under both the insurance and the DSP before the appointment to determine the maximum savings.