Dental savings plan vs. dental insurance for self-employed people

Being self-employed means you buy your own coverage. That changes how you look at dental care costs. Two options come up most: dental discount plans and traditional dental insurance. Each one works in a different way. Knowing the difference can help you keep more money in your pocket. 

What you will learn in this article: 

• A dental discount plan gives you lower rates from dental providers in its network, but you pay the dental provider yourself. 

• Traditional dental insurance pays part of your covered costs based on the plan’s rules. 

• Deductibles, annual maximums and other costs vary by plan. 

• Before you choose, add up the plan fee or premium and what you may pay for dental care. The lower total may be the better choice. 

If you’re comparing a dental savings plan with traditional insurance, schedule an appointment with an Aspen Dental provider. Your care team can review your dental needs and estimated costs so you have real numbers to compare before choosing a plan. 

How dental discount plans work 

According to the American Dental Association (ADA), a dental discount plan is not insurance. The company offering the plan works with a group of dental providers who agree to charge lower fees. You pay the dental provider directly at the plan’s reduced price, and no insurance claim is filed.¹ 

The exact costs depend on the plan. Before joining, check what you must pay for the plan, which dental providers take it and what each service will cost. 

Here is a quick picture of how the costs may break down: 

• Plan cost: Add any fee you must pay to join or keep the plan. 

• Reduced rate: Participating dental providers charge the price set by the plan. 

• Your share: You pay the dental bill yourself at the reduced rate. 

• Dentist list: The reduced prices apply when you use a participating dental provider. 

Who this tends to suit 

A discount plan can work well if the savings on the care you expect to need are greater than the cost of joining the plan. 

It may also work if you want a simpler payment process without insurance claims. Before signing up, ask your dental provider which discount plans they accept and what your expected care would cost. 

How traditional dental insurance works 

Traditional dental insurance includes several kinds of plans, so the exact rules vary. You may pay a monthly or yearly premium. When you receive covered care, the plan pays part of the cost based on its terms. The ADA explains that traditional insurance usually pays a percentage of the plan’s approved fee for each service. Its examples of common plan designs also include deductibles and annual maximums.¹

• Premium: A set amount you pay each month or year to keep the plan active. 

• Deductible: An amount you may need to pay before the plan starts sharing certain costs. 

• Annual maximum: The most the plan will pay during a plan year, if the plan has this limit. 

• Coverage percentage: The share the plan pays for a covered service. 

• Network: A group of dentists who have agreed to the plan’s terms and rates. 

Who this tends to suit 

Insurance can work well if your dental needs are light. If you mostly need cleanings and X-rays, and your plan covers preventive care well, your out-of-pocket costs may stay low. 

It can also help if you need a larger procedure. The plan may pay part of the bill based on its coverage rules. 

If your plan has an annual maximum and you need a lot of care, you may reach that limit. You would then be responsible for costs the plan no longer pays. 

The real cost question for self-employed people 

When you're self-employed, you watch every dollar. So the right question is not "which plan sounds better?" It's "which one costs me less given what I actually need?" 

Here is a simple way to think it through: 

Add up what you actually spend. Look at last year. How many times did you go to the dental provider? What did you have done? What did it cost? 

Compare total costs, not just premiums. With insurance, add your premium plus your deductible plus any costs above the annual limit. With a discount plan, add your yearly fee plus your out-of-pocket bills at the discounted rate. 

Think about this year's needs. Do you have a big procedure coming up? Are you mostly keeping up with cleanings? Your answer shifts the math. 

A key difference worth remembering

The ADA explains that a discount plan leaves you responsible for the full bill, but at a lower rate set by the plan. Traditional insurance pays a share based on its rules, and common insurance designs may include a deductible and an annual maximum.¹ 

That means you should not compare only the plan fee or insurance premium. Check the reduced prices under the discount plan and the deductible, coverage percentages and annual maximum under the insurance plan. Then compare what you may pay in total. 

If your needs are light, insurance may cover much of the care you need. If you expect more dental work, compare both options using the cost of that specific care. 

Other things worth checking 

Before you sign up for either option, ask these questions: 

• Is my current dental provider in the network? 

• Does the plan include the exact care I need? 

• When can I start using the plan or its benefits? 

• Are there waiting periods for any services? 

• Are there limits on certain services or discounts? 

• Can I cancel if my needs change? 

Read the plan’s terms before you join. Start dates, waiting periods, fees, discounts and coverage rules may differ from one plan to another. 

Talk to your dental provider before you decide 

Your dental provider's office can often tell you which plans they accept and what your estimated costs would be. A care team member can walk you through the numbers before you commit to anything. 

Some offices can also help you get a treatment plan with cost estimates. That gives you real numbers to plug into your comparison. 

Before you choose a plan, talk with your dental care team about the treatment you may need and what it could cost. That information can help you compare your options based on your actual dental needs, not just the monthly price. 

Dental savings plan vs. dental insurance for self-employed people FAQs 

Still have questions about dental savings plans and traditional insurance? These answers cover a few common concerns. 

Can I use a dental discount plan and dental insurance at the same time? 

It depends on the rules of both plans. Before signing up, ask the discount plan and insurance company whether they can be used together. Also ask how each plan would handle the same dental bill. 

Is a dental discount plan the same as a dental savings plan? 

These terms are often used in similar ways, but a plan’s name does not tell you all its rules. Read the plan details to see what you must pay, which dental providers participate and what prices or services are included. 

Do dental discount plans cover specialty care like orthodontics or oral surgery? 

It depends on the plan. Before joining, ask whether discounts apply to orthodontics, oral surgery, periodontal care or any other specialty service you may need. Also confirm that a participating specialist is available in your area. 

Can I deduct either option on my taxes as a self-employed person? 

Tax rules change and vary by situation. Talk to a tax professional about whether your dental plan costs qualify as a business or health expense. This article does not cover tax advice. 

What happens if my dental provider is not in a discount plan’s network? 

The ADA notes that discount plans work through dental providers who agree to the plan’s reduced fees.¹ If your dental provider does not participate, the plan’s lower rate generally will not apply. 

Before signing up, confirm that your preferred dental provider participates. If not, you may need to switch dental providers or decide whether the possible savings are worth the change. 

Source

¹ American Dental Association: "Introduction to Dental Benefits." https://www.ada.org/-/media/project/ada-organization/ada/ada-org/files/resources/practice/dental-insurance/intro-to-dental-benefits.pdf