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Felicia Papier is the Project Strategist and SEM Manager for Dental Insurance Store.  She is also a frequent blogger for both Agent Straight-Talk and Dental Wire.  When she's not helping people find the right dental plan for the right price, she is traveling, baking cupcakes or spending time with her husband, Marc and son, Aden.  

Dean George writes for Agent Straight Talk, the only consumer blog explaining the ins, outs and in-betweens of dental insurance and discount dental plans. As a veteran DentalInsuranceStore.com sales agent, Dean shoots from the hip highlighting best practices and trends within the dental insurance industry. READ MORE

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Email Me Email: AgentStraightTalk@DentalInsuranceStore.com
@ToothTeller
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What are annual maximums and how do they work?

Feb 09, 2012

Insurance folks routinely using terms like “premiums,”“deductibles,” “coinsurance” and “annual maximums” sometimes forget how busy people are.  Mommies balancing binkies and babies and young parents doing diapers and Dora the Explorer probably don't have time to learn insurance-speak as a second language.

Of course, every industry has its jargon. Retailers use terms like “end cap” and “early bird,” beauticians say things like “waxing” and “threading” and rappers rhyme words I have no idea what they mean so I guess it’s all relative.

Annual maximum (or annual max) is one term used by certain types of dental insurance plans, specifically preferred provider organizations or indemnity plans. The annual maximum does not refer to the most that a member pays out of pocket, but rather the maximum that the insurance plan will pay for dental treatment per year. (Note: a “year” can be based on the anniversary date when you joined your plan, or the calendar year, depending on the insurance company.) After the 12-month period is over, the plan will pay the full annual maximum again.

Here’s a quick example: Let’s say you have a plan with an annual maximum of $750. Your dentist says you need a crown that will cost $800. According to your plan benefits your share of the cost is 50%, so you'll pay $400 and your plan will pay the other $400.  Because your plan has paid $400 toward your dental expenses so far for the year, subtracting that from the $750 maximum means the plan will contribute no more than $350 toward any future eligible dental costs for the remaining part of that 12-month period.

Annual maximums vary by insurance plan, but typically they range between $750 and $1,500.  Remember that annual maximums do not normally include preventive care. Most dental plans pay all or most of the costs of preventive procedures so those don’t count against your annual maximum.

Where an annual maximum becomes a problem is when you need a lot of dental work done within a 12-month period.

For instance, let’s follow up on the earlier example that included an annual maximum of $750. Let’s say that six months after getting your crown you need another expensive procedure that will cost $900. According to the plan, your share should be 50% again, or $450, and the plan’s share should be $450.  But because the plan has already paid $400 toward the annual maximum of $750 that means the plan is now only responsible for $350 during the remainder of that 12-month period. That means you will need to pay another $100, or a total of $550, for the $900 dental procedure.

Just remember that whatever amount the annual maximum is, it will normally buy you a lot of dental care. If you normally have one major procedure done a year it should fall under that annual maximum amount.

If you think you may need some expensive treatment(s) or if you just like the extra security, you may want to consider a plan with a higher annual maximum, or a dental plan that has no annual maximum like a Dental Health Maintenance Organization (DHMO) or a discount dental plan.

Congratulations! You now know what an annual maximum is and whether you need to consider a plan with a higher (or even no annual limit) or a less expensive plan with a lower annual maximum. 

Thanks for reading Agent Straight-Talk. If you have questions or comments about this article, please email me at: AgentStraightTalk@DentalInsuranceStore.com.

 Find me on Twitter at Twitter@ToothTeller

Facebook at Facebook.com/DentalInsuranceStore

 

Copyright 2012, Bloom Insurance Agency, LLC

 

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Healthy Teeth Tips for Easter Weekend

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America doesn’t have a monopoly on its affection for Easter candy. Approximately 80 million chocolate eggs are sold every year in the UK – an eggceptional amount.

That’s why Dr. Nigel Carter, chief executive of the British Dental Health Foundation, encourages both children and parents to take a moderate and balanced approach in all the Easter eggcitement.

Today we share some tips on how all kids can have their chocolate Easter eggs this weekend and eat them, too!


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