Finding alternative ways to pay for dentistry.

This page discusses different ways you might pay for dental treatment if you don't have dental insurance. We discuss: A) Cash discounts. B) Financing plans. C) Discount dental plans.

1) Advantages of cash payments.

Don't overlook the possibility of making some type of financial arrangement directly with your dentist. Doing so can turn out to be beneficial for both of you.

This might include: A) A cash discount, B) Setting up a payment plan, or C) Prioritizing your dental work so your expenses are delayed or at least spread out as long as possible.

A) Ask your dentist if they give cash discounts.

If you're faced with a relatively costly dental treatment plan, you might ask your dentist if they give a discount if dental work is paid for in a lump sum in advance.

Your offer may be turned down. But besides the obvious benefit this arrangement has for you, it can provide a number of advantages for your dentist too, so there's no reason not to ask.

1) Advance payments make less work for your dentist's staff.

With up-front payments, the workload for your dentist's office staff is minimized. Each time you are in they won't have to ask you for a payment nor will your account need any mailed statements or accounts-receivable monitoring. And, of course, there is no chance that your completed dental treatment will go unpaid.

2) Lump-sum payments may help to increase your dentist's productivity.

Patients who have already paid for their dental treatment in advance tend to have fewer broken appointments. And during any one appointment, if extra time presents itself the dentist can feel free to go ahead and complete additional treatment rather than having to stay within the patient's budget.

3) Offering a cash discount might actually save your dentist money.

As we explain here, the costs a dentist incurs with some third-party in-office financing programs can be substantial. And when compared to having a patient use one of these services, offering a cash discount may save them money in the long run.

B) Ask your dentist if they offer payment plans.

Some dentists may consider making a payment-plan option available to their patients. You'd have to assume that this type of arrangement is only offered to people with whom the dentist has had a long-standing patient-doctor relationship and whose payment history has shown credit worthiness.

Here's how this type of plan might work.

The dentist will probably ask for some portion of the dental treatment's total cost to be paid up front as a down payment. This amount might be between one-third and one-half of the patient's total treatment expense. The idea is that this down payment will cover a significant portion of the dentist's fixed expenses such as the procedure's dental laboratory bill and office overhead expenses.

The remainder of the patient's treatment costs is then budgeted out in monthly payments. Especially in those cases where no interest is being charged, you would have to expect that the repayment time frame offered would be relatively short.

As whimsical as the idea of this type of arrangement may seem, when compared to those expenses imposed on a dentist by some types of in-office financing programs (see the link above), this arrangement may prove to be relatively cost-effective.

C) If the total cost of your dental needs is prohibitive, ask your dentist about prioritizing your treatment.

A dentist initiates every patient's treatment process by developing a treatment plan. The ordering of the individual procedures listed within this plan reflects the urgency with which they need to be addressed.

Some procedures will need to be completed promptly, so to prevent further deterioration of the patient's teeth and gums. Others will have a nature where they can be scheduled at a more leisurely pace.

Any dentist should be able to identify a general breakpoint in a patient's treatment plan where the procedures listed begin a transformation from a state of urgency to one of more moderate, less pressing need. The idea is, once this point has been reached, the patient's dental visits can be scheduled less frequently, possibly even significantly so, thus spreading their expenses out over a longer, more-affordable time frame.

2) Dental Financing Plans.

Dentists will often offer some type of financing plan to their patients that allows them to budget the expense of their dental treatment over time.

They do this because they know that the cost of dentistry is often a barrier that prevents patients from scheduling the treatment that they need, or want. By offering credit, a dentist can help to keep their appointment book full of patients.

Financing plans can be in-house or third-party.

The specific type of plan that a dentist chooses to offer will of course vary. Some will be in-house programs, meaning that the agreement is entirely arranged for and serviced by the individual dentist or dental office.

More likely, the patient's credit will be obtained from a third-party source. There's no shortage of commercial lenders that are eager to participate in the dental-loan business.

Financing agreements - What to look for. / What to watch out for.

What are the usual selling points of a plan?

Here's a list of features that you'll likely find bundled into any commercial dental financing program.

  • A no-interest payment option.
  • Low monthly payment options.
  • No up-front costs.
  • No prepayment penalties.
  • No annual fees.
  • A quick decision about acceptance into the program.

Do these terms look familiar? Maybe they seem similar to the credit plan that you've been offered by the furniture store down the street or big-box home-supply store. They're probably pretty much the same.

To a financing company, dental credit is simply unsecured personal debt.

Dental financing is a type of unsecured personal debit. You put up nothing as collateral. And your dental work can't be repossessed. For this reason, extending this type of credit is one of the riskiest types of consumer lending that there is.

To insure that they'll make a profit, a company will need to structure the terms of the agreement in a fashion that is as favorable for them as possible. A part of this structuring will involve the program's interest rate (which can be high or, surprisingly enough, in some cases zero). And it will also certainly involve strict repayment conditions and substantial penalties if these terms are not met.

Be sure to evaluate and compare the interest rate that's being offered.

Since dental financing is a type of unsecured debt, you can expect that the interest rate involved will be comparatively high. It will most likely run along the same line as that of your credit card. You may very well find that your own credit card offers a lower interest rate.

Now, having said that, the terms of some dental financing plans are zero. (Read our next paragraph.)

Does the term "no interest" really mean zero interest?

Many dental credit plans have a no-interest option. For example, the terms of the agreement may be such that (for amounts more that a certain minimum but less that a specified maximum) no interest is charged for the first one, maybe even two, years.

This can be a great deal for some patients, if they are capable of strictly adhering to the terms of the agreement. (Choosing this option may have consequences for your dentist - read below.) But what happens if you don't make a payment on time, or if your balance isn't paid off in full before the end of the interest-free period? You better check.

Failing to comply with the terms of the agreement may not only disallow your eligibility for the zero-interest feature but may also place you in a situation where significant penalties are applied. We've seen estimates that suggest that as many as twenty percent of people participating in no-interest financing agreements (of all sorts) fail to meet the plan's terms.

Why not shop around for other ways to finance your dental treatment?

With dental credit offered through your dentist, a part of what you're paying for is the convenience of doing your financing right there in their office. We'd suggest to you, however, that you owe it to yourself to shop around, at least a little bit. Your own bank, credit union or savings and loan may very well be able to arrange for a loan whose interest rate and terms are more favorable for you.

Ask your dentist to make you a deal.

If a dentist has chosen to offer financing, they are probably open to other types of deals too.

We haven't mentioned this yet but when you participate in a third-party dental credit program offered through your dentist's office, they (the dentist) typically end up paying a fee (read below). It can be on the order of five to almost fifteen percent of the total amount that you finance.

Now, take a moment to think about what this implies. By offering a third-party credit plan, you already know that your dentist is willing to discount the cost of their services. So why not consider making them a better offer?

Arrange for dental financing on your own (at your credit union, bank, etc...) and offer to pay this lump sum to your dentist, in advance, in return for a cash discount. You pay less in financing charges, you get the cash discount and the dentist makes more money. Win, win and win.

Dental financing plans - The dentist's part of the deal.

To us, a very interesting part of this topic was learning about how the dentist fares in a third-party credit arrangement. It's not quite as straightforward as you might think.

Did you know that the dentist usually incurs an expense?

You might think that by being both the treatment provider and the middle-man for a financing transaction (the party that hooked the patient up with the finance company) that the dentist would not only get the full amount of their patient's treatment costs paid to them up front but might also get some type of commission on top of that.

This is not the way things usually play out. Actually, when participating with a third-party plan, the dentist usually incurs an expense. And this will usually be on the order of at least five percent of the total amount financed by the patient and possibly even closer to fifteen.

This cost is substantially greater than the two to three percent "merchant fee" that a dentist would be charged by a credit card company. (And this is why a dentist might be inclined to offer a discount to those patients who pay for their treatment in full in advance, either cash or possibly even when using a credit card.)

Why would a dentist be interested in paying a fee so you can finance your dental work?

The reason why dentists choose to participate with third-party dental financing companies is because of their bottom line. The dentist is simply doing that which they feel they must do to keep their dental chairs filled with patients.

We've seen promotional information on the websites of companies specializing in this field that suggests that by reducing the expense barrier associated with a patient's treatment (meaning patients having financing available to them) a dentist can increase their income on the order of twenty five percent.

The financing has the affect of placing the dentist in greater demand because it helps their patients afford the treatment they need. It also helps patients to obtain those dental services that they don't have to have but want (such as high-dollar cosmetic dental procedures that are not covered by dental insurance).

There are other advantages for the dentist too. They get all of their portion of the treatment money up front, usually just a few days after the financing has been put in place. Determining the patient's credit worthiness (eligibility to participate in the plan) is turnkey and instant. And if the patient doesn't follow through and pay as promised, it's not the dentist's problem.

The fee that the dentist pays varies.

We found it interesting that under different scenarios, the dentist's cost of allowing their patient's to finance their dental treatment varied.

» Scenario #1: The patient chooses a plan's interest-free feature.

Some dental plans offer a no-interest option. The amount financed, or the credit line offered, typically needs to fall with in a certain dollar range (both a minimum and maximum limitation). The time frame associated with a no-interest feature is typically two years or less.

While a no-interest option can be a great choice for those able to take advantage of this type of plan's strict terms, it is the most costly scenario for the dentist. (Which means that a dental staff member's concern that the strict terms of the agreement may be too demanding for a patient and therefore a longer-term plan might be the better choice, may not be a genuine as it first seems.)

The fact that the fees are higher for the dentist only makes sense. If the patient isn't paying interest, somebody has to pay the financing company. In the case of a no-interest arrangement, the fees that are deducted from the lump sum payment to the dentist can be between ten and fifteen percent of the total amount financed. Ouch.

» Scenario #2: The patient extends their financing over a longer time period, with interest.

Some patient's may feel that they will not be able to meet the strict payment conditions associated with a no-interest option. They instead require a longer repayment period and lower payments. The tradeoff is simply that the loaned amount will incur interest charges during the entire duration of the agreement.

This interest-bearing scenario provides the more profitable situation for the dentist. Since the patient is paying interest, the dentist's fees imposed by the dental financing company are lowered. With this case, they usually run on the order of five percent of the total amount that the patient finances (which is about twice the amount they would pay to a credit card company if you charged your bill on your card).

Make sure your dental financing plan is a good deal for you, not just your dentist.

Some patient's decision to enter into a loan agreement may be swayed by the fact that it is being offered to them by their trusted dentist. With the exception of some type of payment plan that is offered to you directly from your dentist at little or no interest, you need to keep in mind that any type of agreement that you are offered is a business deal, not just a simple act of good will.

The dentist has decided that the agreement offers advantages for them and that is why it is being offered to you. It may offer advantages for you too, but keep in mind that it is a straightforward business deal and its terms need to be scrutinized as such.

Be leery of the sincerity of program endorsements.

We would also state that we have seen the promotional materials of dental financing companies that claim a relationship (sometimes an endorsement) with various professional associations (including the Academy of General Dentistry, the American Academy of Periodontology, the American Association of Oral & Maxillofacial Surgeons and the American Dental Association).

Don't be unduly influenced by this advertising. We would anticipate these relationships are much more motivated by the financial concerns of the organization and its dentist members as opposed to the financial well being of dental patients.

3) Discount dental plans.

Discount plans are yet another dental-coverage option. They're sometimes confused with dental insurance but fundamentally they're quite different.

How are discount plans set up?

The basis of this type of product is that the company who sells the plan has contracted with dentists (a "closed panel" network of participating dentists) who have agreed to discount their fees in exchange for patient referrals.

Unlike an insurance company (that assumes some financial risk), with this type of product the company selling the plan simply acts as a matchmaker, matching dentists with patients. (For this reason, these types of programs are sometimes called "referral" dental plans.)

How do these programs work?

Most referral/discount plans work in the following fashion.

  • The member pays a (monthly/annual) membership fee. - These fees generally run around one or two hundred dollars per year, depending on whether the membership is for one individual or one individual family.
  • The discount that the member receives is determined by the plan's fee schedule. - This fee schedule lists all covered dental procedures and the amount that the participating dentist is allowed to charge for each (as payment in full for services rendered). The member's discount is simply the difference between the plan's stipulated fee and the dentist's usual fee.

Notice that with this type of plan all financial transactions related to the patient's treatment are between them and the dentist. The company that has sold the plan is uninvolved.

What you should know about these programs.

If you are considering joining a discount/referral network, here are some of the points and considerations, both positive and negative, that you should keep in mind.


Ease of use.

As opposed to dental insurance, utilizing a discount plan doesn't involve filing claim forms or forms for predetermination of benefits. In most cases there are no plan deductibles, benefit limitations, or wait-period restrictions.

Cosmetic dental services may be included.

Some discount dental plans provide allowances for cosmetic dental procedures such as bonding or veneers. (Make sure you've checked the plan's list of covered services before you join.)

Your dental program may come bundled with other discount plans.

Dental plans sometimes come bundled together with programs involving other health-related fields (vision, pharmacy, hearing, chiropractic).

Disadvantages / Concerns

While the following issue isn't necessarily a strong disadvantage of this type of plan, it is a point that you should be aware, and possible leery, of.

Why would a dentist participate in a discount plan?

The bulk of the financial risk associated with a discount program is placed on the participating dentist. In theory, they have agreed to do more work (accept the plan's referred patients) for less pay.

In the case where a number of new patients, each needing extensive dental work, have joined the program, the dentist will be obligated to perform an increased amount of discounted dental treatment. If so, how can the dentist survive financially?

It may be that this influx of new patients simply makes it possible for the dentist to fill up their empty appointment book, ramp up their productivity and reach an economy of scale that allows them to provide this discounted work while still maintaining a suitable profit margin.

Watch out of off-plan "upgrades."

In other cases, however, the financial loss associated with providing certain procedures might be motivation for the dentist to encourage patients to opt for off-plan "upgrades" or "add-ons," so to restore their profit margin.

By no means are we suggesting that this is the norm or to be expected. At the same time though, we do feel that it is important to point out that in those cases where a particular type of dental coverage seems "too good to be true" (such as too discounted, or too unlimited or unrestricted) that the dental patient should enter into the relationship with open eyes.

Plan features you'll need to evaluate.

You'll need to thoroughly evaluate the various discount networks you are considering. While each will no doubt be very similar, there will almost certainly be differences too.

As we looked through several of these dental plans, we noticed the following points that we felt some people might not grasp the importance of, or even overlook totally.

» Pick the right type of plan.

Plans tend to fall into one of two broad groups. Those that offer high savings on Preventive measures (cleanings, x-rays) and those who offer better discounts on Basic and Major dental procedures (fillings, root canals, crowns). Determine what type of services you expect to need during the term of the plan and purchase accordingly.

» Make sure that the plan's fee schedule includes the procedures that you require.

You need to know for certain that the types of dental treatments that you need are included in the fee schedule of the plan you are considering. (If you don't see a particular procedure listed in the plan's promotional materials, call the company and specifically ask them if it's included.)

With some plans, if a fee for a particular procedure is not found in its fee schedule, the patient still receives a discount. It's usually based on a flat percentage of the dentist's normal fee (such as 25% off). However, with other plans, if it's not listed it's not a discounted procedure and you will have to pay the dentist's full fee.

» Check for any non-standard or hidden fees that the dentist can charge.

  • Make sure that the participating dentist must accept the discounted fee listed in the plan's fee schedule as payment in full.
  • Certain procedures (such as crowns, bridges and full and partial dentures) involve dental laboratory expenses. Make sure that the discounted fee that the participating dentist is allowed to charge for these procedures includes this laboratory cost. If it is not included and must be paid by you, ask if there is a plan discount for this fee.
  • Watch out for plans that allow outrageous charges. We've found one plan where the dentist was allowed to tack on a "sterilization" fee.

» Does the plan provide for the services of specialists?

Some of the dental procedures you need may require the services of a specialist. Check the plan's provider list to make sure that the kind you need is available in your area.

In some cases, a plan may discount specialist's fees differently than they do for general dentists. For example, sometimes the member's discount is a flat percentage of the specialist's normal charges (such as, 25% off the specialist's usual fee).

» Other fee schedule related considerations.

  • Make sure that the fee schedule you see in the plan's promotional materials is the same one used in your area.
  • It's possible that the fee that a specific participating dentist is allowed to charge is different than what your plan suggests (due to an individual contract that the dentist has entered into with the company selling the discount plan). If you know which dentist you plan to use, it would be best to contact them directly and inquire about plan specifics.

» Some discount/referral plans do contain exclusions.

Some discount programs have exclusions for some services. As an example, there may be exclusion of work currently in progress. Consider the following scenario.

While not a plan member you have root canal treatment initiated by a dentist who is a service provider for a plan. If you then join that plan (during the time frame during which your tooth is being treated), you will not qualify for a discount for that procedure.

Dental Plans
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