Not happy with health care costs! Especially as a small business owner.
Here’s a very simple question and I’d love to get your thoughts on it. So having our own business, we carry our own insurance. But we don’t have dental insurance, because it seems that dental insurance premiums plus co-pay and out-of-pocket expenses may equal to whatever it is you’d be paying anyway, if you had no insurance at all. I talked with our dentist about it and their suggestion was to make estimated calculations to figure out whether dental insurance is worth getting at all.
And since dealing with insurance matters is my #1 most dreaded financial task (with taxes a close second), I’m not particularly excited about the prospect of shopping for dental insurance. Well it’s either that or spending $600 for each filling! With one of my kids being cavity prone (and he’s under 6), it will cost us a fortune to remain insurance-free, so we’ll have to carve out some time here to check out the alternatives. Here’s hoping that there ARE cheaper alternatives.
So if you’re self-employed, have you gotten yourself or your family any dental insurance?
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On to other financial matters. So what have I been reading this week? My article roundup today yields this great list. Do stop by and take a peek at what some of my friends are doing!
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{ 34 comments… read them below or add one }
hey ! thx for the mention… and yes you should seek for dental insurance… before they fall apart!
I ran the numbers and self-employed dental insurance was not good for me (and dental is the #1 thing I spend money on, health-wise.)
Alternatives:
#1 HSA. Saves you 30% or so right there.
#2 Most dentists will knock a huge % of their fee off if you pay cash. The fee discount should be 30% or more. If your dentist refuses to do this, shop around!
#3 If you need a lot of dental work done, it may be cheaper to fly somewhere else and have it done. Not talking another country, but since you live in a high-$ area, it’s worth it to call around. Try Stockton/Sacramento for local-ish care without the local cost!
Don’t settle for paying a lot of money for dental work. It’s not worth it.
-Erica
Erica,
Thanks for the great tips! Yes, definitely not worth the high price just to clean and do minor work on teeth. It’s hard for me to feel comfortable about switching dentists for my kids though — since she’s really awesome about calming jittery nerves (yes, even if it’s just for regular maintenance). Ugh — I’m torn about switching dentists, but I should ask about cash only options and yes, definitely should look into an HSA!
I have been a small business owner for more than 25 years and providing insurance has been unbelievably expensive. As far as dental insurance: the answer can be yes and no. For my family typically a cleaning each every 6 months and occasionally a filling here and there it was not worth the $144 per month with a maximum amount of $1,000 that the insurance company was willing to pay per person with a $500 deductible. The insurance did not cover braces at all and would only pay up to 50% of crown and bridge work and no coverage on root plaining if you had periodontal disease.
So for our family the answer was easy. No but there are so many different insurance policies out there and even discount cards which in some cases are great.
Please check out my book Save Your Money Save Your Family out in Spring 2010.
At best dental insurance is dollar swapping. You pay x in premium and you get x back in benefit. The only time dental insurance is actually good is if your employer is either subsidizing or completely paying for it. Otherwise save your money. There are a few discount plans out there that might make sense but definitely don’t buy a premium plan.
I’m an independent insurance broker. I try to talk just about everyone out of buying the dental. And don’t get me started on vision insurance!
Mike,
I’m going to have to start asking about vision insurance next! I’d love to hear more about that as well! Doesn’t help that we’re all so visually challenged.
i haven’t got dental insurance and i am not planning of getting it. luckily my teeth are made of rock
We ran the numbers last year, and used our Flex Spend money for dental checkups (no cavities!). This year we got insurance since our Flex Spend money is earmarked for a C-section.
Dollarwise it’s the same as paying cash as long as all we need are checkups (2 adults, 2 kids) and if we get them twice a year. If anyone has even one cavity though, we’ll come out ahead.
If it were just me, I would just wait till my teeth hurt.
Most people I know spend about the same on check ups as they do on dental insurance. With that said, if you have a low cost option, why not?
Just going through dental work, I did an analysis our our company plan. With a coverage maximum of $1000 anually, it cost me about $400 in annual premiums, netting $600. Since my overal bill was $2800, it only “bit into” 20% of my overall cost. For our employees though, it adds to the benefits package that helps employee retention. When you are doing an analysis of the dental coverage as part of your employee benefits package, you must factor in if it is one of the advantages you have over your competitors for retaining your key employees. It it worth it for the employer dollar for dollar: cost vs. benefit? Not really…
Growing up, my mother was self-employed and if we didn’t have my father’s insurance to cover health care costs it probably would have been extremely expensive. I can see how it can be very costly for a family (especially w/ small children) to not have the proper health care plans including dental. I think taking some time out to shop for good insurers is important as you’ll be saving money in the long-run.
No, if you go 2 times max per year just pay it in full.
SVB — if you don’t have insurance, you’re going to have to step it up in negotiations. Call around and get prices (esp. in Stockton/Sacto), then request that your dentist match them. If your dentist balks, pack it up and leave for another dentist. There are plenty of good dentists out there.
We (Americans) aren’t taught to negotiate well. It’s your money. Fight for it.
-Erica
Just canceled mine today. I’m starting to look into discount plans and dentists that will give good discounts when I tell them I don’t have insurance.
I think I’d skip the dental insurance. We pay like $40 a month and just get cleanings every six months. It seems like we don’t need it.
When you look at one definition of insurance, it is to protect against something. In this case the loss of money due to dental work. Carrying insurance is a personal thing. If you have a lot of money, maybe a plan with a high deductable is the way to go. Otherwise, normal insurance is better for the average person.
At the end of the day, I like to have insurance against the unexpected – what they may find. I would say get the insurance.
I don’t think that dental insurance is important. Our teeth has a low risk of disease..
@helpfuture,
Eh, tell that to a 60 yo without teeth and who has gum disease.
First, another alternative could be an HRA ( Health Reimbursement Account). Similar to an HSA, but you as the employer would contribute to each employee’s account.
You could also invest in yourself. There are plenty of home-care dental kits. Promoting strong, and consistent, cleaning habits will limit the number of times you’ll need to take your kids to the dentist.
Second, I was a little surprised with this thread. Erica offered some good suggestions, then dropped the ball with “It’s not worth”. What followed was a string of “not worth” responses until basicmoneytips re-focused the attention.
Preventive care reduces the likelihood of larger problems later in life. Insurance against rainy days provides just that. If you’re waiting (insurance-less) for that rainy day, it will be a monsoon when it comes.
If I told you to let your kids’ teeth rot and wait to get dental insurance when their adult teeth come in, you’d think I was nuts! But that’s essentially the same argument.
I really hope I’m misreading people’s comments. If not, let me say this:
your HEALTH is MORE important than your MONEY.
I understand FinEngr’s point but I didn’t take most commentators to mean don’t get regular preventative work or other dental work done.
We recently faced the same decision. After looking at the numbers, we decided to self-insure. What that means for us is, instead of paying a monthly premium to an insurance company, we’re putting that same amount aside in our budget for dental self-insurance. We’ll still all get regular 6-month check-ups and still get all necessary dental work done and we’ll pay “out-of-pocket” for all of it.
When trying to decide whether or not to get insurance, I asked at the dentist’s office what they thought. They were the ones who pointed out that for a lot of people insurance doesn’t make sense due to the very low annual maximums. Last year we had dental insurance through my employer. The kids and I all had our regular check-ups; I needed my first two root canals and crowns. We ended up paying for all but $200 of the work out-of-pocket due to the very low annual maximums.
If all we need are regular check-ups, then we’ll end up spending less than what we would have paid out in premiums. If we have a bad dental year, we’ll have money set aside to pay for it. I’m sure there are less-expensive dentists in our area but I really like this dentist, and trust him. He does give a discount for cash and a smaller one for credit cards on all bills over a certain value paid in full. I’ll just make sure we all schedule our cleanings at the same time so we qualify for the discount.
If dental insurance maximums weren’t so ridiculously low, it would more likely be worth it but in most cases I think it’s an unsound allocation of funds.
Thank you to all commentators for pointing out the pros & cons. We own a small window screen company in LA and are considering the dental insurance option for ourselves & employees. It is definitely a fine line of economics to consider, especially in these times. If we can’t offer all the premium benefits of a big company, then which ones are worth it?
Good luck to all.
I can’t speak to costs for small business owners, but my company’s plan is great. A single person pays about 8 bucks a month. I’ve unfortunately had some issues that resulted in gum surgery and crows and maxed out the benefit quite a few times. I saved a ton of money.
Yes, things are going quite a bit better now
I now go three times a year for cleanings to make sure no problems pop up. The insurances only pays for two, so I pay for the third out of pocket – but the peace of mind is worth it. Gum surgery (taking a chunk from the roof of your mouth and sewing it into your gum line while under local anesthesia) is something to avoid if you can.
Our insurance and deductible costs the same as twice yearly checkups and cleanings, so if we don’t have any problems it’s a wash. We save more than we pay in the years that we have x-rays. In my mind we’re ensuring against bigger problems and just enforcing the six month cleanings. If we paid for it through insurance, we’re going for cleanings!
Something no one has discussed: The self-employed can deduct the cost of insurance, including dental. It’s a straight deduction, right on the 1040. So we’re essentially saving 15% on the cost of insurance. Add that to our HSA savings for deductables (another 15%!) and the picture starts to look much nicer. If you’re in a higher tax bracket it’s even sweeter.
It’s not a simple yes or no answer – there’s a lot to consider when you do the math!
Getting your teeth fixed is just plain expensive it seems like. I have spent a fortune on teeth in the past year, and I wonder if any of the stuff you guys are talking about applies to the UK?
I get my dental work done at the local dental school. It costs about $50 for a filling which is less than what I would pay elsewhere with dental insurance. The main drawback to going to the dental school is that they work slowly, but the trade-off is well worth it to me.
Dental insurance is a misnomer. With insurance (health, auto, life, home) we all pay a little so that the unlucky few have their big cost covered. Dental is a benefit plan that an employer may purchase for you (if you’re lucky). Everybody is eligible for cleanings, xrays, exams, and then a discounted rate (20-50%) on any work up to a limit (1000-1500 annual typically).
Obviously, I’m simplifying as some people will need root canals and extractions while others won’t. But the $$ use variance is much smaller than for medical where we have many healthy people and a few with massively expensive conditions/accidents
So a typical dental plan costs the employer the benefits plus the overhead and profit of the company that sold it to them. This is why larger companies will underwrite their own employee plans.
Theoretically, it will be cheaper for self-employed people to pay the dentist cash over the long haul as you eliminate the middleman taking a cut. This is why you find it so hard to find dental “insurance” that makes any sense to purchase.
Do the dental insurance, trust me!
Like any insurance that you don’t have to have it’s a tough one to decide. My personal advice has always been that it’s always best to be prepared for the worst and be insured, you never know when you’ll need it!
Well, my recent visits this past week were of the “emergency or catastrophic” variety and that made me glad I still have dental through COBRA. I currently pay $20/month for coverage and surprisingly no longer pay a deductible. This gives me about $260 worth of insured basic cleaning per year, just a $20 savings over not having insurance.
This recent round of seeing the dentist ($100, exam and xrays), the oral surgeon ($300) and the associated equipment (2 mouthguards, not covered) really put me on the side of insurance this year.
OTOH, my dentist instructed his assistant to bill a 10% discount on the first ‘guard, and a 50% discount on the second ‘guard so I’ve paid ($315+$125 =$450) instead of ($350+$250=600 for ‘guards, +$400 for exams = $1000). The cash discount can makes a big difference, if you can get the discounts hammered out ahead of time on the routine stuff as well.
I am self-employed, and I don’t have dental insurance. I haven’t gone to the dentist in over 3 years though, and I think that is pretty bad. I know I should go, but money is kinda tight right now.
Ah. I can relate as to how difficult of a decision this is to make. I used to call it “dental roulette”.
For the most part it seems, especially if you have kids, that dental insurance is unfortunately a necessity. You have to be prepared. However; in the end there is still the fact that you may end up paying more than you would have overall if you had just paid per procedure, but that is the price of knowing that you’re covered.
I stopped playing “dental roulette” about a year ago. I’m paying a lot, but I can sleep easier at night now!
The challenge with dental insurance is that the maximum amounts the insurance company will pay out are usually fairly low, so for reconstructive dental work you will usually end up paying for a good portion of it yourself. For the more routine dental work, you can easily self-insure.
With that said, if you can find a good policy with a reasonable maximum, solid benefits and fair premiums, then it may make sense.
The comments have been great! Most dentists will offer a discount for cash, also if you know of any dental schools or dental hygiene schools, they will do checkups and cleanings for free or very inexpensive. Some schools even do the necessary work that needs to be done!
I need denal work done…should I buy dental insurance or not?