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ONE OF THE MORE challenging changes that comes with retirement is the loss of your employer’s health care benefits—and I’m not just talking about regular health insurance. Two other benefits that employers commonly provide are dental and vision coverage.
Traditional Medicare doesn’t cover common dental procedures, such as cleanings, fillings, extractions, dentures, dental plates and other dental devices. Medicare also doesn’t cover the cost of eyeglasses, lenses or contacts, which many of us were used to obtaining using our employer’s vision coverage.
Medicare Part A will cover certain dental care that happens in a hospital, such as emergency or complicated dental procedures. Similarly, Medicare will also cover the cost of eye injuries, as I found out recently.
A three-year-old’s heel inadvertently struck my right eye. I quickly developed a veil of dark spots and threads. I saw a local ophthalmologist, who sent me to a retinal specialist. Luckily, there was no tear or detachment.
Four weeks later, my vision is almost back to normal. The costs for my care were submitted to Medicare. The ophthalmologist’s and the specialist’s claims have both been approved. I owe a $20 co-pay for each of the initial office visits, consistent with my Medigap Plan N coverage. I haven’t had any other out-of-pocket costs.
When looking ahead to retirement, it pays to think about dental and vision health, and how we’ll pay for routine services that were often previously covered by our employers’ policies. The first and arguably most important step is to pay attention to your dental and vision health before retirement.
Good dental hygiene is more crucial than many of us realize. Ideally, you adopt good practices in childhood and maintain them throughout your life. It’s never too late to start, however. This will improve your health and save you money. Similarly, regular vision screenings and smart practices—such as wearing eye protection—are great ways to safeguard your vision.
The second step: Make sure you use your insurance benefits in the last years of employment. If your employer funds all or part of your dental and vision insurance, use those benefits to their fullest. If you require expensive care, like dental implants, take care of it while you have insurance and a salary to pay for any expenses that aren’t covered. Also take advantage of any vision services that are covered, like eye exams, cataract assessments and eyeglasses or contacts.
A third strategy: Fund a health savings account, or HSA, during your working years. You get a tax deduction for the amount you contribute, you can invest the money you save, and the earnings grow tax-deferred. When the money is used to pay for qualified medical expenses, the withdrawal is also tax-free.
As you approach retirement, explore how you might replace your employer’s dental and vision insurance coverage. Some Medicare Advantage plans provide dental and vision coverage. What if you choose traditional Medicare? Consider purchasing private dental and vision insurance.
There’s a significant difference in cost and coverage between health insurance and dental insurance. Health insurance policies typically include a maximum out-of-pocket amount. This is the most you’ll have to pay, in addition to any premiums, in a given year. Dental plans, by contrast, define an annual maximum benefit amount. This is the most the insurance company will pay in a year. Any costs above this amount are yours to bear.
Depending on the vision and dental plan you choose, the cost of standard preventive and diagnostic services may or may not count toward your annual maximum benefit. For example, if I have an exam and cleaning that costs $200, that may be covered 100%, but it may also reduce the maximum amount the insurance company will pay for other services. This needs to be confirmed when shopping for a policy.
In the table below, I’ve provided details of two dental plans—Delta Dental PPO (preferred provider organization) Plans A and B—that are offered in my home state of New Jersey. As you can see, these plans often have waiting periods of six or 12 months for various treatments. This is so people don’t sign up for insurance right before they need an expensive procedure, such as implants.
A recent Forbes article provided average dental costs for typical procedures, using American Dental Association data. I took those average costs and the coverage offered by Delta Dental Plan A, and compared the total out-of-pocket costs incurred by two patients, one who is “healthy” and the other who “needs work.”
In my scenario, the healthy patient had two office visits, two cleanings and two X-rays per year. The “needs work” patient had these same preventive procedures, but also had two fillings, a root canal and a crown.
Both patients would pay $865 a year in premiums. The healthy patient incurs $607 in dental services. Since these are all covered preventive and diagnostic costs, and their total is below the plan’s annual maximum, these charges are fully paid by insurance. In this scenario, the healthy patient’s premium cost of $865 exceeded the covered dental expenses of $607, for a net loss of $258.
The “needs work” patient, by contrast, incurred a total of $3,525 in services. The plan covers $2,155 of these costs and the patient owes $1,370. But the $2,155 covered by insurance is over the plan’s annual maximum benefit of $1,500, so an additional $655 is added to the patient’s cost.
The total out-of-pocket cost for the “needs work” patient is an eye-watering $2,890 ($865 + $1,370 + $655). Still, under this scenario, the “needs work” patient saved $635 overall on the costs of the year’s dental work ($3,525 – $2,890) by being insured.
This analysis suggests you may not need dental insurance if you’re one of the lucky people who’s never had a cavity. But if your dental needs often require follow-on procedures, you might benefit from buying coverage.
I’ve assumed in this analysis that the preventive costs were applied to the annual maximum payment. There can also be differences in reimbursement based on the dentist chosen and what agreements the dentist has with the insurance company. It pays to ask what insurance your dentist accepts, and what the dentist’s contractual relationship is with the insurance company.
It’s harder to assess the value of vision insurance policies. Vision insurance generally has a specific purpose: It typically covers eye exams, frames and lenses, or contacts.
Vision care costs can vary sharply depending on location, service provided and eyewear options chosen. The eyewear shop Warby Parker estimates eye exams can range anywhere from $50 to $250 without insurance and cost $10 to $20 for those with vision insurance. Frames can start as low as $6.95 and soar to $1,000 for high fashion. Lenses typically require a co-pay. A policy may or may not cover lens enhancements, such as scratch resistance and UV protection.
Vision insurance plans use co-pays, allowances and discounts in several ways. More expensive plans have more generous allowances, while lower premium plans often offer discounts for some items. The insurer EyeMed offers three plans to individuals. Its offerings provide a good example of how to evaluate a plan.
Let’s assume, for example, that a patient had one eye exam costing $150, and one pair of glasses with $400 frames and $200 lenses, for a total cost of $750. The most expensive EyeMed plan would cover $520 of that cost. The patient would pay the remaining $230 plus $360 in annual premiums, for a total of $590. The insurance results in savings of $160, meaning the services provided cost more than the annual premiums.
The medium-price EyeMed plan costs $150 less in annual premiums but the patient pays $70 more for frames. This plan also has co-pays for some lens enhancements, like scratch resistance and UV blocking, so there could be more costs if those items are chosen.
Depending on your needs, vision insurance might be a good deal. It’s worth spending time reviewing policies to see how they match up with your vision needs. Note that for eye exams, the discount plan has $0 co-pays, but the more expensive plans have $10 co-pays. This is an example of how difficult it is to evaluate these plans. If you usually have an annual eye exam but buy glasses only occasionally, a medium-priced plan may be more attractive than a high-cost plan.
Richard Connor is a semi-retired aerospace engineer with a keen interest in finance. He enjoys a wide variety of other interests, including chasing grandkids, space, sports, travel, winemaking and reading. Follow Rick on Twitter @RConnor609 and check out his earlier articles.
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Just a quick comment re the frequency of routine dental x-rays. It’s been a forever bromide that annual x-rays are necessary, but that just isn’t so for those who aren’t prone to cavities(I stopped getting them shortly after reaching adulthood. The ADA’s current recommendation is for 18-24 months between films unless there are mitigating circumstances. Make your dentist justify those x-rays if he/she pushes back.
Here’s another consideration when it comes to saving money on dentists, and certain other commonly practitioner-owned small business professional services like dermatologists and veterinarians. This advice is based on my wife’s & my personal experience in each of these 3 cases over the last 5 years or so.
Q: As the baby boomer retirement wave accelerates, what do you suppose your family dentist/ veterinarian/ dermatologist, who has had his/her own practice for the last 10/20 years or more, and who is finally ready to retire, does when they finally exit the business?
A: They sell their practice to someone much younger, typically someone who just graduated from dental/ vet/ medical school in the last 5 years. With a large book of existing loyal clients who visit on a regular/ predictable schedule, have a good convenient location already fixturized out for the practice at hand, and a good, trained staff already in place, these businesses can be quite valuable.
Especially if your trusted Vet had the good sense to brand his practice with a non-person specific name. For example, before he retired my dentist in Dana Point, CA named/ branded his dental practice “Dana Point Smiles”, rather than ” Dr. Wilson, DDS”. This allowed the intangible assets of the business (client base, location, lease, local awareness of the business and staff, etc) to more easily be assignable for a higher value to whomever purchases the practice.
The Buyer not only takes on significant debt to fund the buyout of the practice (perhaps partially funded by the Seller in financing carried back as a note), but also very likely is still paying off significant medical school student debt and may be doing so for many more years. So, over the course of a few years you go from a founder-owned practice who had little or no debt, and knew most of his/her patients personally, to a new owner who is saddled with significant debt taken on to buy the practice, plus perhaps student loans (and younger family expenses at home). There’s only 2 ways to make the math work: more procedures to be billed (via more from existing clients is fastest to accomplish, adding new patients is much harder/ slower) – and/or higher fees.
When my dentist sold his practice a few years ago the young buyer was introduced as just a new member of the staff, no more, and very much downplayed. But fairly quickly my existing dentist was seen less & less, and eventually not at all. Only ~ 6-9 month later (after the last time he was seem there) came the announcement he was retiring, and introducing the new dentist. In addition, the buyer took a great interest in new x-rays and suddenly I needed four new crowns to replace ones I had had for 8-12 years but none of which were causing me any pain or other issues. He reassured me we could space these out over 24 months or so – but we needed to get started ASAP. And prices began to rise as well.
The very same thing happened with our local vet in Laguna Beach, an older woman who we had known for many years. A younger vet was first introduced as a member of her staff, who co-worked with the proprietor for 6-9 months to minimize customer defections (and maximize the value of the business practice as an asset). And soon after our vet retired fees climbed dramatically and things that used to be no charge were now itemized and never overlooked.
If this sounds familiar, you might consider changing to a sole practioner who did not just buy their practice from another doctor in the last 5 years, and who hopefully doesn’t plan to retire for another 5-10 years or so. It could save you a lot of money!
As a retired dentist in Pennsylvania in my own practice, that was non-participating I told patients if their employer paid for dental insurance great otherwise they should consider self insurance. Insurance companies have to make a profit and they contract with dentists to take a discounted fee. Most plans that I saw had a maximum of $1000 up to $1500 per year. In recent years, some of these insurance companies have reduced payouts to their participating dentists! So there’s been a tendency for dental offices to do some type of self insurance within the practice to benefit both the patient and the dental office. Insurance driven offices have to increase their production, and reduce the cost of supplies to be profitable. Rents and staff salaries along with benefits continue to increase. Over the years gold prices have forced dentists to find less costly lab bills by making changes in the materials and lab used. Technology and new materials have helped but some offices seek out the cheapest lab they can find. There have been articles questioning the use of labs out of China offering 1/5 (or greater) the price of using a top quality lab! The patient is unaware of the quality of care and materials used and usually respond to the personality of the dentist. luckily, most are ethical, honest, and caring.
JS, thanks for reading and commenting. Your experience and insights are very interesting. I was seeing a younger dentist in PA before we moved to NJ. His office was great, friendly, professional, and high-tech. He knew I was self-insured and tried to make treatment relatively affordable. As an engineer I was intrigued by his business plan to incorporate 3-D printers to produce his own products, and try to become a preferred provider for other offices.
excellent article. My dentist and oral surgeon will not take insurance, also in NJ, so the decision is even easier. I came to the conclusion that this is a place to self-insure. i took G instead of N and that was also probably a place to self-insure. Planning for the unknowable I try to see if I can tolerate the worst case.
5, thanks for reading and commenting. Sounds like you have thought insurance through pretty well. We can never know exactly what’s to come, that is why I try to do some typical, as well as worst-case analysis to see what the costs may be.
Currently in the “healthy mouth” group. I go 2x a year for cleaning and X-rays and pay cash for less than $400. I am sure if I had insurance the dentist would charge “more” because of the cost of paperwork and the discount he would have to give the carrier. Because I like to travel I think I would pursue medical tourism as an option when I have “expensive mouth” time.
James, thanks for reading and commenting. Here’s hoping you staying the healthy mouth group forms long as possible.
Medicare is so shortsighted they don’t cover the following which could save millions in resulting costs:
Hearing Aids: Rick you forgot this one. Research has shown that not being able to hear leads to mental decline, and further expensive care.
Dental Preventative Care: Research has shown that dental cleanings can prevent gingivitis which causes inflammation which can lead to other maladies such as heart conditions.
Visual Refraction: Research has shown that poor vision leads to falls and further medical costs.
How many retirees on Medicare can’t afford the above preventative care and how many billions are paid out by Medicare as a result?
David, Kathy Wilhelm did a great article recently on hearing aids.
https://humbledollar.com/2023/08/getting-an-earful/
When I needed a very expensive extraction and implant a few years ago—and we have double coverage with Delta Dental through our employers, but it still cost a fortune—a friend who lives in Puerto Vallarta said I should go there. Apparently in Mexico, you can get high-quality care for a fraction of the cost and even come out ahead after plane tickets and a hotel—plus you get a vacation out of it. I didn’t do it, but it made me think.
Thanks for reading and commenting. I’ve heard of people traveling for medical care, but never met anyone who did it.
Medical tourism is definitely a “thing”. Even in Europe.
Have been hesitant over the years to pick up dental insurance, but changed my mind on this a couple of years ago. The bills really started to mount up so I asked my regular dentist who do they accept under a PPO dental plan and signed up a few years ago for about $600 a year for a plan with a $2500 maximum. What’s really nice is that the limit may not seem very high, but since it is a PPO the bills are discounted substantially, similarly to a PPO for someone under age 65. For myself, the savings have been in the thousands of dollars on a net basis.
Arnold, thanks for reading and commenting. It sounds like you found a good plan. I didn’t come across any plans with that high a maximum coverage. Good luck with it.
Why does Medicare not cover refraction as part of the eye exam
Kenneth, thank for reading and commenting. My understanding is that an eye refraction is considered part of a “routine eye exam”, which aren’t covered under Medicare. My ophthalmologist has a big sign alerting patients that Medicare doesn’t cover it.
Very timely article, Richard. No dental insurance here. Just this morning had to call oral surgeon for tooth extraction and was told upfront it would cost over $600.plus anesthesia and new x-rays. My regular dentist provided me with X-rays but. apparently it matters if you had X-rays while sitting down or standing up? Extra for procedure if unforeseen circumstances require more extensive surgery.
Before they even gave me an appointment the surgeon’s. office wanted to know if I were interested in replacing the tooth with an implant. And, while I was on hold waiting for office to check on appointments I had to listen to lengthy recording telling me about all manner of restorative treatments I could have with the emphasis on implants.
I go to a regular old fashioned dentist for general care. He’s a big. proponent of trying to save what his clients have but have already had root canal and additional work on that particular tooth which haven’t worked for long. Dentist did mention that once teeth start to go in regular succession it’s like a domino effect…pretty scary.
Harsh chemo and other drugs I’ve had to take have been the death knell for my teeth and complications from Sjögren’s syndrome have only hastened my woes.
Trying to. predict future dental needs is a conundrum. My best suggestion for the unknowable..save and save for your future health needs. So grateful to have the means to pay for my health care. Feel deeply for those who have to go into debt.
Thanks, Richard for an excellent overview of both dental and vision.
Marjorie, If you’re “fortunate” enough for the extraction to be on one of the end-of-the-line molars you may be able to get away with doing nothing as was recommened by my oral surgeon. The hole left fills in with gum and the jawbone area should fill in as well. It’s been just over 10 years since my own extraction and no issues.
Majorie, thanks for reading, commenting, and kind words. Best of luck with your upcoming dental work.
I’m actually a fan of dental insurance. But my situation may be a bit different. My husband and I have two Delta plans. One is part of our “gap insurance” that we have as retirees from the state of WI. It covers cleaning, exams, x-rays, etc. We pay nothing for that plan since our retiree benefits include payment for the gap insurance. We also do have Delta plan that looks a lot like the PPO Plan A shown above. We live in WI, so our premium is a little lower — $750 a year. But that’s for BOTH my husband and myself. I would say I’m in the healthy mouth group — but my annual x-rays found decay under an ancient filling last spring. The cost to clear the decay and crown the tooth was over $1500; I paid $500 of the cost. My husband and I both have pretty good teeth — no dentures, bridges, etc. But in the seven years we’ve had the PPO Plan, we’ve come out ahead every year.
Marilyn, thanks for reading and commenting. I’m glad your plan is working well for you.
Rick,
Your detailed analyses are always great—thank you. Every time I’ve looked at the numbers, including yours, and considered our needs, I’ve concluded that dental insurance is a bad deal for us.
We do get some limited vision benefits, basically discounts, as part of our Mutual of Omaha Medicare supplement plans. While that helped a little with recent eye exams, when it came time to buy new lenses, we found that the best deal was just to head on over to the Costco Vision Center.
Andrew, thanks for reading and commenting. My wife wears glasses and we were just discussing heading to Costco for her next pair!
I can’t comment on the vision portion of this article. With regards to dental coverage, in my very high cost of living area, a Delta Dental plan which seems quite similar to the PPO A in the article calls for annual premiums for 2 people at a total cost $1458 per year. The cost for two cleaning visits with x-rays once a year for us is $620.
This type of insurance is what I refer to as “dollar trading”. You give the money to the insurance company, they process it and return it you in a smaller amount.
What would be better coverage for us would be a plan that just covers a majority of the cost of large expenses. The insurance company doesn’t offer such a plan, as they fear that some people would skip the maintenance portion of dental care, increasing the need for high cost procedures.
Over the last five years our dental costs, which includes the need for crowns on several occasions, are less than what the insurance would have cost. As in other circumstances, your results may vary.
Generally, it makes more sense to insure against larger losses while paying smaller losses as a usual expense of living.
Thanks for reading and commenting. It is hard to justify dental insurance as you demonstrate. The waiting periods are another feature that makes them hard to justify. Too many of us wait until we need significant care, and can’t wait 12 months for a crown or implant.
I agree that dental insurance is usually a bad deal. So bad, in fact, that my dentist offers a “membership plan” that is basically its own version.
On the other hand, I have been very pleased with the VSP vision insurance I have carried for years. It’s been $14/month for all those years, and has saved me a bundle on glasses.
Although it won’t pay for glasses or contact lenses to correct vision, Medicare will cover eye exams and procedures. I have had cataract surgery, partial cornea transplants and superficial keratectomy (cornea smoothing) on both eyes and Medicare covered all of it. (Although it will only pay for standard replacement lenses with cataract surgery.)
Kathy…wasn’t able to reply to your great article on hearing at time of publication but appreciated it. My problem is not wax build up but liquid (clear) build up and lose hearing. Ears feel like constantly “popped”, with pressure and pain. Had to go recently to have them suctioned out and ear doctor put little tubes in my ears that will stay for approximately 6 mos. to a year. Also pulsating squeaking tinnitus in left ear constantly. Have to go back for new hearing test. And just may take your suggestion about Costco.
I always thought it a good idea to refrain from revealing my medical problems or mentioning them.Life can be grim enough. I was taught that it was good manners not to speak or talk about medical problems and come from a long line of stoic New Englanders who kept their own counsel. But I see where my ideas might be evolving, as the politicians like to say. The internet opened up a whole new way of open expression. Who knew how much we were holding in all that time. And I now think that maybe an occasional glimpse of what knowledge we have to offer to others regarding health matters can be helpful to others.
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I hear you about reticence – after all, I grew up in (old) England in the 50s and 60s. However, the internet has changed a lot of things: many are not for the better, but easier access to information is one that is. I have a rare eye condition (to go with my rare hearing loss, sigh), and the support group I found online was a wonderful resource.
I hope your ear treatment works, that’s not a problem I’d heard about before.
Kathy, thanks for reading and commenting. Medicare paid for my eye injury also, including a Retina specialist.
Just clarify. Medicare doesn’t cover eye exams (sometimes called “eye refractions”) for eyeglasses or contact lenses. On the other hand when my wife was hit in the eye with a baseball all her eye care was and still is being covered. In excess of $100,000 at this point.
Thanks for the update. I haven’t been paying for them myself, but it must have been VSP that covered them, not Medicare. Apparently it doesn’t matter if seniors can’t see properly…. Sorry to hear about your wife!
What Medicare Advantage pays for dental care is very very bare bones and most dentists will not participate as the fees are paltry. Dentistry, especially implants, are beyond the reach financially for most. A single implant will easily cost 4-5 thousand dollars at a minimum.
Ken, thanks for reading and commenting. I need a few implants and I’m glad we saved a decent amount in out HSA to help pay for them.
Richard, last year I dropped our dental insurance and left the company HRA contribution toward dental in the pool of money. It was just not worth it. Same for vision.
In any given year a person may come out ahead, but year after year it is unlikely to pay off. The insurance company would be out of business if it worked that way.
Self funding routine care is usually best.
Dick, thanks for reading and commenting. I agree with your conclusion ob self-funding. Funding an HSA for retirement is a good idea also. Prevention is the best medicine of all.
My first real job in 1979 was at Prudential where I rotated around to different departments in group insurance including dental. Dental insurance is a tough product because it has a mission different form other kinds of insurance. Most insurance coverage, think health or property coverage, is meant to prevent the insured from a financial catastrophe and attempts to shift risk from the policy holder to the insurer. Dental coverage attempts to get the insured to go to the dentist regularly in an attempt to prevent more costly procedures later. So, while health or property insurance can pay huge claims to an insured who needs a $200,000 surgical procedure or whose house has burned down, dental coverage encourages small claims for preventive procedures and does not provide large payments for a $25,000 claim for a mouth full of implants. I am familiar with the policies mentioned in the article because I live in NJ and get lots of junk mail pushing them. I do not sign up even though I get a cleaning and exam three times each tear. The juice is just not worth the squeeze.
Howard, thanks for reading and commenting. Your perspective on the different missions of insurance types is very interesting. I hadn’t thought of it in those terms but but it makes sense.
Good article, Rick. As I read, I found myself going over a mental checklist of possible dental and vision needs as I spend my final years on the job. Thanks.
Edmund, thanks or reading and commenting. Preventive medicine is always worthwhile, but I have to admit I did a lousy job taking care of my health in the decade before retirement. Luckily I’ve been able to recover a lot. It’s amazing how our bodies respond to the right inputs!