Flexible Spending Account (FSA)
Orthodontic Dental Insurance
Dental insurance provides coverage to a myriad of dental services including braces and orthodontic care. As with any type of insurance, a monthly or yearly premium is paid to the insurance carrier in order for the patient to receive these benefits. Also, each insurance carrier establishes their own eligibility rules and regulations on how and when a patient can use this orthodontic benefit. In addition, some plans may or may not cover dependents.
For orthodontics, most, if not all plans have a lifetime maximum amount that the carrier will pay for treatment. This is typically anywhere from $750 to $4000 and the patient is responsible for the remainder of the orthodontic cost. In addition to the lifetime maximum amount, some plans have a deductible (the initial amount paid solely by the patient) that must be reached before the carrier will begin paying a certain percentage of the fee up to the lifetime maximum. This percentage of the total treatment fee covered varies greatly with different carriers and even within different plans from one carrier.
The total amount paid, regardless of the percentage, will never exceed the lifetime maximum. Usually, the plan will state that it will cover 50% of orthodontic costs up to the lifetime maximum of the plan. Plans also may limit coverage based on age or their definition of adult. Certain plans will not cover patient that begin treatment after the age of 19. They may also stop payment of the benefit for patients in active treatment if that patient exceeds a certain age.
Unlike medical insurance, orthodontic insurance plans do not require copays for each visit. They also do not exclude patients with pre-existing conditions. However, certain procedures may be excluded from coverage such as orthognathic surgery, repair of appliances, and other services that the insurance carrier views as inappropriate and unnecessary.
In-Network vs. Out-of-Network
In-Network Orthodontic Offices
Certain insurance carriers also have negotiated discount rates with orthodontic providers for care. In exchange for being placed on the insurance carriers’ preferred provider list or in-network list, the orthodontist agrees to treat patients at the agreed upon fee structure. These offices are referred to as accepting assignment.
In-Network orthodontic providers receive payments directly from the insurance carrier to their offices. This reduces the hassle for patients to account for the insurance payment. Another advantage may be the speed of submitting the claim, since orthodontic offices may do so electronically to the insurance carrier. Once the claim is processed, an Explanation of Benefits (EOB) will be mailed to the orthodontist and the responsible party. An EOB provides details on the exact amount that the insurance carrier will pay. The benefit will then be either mailed or electronically deposited to the orthodontic office accounts receivables. The difference between the total orthodontic fee and the insurance benefit is the responsibility of the patient.
Out-of-Network Orthodontic Offices
Out-of-Network orthodontic offices do not accept assignment of benefits. The orthodontic benefit can be paid either directly to you or directly to the orthodontic provider. The processing of the claim is similar and both have its advantages. Orthodontic providers that do not accept assignment of dental insurance payments allow the payment to go directly to the patient. Therefore the patient is responsible for payment to the office. This allows the patient to accurately track the amount of benefit that he or she is entitled to under their plan. The office or the patient can easily find out the eligibility rules for their plan by contacting their insurer or going online.
To receive your benefit, a claim must be submitted to the insurance carrier. Claim forms may be obtained from the carrier or at the orthodontic office. Some offices will fill out and submit the claim forms for you. Other offices may only fill out diagnostic and treatment information and leave the rest of the form for you to fill out and submit. The benefit will be mailed to whichever address is listed on the submission form.
Upon receipt of the claim, the insurance carrier will then process the claim and mail an EOB to the orthodontist and the patient. The EOB provides details on the exact amount that the insurance carrier will pay. The remainder of the orthodontic fee is then the responsibility of the patient or the responsible party. This amount may be adjusted from the initial estimate provided by the orthodontist once the accurate reimbursement amount from the insurance EOB is revealed.
When does the insurance company pay the benefit?
Insurance benefits can be paid by the insurance carrier in a variety of time frames, amounts, and methods. Payments can come as a lump sum, monthly, or quarterly. The payments may also arrive automatically from the insurer or may need a periodic claim submission by the orthodontic office. They may also arrive by direct deposit or by mail.
Many patients may be covered under two dental insurance plans with orthodontic benefits. This occurs primarily for children with two parents or responsible parties that have two different insurance plans. One policy is always viewed as the primary policy while the second policy is the secondary.
The determination of the primary policy is based on which policy holder has the earliest birth date during calendar year. The claim is submitted to the primary insurance carrier to determine the amount of benefit that primary insurance carrier will pay. Once an EOB is mailed to the responsible party and the orthodontist, a new claim is submitted to the secondary insurance with the EOB from the primary insurance carrier. The new claim will have a treatment fee that is adjusted based on the amount paid by the primary insurance.
The orthodontic benefit paid from the secondary insurance varies greatly under the insurance carrier’s rules. While some secondary insurance carriers will pay the full orthodontic benefit, other will pay a percentage to none of the stated benefit due to the primary insurance payment.
Most contracts have one responsible party that will pay for the balance of the treatment fee that is not covered by the insurance. Some patients have two responsible parties splitting the total treatment fee, such as divorced parents. Some offices will set up two accounts but many will require both parties to sign the financial contract in the full amount. The main reason is that if one party fails to pay their portion, the doctor cannot simply do half the job. Therefore the responsibility of payment will be on the responsible party.
A 14 year old female is seeking orthodontic treatment with one parent that has orthodontic benefits with their dental insurance.
Parent (not necessarily the one with the orthodontic insurance coverage)
Cost of Orthodontics
Initial Exam / Consult $0
Orthodontic Records: $300
Treatment Fee: $5000
Retention Fee: $700
Total Fee: $6000
Lifetime maximum: $1000
Percent coverage: 50%
Age Limitations: No coverage for those older than 18
First a claim is submitted to insurance for records. The first $50 dollars is payable by the insured (deductible). Therefore, a $300 claim, less $50 will result in a $250 claim, payable at 50%. Your plan will cover $125.
Second claim submitted to insurance for the treatment and retention fee. Total of the claim is $5700. Your deductible has been met, therefore the plan will pay at 50% up to the lifetime maximum which is $1000. They have already paid $125 toward records. Therefore, the total payment will be $875. The remaining balance is paid to the office by the responsible party. The total payment will never exceed your lifetime maximum.
In-house Financing with Insurance
$6000 Total Treatment Fee
-$500 out of pocket down payment to the office
-$1000 Insurance benefit
= $4500 Remaining balance
In-house payment plan: $187.50 per month over 24 months
For patients that would benefit from orthodontic care, there are numerous methods to make treatment financially viable. The examples above illustrate how the system works for self pay, employers, or third-parties in financing orthodontic care.
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Dr. Yue is a Board Certified Orthodontist practicing in Chicago, Illinois. Read more about Dr. Yue.