Is it wrong when your health insurance gives you certain money to cover something and you spend it elsewhere?

Last winter I had to get a root canal, followed by a very expensive crown. At the time, I was in school so I was under my step-mom's health insurance. The bill is very costly, and I haven't been able to come up with any money for it. My mom told me that the receptionist at the dentist told her that my dad took the insurance money, and it didn't go toward my crown. Is that illegal? I don't have any proof that he did this....
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It's not illegal, but it's dumb. The dentist still needs to be paid . . .whoever signed for it, well, he'll take them to collections.
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