Insurance can get a little confusing at times (ok, a lot of the time) especially when it comes to plan terminology. If you are trying to choose the right dental plan, or if you are trying to make the most of your current benefits, we know insurance language can seem foreign and overwhelming. But the best way to take full advantage of any insurance plan, is to understand its features first. That’s where we come in.
We want to keep your benefits clear and as simple as possible. One of our most commonly asked questions is “What is the difference between a maximum and a deductible?”
Let’s get started.
What is an annual maximum anyway? An annual maximum is the maximum dollar amount a plan will pay toward the cost of dental care during a specific period (also known as a benefit period. Note: this period is typically a full year but not always a calendar year).
Most dental plans are going to have one of these, and the patient will be responsible for paying costs above the annual maximum. It’s important to mention that on a group plan, the maximum limit is chosen and set by an employer. So, for example, if you have an annual maximum of $1,500, your plan will pay its portion of the bill up to the amount of $1,500 within that year. For High Deductible, Co-insurance and Co-pay plans the maximum will apply to preventative, basic, and major services. Also keep in mind that orthodontics usually has a separate maximum and is considered a lifetime maximum.
A deductible is the specific dollar amount you have to pay before your plan starts paying benefits.
Most co-insurance dental plans will have a deductible (co-pay plans will have a $0 deductible if 6 or more are enrolled), and the patient will pay a portion of the dental bill before benefits are paid. This applies to each covered patient, up to the maximum family amount. So, if you have a $50 deductible, you’ll have to reach $50 first before your dental plan covers expenses. You would have no further deductible charges until another family member visited the dentist. For groups, the deductible does not apply to preventive but for individual plans the deductible will apply to preventive. Deductibles are typically set at lower amounts, and only has to be met once every year. Keep in mind that deductibles usually don’t apply to preventive services (things like exams, x-rays, cleanings). For groups, the deductible does not apply to preventive but for individual plans the deductible will apply to preventive. But as a side note, if you visit a network provider, these services are covered at 100%.
In short, maximums are how much your insurance plan will pay at most, where a deductible is how much you will pay first, before benefits can be used. Keep in mind that when it comes to annual maximums and deductibles, plan benefits do vary. Each plan will have varying limits so it’s important to check these first before you purchase a plan or visit the dentist.
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