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I have no idea how dental insurance companies make any money, why would you ever sign up if you didn’t know they were going to pay out more than you put in?

I come across so many personal-finance bloggers who think dental/prescription insurance is just obviously a basic necessity, and then you look at the plan they’re on and the payout caps are so low that it’s damn near physically impossible to get out more than you put in no matter *how* bad your health luck is.

(Meanwhile they live in a jurisdiction where the government has high-deductible anti-catastrophe prescription insurance for everyone and they don’t know it.)

They make money because of people like me, who have dental insurance, but never have enough free cash lying around to get my teeth worked on even though I have dental insurance, because what they pay for is pretty limited.

I have to keep it, because any month I might have enough money to afford dental work, and if you give it up, you don’t get it back for the rest of the year. But while it covers a significant fraction of any dental work I do get done, it doesn’t cover enough for me to get that work done, most months.

ideally if you’re paying in more than they’re paying out, you could cancel and self insure and come out with a slight edge

I do get tho that in economically precarious positions people often have somewhat elastic expenses that preclude that kind of thing. been there

(also depending on what procedures are necessary waiting periods might make this more of a calculated gamble than pure bad EV)

@profound-yet-trivial actual catastrophic insurance (for adults) is rare, most of what is called dental insurance has very low payout caps ($1000-2000 on something like $240-700 of premiums) which makes it +EV for me only if I’m likely to be buying a lot of dentistry

my other theory is that dental pricing is opaque enough that insurance is making its money thru some kind of obscure mechanism internal to the industry.

like, I want to buy some dentistry. I did a few hours of research and purchased an insurance plan which is, I believe, going to pay out more than I am paying in premiums. I am reasonably confident I am going to come out ahead having this plan, but I am not confident at all and would likely bet that I have not selected the maximally efficient strategy.

I estimate that confidently determining such a strategy would probably take me ~20 hours. getting this right could save me a lot of money! but maybe not that much money?

so yeah if anyone is familiar with the economics of dentistry in seattle I am willing to pay you for advice! hmu with your cost estimate. alternately I guess I could download tinder and try to match with dentists or something lol


#conversational aglets #adventures in human capitalism #medical cw

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