Dental costs can add up fast but it’s equally true that delaying dental care can have a major impact on both your physical and your financial health. If you’re in need of dental care now or simply planning for possible costs in the future, read on for a few quick tips on financial planning for dental needs.
Use a Flexible Spending Account (FSA)
There are many benefits to holding a flexible spending account or FSA, which can be set up for you by your employer. With an FSA, you can save a portion of your regular earnings before they are subject to payroll taxes – reducing your taxable income, while also automating savings for important expenses.
The money accrued in a flexible savings account can be used for authorized medical expenses, including dental care. The account holder’s spouse and any dependents are also eligible to use these FSA funds if they are in need of medical services. However, there are limitations to how long the money can be saved. Normally, funds must be spent within the year.
It’s important to note that while flexible savings accounts can be used for dental expenses, these must be related to dental services that are intended to treat or prevent a dental disease. Eligible care includes teeth cleaning, crowns, dentures, tooth extraction, and other kinds of diagnostic and preventative work. Treatments for dental issues like gingivitis or gum recession can also be paid for with funds in an FSA. Cosmetic procedures like teeth whitening are not eligible.
Ask for Payment Plan Options
Many dental practices work with third-party finance companies to help provide dental payment plans to patients. A payment plan is not a type of insurance, but instead operates as a kind of loan to help you cover up-front dental costs and pay back the money you owe over time.
It’s good to know that dentists don’t get any commission from the third-party finance company; in fact, dental offices are usually the ones who pay a fee to the financer. This is because offering patients access to a payment plan means the dental practice will get paid sooner and can attract more patients. In other words – don’t be afraid to ask your dentist about payment plan options.
When considering a payment plan option, evaluate interest rates over the long term. While some companies offer a 0% interest rate for a certain fixed term, the rates after this time could be higher than what you’d pay with a credit card – in which case paying for your dental care with a personal loan or credit card could be a smarter financial decision. Also look at fees and early repayment penalties, which could prevent you from taking advantage of low up-front interest rates and ultimately bump up your final dental costs.
Credit Cards and Loans
Many people find that paying for dental care with a credit card or personal loan is the best option – offering many of the same benefits as a dental payment plan, with more straightforward terms, conditions and interest rates. This is especially true if you’re already working with a financial institution that has advisors you trust to help you decide on the best payment and credit options.
As with any purchase made on credit, you’ll need to consider how your current credit score and debt situation will affect the terms of your loan or credit card interest rate. Of course, this analysis should also take stock of what kind of dental care you need – if it’s an emergency that can’t wait, or a condition that will only worsen over time, then it may be worth it to get the care you need, even if borrowing circumstances aren’t ideal.
You can also check out special offers from your bank or credit union; many of which are adjusting rates to help people amidst the financial challenges of COVID-19. HUECU, for example, has temporarily lowered the personal loan rate to 4.99% to assist people impacted by the pandemic. Credit cards from HUECU offer their own range of benefits like 1% cash back on all purchases as well as an introductory 0% APR, which could be a good choice to cover dental expenses.
If you’re currently unemployed or taking home a small paycheck, you may qualify for Medicaid – the federal and state program that helps low-income families access medical care. Dental coverage varies by state, but at least some services should be covered if you are a Medicaid recipient.
Private insurance is also available to help you prepare and pay for dental services. There are a number of private plans available, which may offer reduced-cost or no-cost cleanings, exams, orthodontic care and so on. Of course, to access these services, you’ll be paying regular premiums as well as up-front deductibles or co-pays. It’s a good idea to calculate your costs before selecting a dental insurance plan, to make sure that your premiums and out-of-pocket costs are worth it for the care you’ll need.
What to Choose?
Everyone’s healthcare and financial situation are different, so it’s important to take stock of your specific needs and financial assets before making any final decision about how to pay for your dental care. Do the research and speak to a financial advisor or your financial institution for more information about what your options are, and what makes sense for you.