Dental Discount Plan Scams: What the FTC Wants You to Know

Dental discount plans are a popular alternative for people who cannot afford dental insurance or who do not qualify for coverage through programs like Medicaid or Medicare. These plans promise reduced rates on dental services in exchange for a monthly or annual membership fee. Some are legitimate and can provide real savings. Others are deceptive, misleading consumers about what they are actually buying.

In December 2024, the Federal Trade Commission (FTC) sent warning letters to 21 companies for marketing dental discount plans in ways the agency considered deceptive. This article explains what dental discount plans are, how they differ from insurance, what the FTC is concerned about, how to spot scams, and what legitimate alternatives exist for affordable dental care.

What Is a Dental Discount Plan?

A dental discount plan, sometimes called a dental savings plan, is a membership program that gives you access to reduced prices on dental services from a network of participating dentists. You pay a monthly or annual membership fee, and in return, you receive discounted rates when you visit a dentist in the plan's network.

Dental discount plans are not insurance. This is the most important thing to understand. With dental insurance, the insurance company pays a portion of your dental bill. With a discount plan, the plan does not pay anything. You pay the full cost of each service, just at a reduced rate. There are no claims to file, no deductibles to meet, and no annual maximums. You simply pay the discounted fee directly to the dentist at the time of your visit.

Legitimate discount plans negotiate reduced rates with participating dentists and pass those savings on to members. The discounts typically range from 15% to 60% off the retail price depending on the service. Preventive services like cleanings may have lower discounts, while more expensive procedures like crowns or root canals may have higher percentage discounts.

How Discount Plans Differ from Dental Insurance

Understanding the differences between discount plans and dental insurance is critical to avoiding being misled. Dental insurance is a regulated financial product. Insurance companies are licensed by state insurance departments and must meet specific financial, legal, and consumer protection requirements. When you have dental insurance, the insurance company pays a portion of covered dental services, and you pay the remaining balance through copays or coinsurance.

Dental discount plans are not regulated as insurance in most states. While some states require discount plan companies to register with the state insurance department, the regulatory requirements are generally less stringent than for insurance companies. Discount plan members have fewer consumer protections than insurance policyholders.

Dental insurance typically covers preventive care at 100%, basic services at around 80%, and major services at around 50%, subject to annual maximums and deductibles. With a discount plan, you get a percentage off the retail price but pay the entire discounted amount yourself. For someone who needs a $1,200 crown, dental insurance might pay $600 and you pay $600. A discount plan might give you 30% off, meaning you pay $840 yourself.

The FTC's December 2024 Warning Letters

In December 2024, the Federal Trade Commission sent warning letters to 21 companies that market dental discount plans. The FTC's primary concern was that these companies were using advertising and marketing language that blurred the line between discount plans and insurance, potentially misleading consumers.

Some of the deceptive practices the FTC identified included using terms like dental coverage, dental benefits, and dental plan in ways that implied the product was insurance. Other companies used marketing materials that mimicked the look and feel of insurance enrollment forms. Some companies claimed customers could save unrealistic amounts on dental care or failed to clearly disclose that the product was not insurance.

The warning letters put these companies on notice that the FTC considers their marketing practices to be potentially deceptive under federal consumer protection law. If the companies do not change their practices, they could face enforcement action including civil penalties. The FTC did not take legal action against the companies at the time of the warning letters but reserved the right to do so.

Red Flags: How to Spot a Dental Discount Plan Scam

Not all dental discount plans are scams. Many are legitimate businesses that provide genuine savings to their members. However, there are clear warning signs that a discount plan may be deceptive or fraudulent. Knowing these red flags can help you avoid losing money on a product that does not deliver what it promises.

Be cautious if the marketing materials describe the discount plan as insurance or use terms like dental coverage, dental benefits, or health plan without clearly stating that the product is a discount plan and not insurance. Legitimate discount plans will have a clear disclaimer stating they are not insurance.

Watch out for claims of guaranteed acceptance for insurance. Since discount plans are not insurance, guaranteed acceptance is meaningless in this context. If a company is advertising guaranteed acceptance and implying you are getting insurance, that is a red flag. Also be wary of savings claims that seem too good to be true, such as promises of 70% or 80% off dental services.

Another warning sign is a lack of a verifiable provider network. Before purchasing any discount plan, you should be able to search the provider network and confirm that dentists near you participate. If the company cannot provide a searchable provider directory or if the dentists listed do not confirm participation when you call, that is a problem.

High-pressure sales tactics, difficulty finding the plan terms and conditions before purchase, and companies that are not registered in your state are additional red flags. Legitimate companies will let you review the plan details before you commit.

How to Verify a Dental Discount Plan

Before purchasing a dental discount plan, take these steps to verify it is legitimate. First, check with your state insurance department to see if the company is registered or licensed in your state. Many states require discount plan organizations to register and meet minimum requirements. Your state insurance department's website usually has a searchable database.

Second, search the provider network. A legitimate plan should have a searchable directory of participating dentists. Find at least two or three dentists near you and call their offices to confirm they accept the discount plan and to verify the specific discounted rates for common services like cleanings and fillings.

Third, look for complaints. Check the Better Business Bureau, your state attorney general's consumer protection division, and online review sites for complaints about the company. A pattern of complaints about undelivered savings, difficulty canceling, or unexpected charges is a warning sign.

Fourth, read the plan terms carefully before purchasing. Make sure you understand what the membership fee is, how long the commitment period is, what the cancellation policy is, and exactly what discounts are offered. If the terms are unclear or difficult to find, consider that a warning sign.

When a Dental Discount Plan Might Make Sense

Despite the FTC's concerns about deceptive marketing, legitimate dental discount plans can be a reasonable option for certain consumers. If you do not have dental insurance, cannot afford dental insurance premiums, or do not qualify for programs like Medicaid or VADIP, a legitimate discount plan can reduce your out-of-pocket dental costs.

Discount plans tend to work best for people who need only routine dental care like cleanings and exams. The membership fee is usually lower than dental insurance premiums, and there are no waiting periods. If you are relatively healthy and just need to reduce the cost of twice-yearly cleanings, a discount plan may save you money compared to paying full retail prices.

However, for people who need significant dental work such as crowns, root canals, or dentures, dental insurance is generally a better value than a discount plan. Insurance pays a portion of the cost for major services, which can result in much lower out-of-pocket expenses than a discount plan that gives you a percentage off the full price.

Legitimate Alternatives for Affordable Dental Care

If you are looking for affordable dental care, several legitimate options exist beyond discount plans. Traditional dental insurance is available from many private insurers and typically covers preventive care at 100% with copays for basic and major services. Monthly premiums range from about $20 to $60 or more for individual coverage.

For people 65 and older, Medicare Advantage plans frequently include dental benefits. According to CMS data, approximately 98% of Medicare Advantage plans in 2026 offer some level of dental coverage. Some plans include comprehensive dental benefits at no additional premium beyond the regular Medicare Advantage plan cost.

Veterans enrolled in VA health care can access dental coverage through the VA Dental Insurance Program (VADIP), which offers plans through Delta Dental and MetLife at group rates. Medicaid provides dental coverage in many states, though the level of coverage varies. Community health centers funded by HRSA offer dental care on a sliding fee scale based on income.

Dental schools are another option. Dental schools and dental hygiene programs offer services performed by students under faculty supervision at reduced rates. The care is typically thorough and follows the same standards as a private dental office, though appointments may take longer.

FTC Consumer Protection Resources

If you believe you have been misled by a dental discount plan, you can file a complaint with the FTC at consumer.ftc.gov. The FTC collects consumer complaints and uses them to identify patterns of deceptive business practices. You can also file a complaint with your state attorney general's consumer protection division and your state insurance department.

The FTC's consumer education website at consumer.ftc.gov provides detailed guidance on how to evaluate health-related products, spot health insurance scams, and protect yourself from deceptive marketing. The guide on how to spot health insurance scams is particularly relevant for anyone considering a dental discount plan, as it covers many of the same warning signs.

Before purchasing any dental product, whether it is insurance or a discount plan, take the time to verify the company, understand exactly what you are buying, and compare it to other options available to you. A few minutes of research can save you from paying for something that does not deliver the value it promises.