Happy Friday! I know most of you are in a hurry to get work over with and go home, so let’s get right into this. Recently, my employer’s HR department sent out the dreaded annual insurance email – you know, the one where they tell us how much more we will be paying for coverage in the new year and how much worse said coverage will be. To some extent, I’m lucky and thankful to be joking because at least with the health insurance, our coverage is actually relatively excellent and the company makes a very serious commitment to keeping our contributions towards the premiums very reasonable for what we’re getting. But nonetheless, we do pay at least a little bit more for less every year, just like at every other company I’ve worked for over the last several years. What can I say? Combining government and healthcare was a very, very poor decision some power hungry, vote buying politicians made a long time ago and we’re all going to continue paying for it until someone with very big balls comes along and fixes that mistake.
Anyway, this year, the health insurance only changed to a different insurer while the coverages and premium contribution stayed about the same. That’s a win in my book. But for whatever reason, the company has never had a great dental insurance option. This year, the deduction stayed the same: $20 per pay period ($40 per month). However, the $100 “lifetime” deductible we had with last year’s insurer turned into a $100 deductible without the lifetime language with this year’s. In my mind, $580 is too much to be paying for two dentist appointments a year and even in the unlikely circumstances I would need anything more than those two appointments, the insurance has the same stingy $1500 cap as last year’s.
So this year, I decided to do some checking and see if I could improve the situation. And boy, was I surprised. When I called my dentist’s office to find out how much appointments cost, it quickly became apparent that I had struck a nerve. She described a dystopian clusterfuck that basically involves providers getting screwed by the same insurers that are screwing the patients on the other side, much like health insurance. It sounds crazy, but by my not having insurance, my dentist can literally charge me less money AND make more.
How much? The standard annual protocol is one cleaning/exam/x-ray appointment and one cleaning/exam appointment. And the costs? $80 for a cleaning, $42 for an exam, and $46 for x-rays. In other words, for the $580 I paid last year, I was getting the equivalent of $290 worth of appointments. That means I was paying $290 to insure against the chance of incurring up to $1210 in additional costs. And keep in mind that if there were additional costs above $1500, I would have been paying for them anyway. And the last time I had a non-routine dentist appointment? Probably when I had my wisdom teeth removed about fifteen years ago. To sum it up, I’ve been getting robbed for however long I’ve been paying anywhere close to this much for dental insurance.
But wait, I can hear you saying. I won’t save a full $290 since the $480 in premiums would have been tax exempt, thus costing me closer to $300. And that’s true, but I’ve got it covered. In conjunction with declining the dental insurance for 2020, I also began contributing $30 a month to an FSA (flexible spending account), which is also tax exempt. Mind you that I don’t like FSAs since they are “use it or lose it” money. But in this case, I know I will use $360. $290 of it can go to the dentist appointments I just mentioned (yes, dentist appointments are FSA eligible). The rest is spoken for by a regular prescription I have. So while I will lose a tiny bit of tax shield, it will only be to the tune of $120 a year or roughly $50 in actual dollars. In the end, I will be saving about $240 in 2020 thanks to getting rid of my ripoff dental insurance.
The brilliant part? Anyone can do this kind of thing. I absolutely don’t recommend doing it with health insurance, as that would be unacceptably risky. But in the case of dental insurance that would only cover a max of $1500 a year, it’s a pretty solid win. And if you’re lucky enough to pay a lower tax rate than I do, all other things being equal, you save even more than I am. This is why I’m not terribly concerned about inflation. I can almost always find little ways to cut expenses without losing any value whatsoever. This tiny adjustment saves me close to 1% of my annual spending by itself! With just a few more like it, I will easily recoup the 2-3% inflation is likely to take away. Brilliant. Have a wonderful weekend!