Insurance Discount Plans: Good, Bad or Ugly?

The mere mention of dental insurance discount plans tends to elicit an immediate frown of dislike from many dentists. The sentiment which quickly comes to mind is “Why are we giving these patients a discount if insurance isn’t paying for anything?” Fair question.

So, let’s dig into the topic a bit, and surface the facts… the Good, the Bad and if warranted… yes, the Ugly!!

Benefits to the Insurance Company

Ok, so this one is easy. Many large insurance companies offer discount plans as a low-cost alternative to traditional PPO insurance plans. They are usually the least expensive form of dental benefit a patient can purchase as they come with no benefits, just the access to the discounted fees.

Discount plans are not true insurance as there are no claims or reimbursements made. The patient simply pays a monthly premium to the insurance carrier to get access to the network discounts available from a traditional indemnity plan. Then the patient pays 100% of the network discounted fee directly to the dentist for services rendered.

The insurance carrier gets the monthly premiums up front, and that’s that. Great for the insurance company! But what about the patient or dentist?

Benefits to the Patient

As the least expensive form of insurance, discount plans provide a simple benefit to patients with a lower income level. Premiums are often a fraction of those of traditional insurance, so these are great ways to get access to the discounted fee schedule. 

Benefits to the Dental Office

Granted, you can clearly see what the insurance company and the patients get out of the discount plan, but what about benefits to your dental office. Are there any? You may be surprised to find that the answer is usually “yes.”  

If you are an “in-network” PPO provider, you likely signed a contract to honor a discounted fee schedule which you would accept for all patients who carry that insurance. The incentive for you to sign that contract and agree to discounted pricing was to be advertised as a preferred provider with that carrier and therefore have access to a wider network of potential patients. (let’s remember that 65% of all patients carry dental insurance of some form so there are lots of potential patients to attract)

But let’s be honest. Along with that privilege, for most PPO dental insurance plans, there are some challenging aspects… sometimes “the Bad.” Along with hopefully attracting more patients, the office also must add an extra layer of time, expertise, paperwork, and procedures such as:

• Call up front for insurance verification and breakdowns on every patient, every visit
• Complete very detailed insurance claim forms for every patient, every visit
• Deal with waiting periods, frequency limitations, information requests, denials, disallows, etc.
• Wait for reimbursement for 15 … 30 … 60 … 90 days.

Yes, rings all too true, doesn’t it?! 

Discount Plans are Different

With that backdrop, you might now appreciate the simplicity of a dental discount plan. 

For the same level of discount, the services you provide to a patient with a discount plan:

• Require no phone call for verification or breakdown, saving time
• Have no additional documentation or claim to file
• Have no waiting periods, frequency limitations, disallows, denials to worry about
• Estimates are 100% accurate because we just work off a fee schedule
• Treatment plans are instantaneous

And the best part is we get paid TODAY by the patient!

Since you’ve already contracted for a reduced fee schedule, seeing a patient holding a discount plan from that same carrier is like a breath of fresh air. Discount plans are somewhat like being “Fee for Service” just with a discount. They are so much easier to manage!

Your front office team members probably much prefer working with discount plans vs. other types of insurance plans. Their first thought is likely relief, not frustration.

Bottom line there really is no ugly here. Discount plans are not common, they do provide a benefit to a certain slice of the population, they are actually very easy for your team to administer, and you get paid immediately. 

There are many other aspects of dental insurance that are worth an immediate “frown” … don’t let this be one of them!