Why Dental Insurance is Expensive?

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zqd9853572002
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Joined: Mon Sep 17, 2012 4:38 pm

Why Dental Insurance is Expensive?

Post by zqd9853572002 » Mon Jul 31, 2017 2:10 am

Hi All,

I always have a question of dental insurance, that is why the dental insurance is always seprated from general medical insurance? And why it is so expensive? I know the dental cost is high, but the general medical is also high enough. Also, as I known, in some developing countries, the dental insurance is even not available to the market. But why? is dental a forbidden place of traditonal insurance?

Jack

MBRCatz
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Re: Why Dental Insurance is Expensive?

Post by MBRCatz » Tue Aug 01, 2017 10:39 am

Because of adverse selection, dental insurance is set up with waiting periods and limits to turn it mostly into a "prepaid plan". Since the only people who ever buy individual dental insurance are the ones that want to use it, there's no true "sharing of cost" across a risk pool.

Additionally, dental cost claims are generally not large enough to be ideally insurable risks - it's reasonable to expect people to budget $500 to $1000 a year for dental care costs, to "self insure", rather than pay a third party to administer policy coverages for small, frequent losses.

Kinda like the same reason you can't buy insurance for oil changes and routine maintenance on your car; and if you did, it would be really expensive also, for the same reasons.

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