Like all types of medical insurance policies, dental insurance plans come in all sorts of different shapes and sizes. While not mandatory like basic health insurance plans, dental insurance coverage is an important investment that can help protect your oral health and overall medical budget.
There are two main categories of dental insurance coverage available to people across the United States: traditional indemnity dental insurance and managed care network plans. Indemnity dental insurance plans are the type that you are most likely to be familiar with, requiring you to pay for your dental work upfront and then providing a percentage of the cost as a reimbursement once a claim has been submitted and approved. Most indemnity plans provide reimbursement for claims either based on a percentage of the total fees paid or a schedule of set fees. Managed dental care plans offer policyholders networks of established dentists that the insurance covers at specific rates so that you generally do not need to pay upfront any generic dental work done or, with some plans, make any payment at all. Popular managed healthcare plans include preferred provider organizations (PPOs) and dental health maintenance organizations (DHMOs), in addition to the less common dental exclusive provider organizations (DEPOs) and point of service plans. Many people also opt for dental discount plans (DPPs) that, while not insurance, offer significant discounts on dental services to enrolled participants. Keep reading to learn more about the different type of dental insurance plans to help you find the right dental plan for you and your family.
The most traditional type of dental insurance policy is the indemnity plan. While a policy may not specifically call itself an indemnity plan, if it covers a percentage of eligible costs after a policyholder submits a claim, then it is an indemnity policy. With most indemnity dental policies, you can choose to visit whatever dentist you like to take care of your dental work. Individuals who prefer to have as much freedom of choice for service provider as possible generally choose this type of dental insurance. At your visit, you pay the complete cost of all services and then submit a claim to your dental insurance provider for reimbursement. Some indemnity plans allow you to submit pre-claims for planned preventative visits or major dental work, that way they know exactly how much they will be expected to cover themselves and how much they will be reimbursed for later by the insurance provider. Policyholders may have to wait a period of time before being able to render any serious work, a waiting period that some insurance providers require to ensure that no one is signing up for the policy to take advantage of emergency dental needs.
Many dental indemnity plans have a maximum for the amount of coverage they will provide you for any given dental service received, known as the usual, customary, and reasonable (UCR) fee. In dental plans with UCR fees, the insurance provider will cover a set percentage of either the dentist’s fee or the dental plan’s scheduled “reasonable” fee, whichever is lower. Dental insurance plans with UCR caps work with a third-party plan administrator who determines what the plan’s “customary” charges are. Unfortunately, these UCR fees are not regulated by any government body and may not take into account regional differences in customer pricing or other important factors for determining dental service prices. As a result, UCR fees for the same dental services can be significantly different between dental policies. To make sure that you don’t end up with a plan that costs significantly more than you expect, make sure to look into the UCR fees list of an indemnity dental insurance plan before making the decision to invest in this type of plan.
Reimbursement with dental indemnity policies generally occurs through either a direct reimbursement scheme or a schedule of allowances plan. Direct reimbursement dental insurance programs are self-funded plans that provide reimbursement based on the total money spent, not on the type of dental services received. With most direct reimbursement plans, the policyholder pays the dentist upfront for services received and then submits an invoice to claim reimbursement from the insurance provider. According to the terms of the insurance policy, the insurance provider will pay back a certain percentage of eligible costs. Some direct reimbursement insurance policy providers have a streamlined system that often allows the patient to avoid submitting a claim.
Table or schedule of allowances dental insurance plans, on the other, pay a set amount based on each dental service received. With this type of plan, you can choose to see whatever dentist you would like and pay for services received upfront. Once your dental work is completed, you submit a claim to your dental insurance provider to receive a set amount reimbursed, regardless of how much you actually spent on services received. Table of Allowances indemnity dental insurance policies can make it easier to estimate your out-of-pocket costs, since you can check how much you will be reimbursed for services on your insurance provider’s list of covered services before you schedule any dental work.
In addition to traditional indemnity dental insurance policies, there are managed care dental insurance policies. Managed care dental insurance is similarly set up to managed care medical insurance, with the two most common types being dental health maintenance organizations (DHMOs) and dental preferred provider organizations (DPPOs). With a DHMO, or capitation plan, policyholders have a network of dentists to choose from to visit for free or reduced cost dental work. These dentists are essentially prepaid set fees for every DHMO patient that has chosen them as their primary dentist. Policyholders are then allowed to see their DHMO primary dentist for all necessary dentist work at no cost or for a co-payment of agreed upon fees. DHMO administrators rarely reimburse patients or dentists who are out of the DHMO network for dental services performed, so policyholders of capitation plans should be careful to visit only approved dentists in their network. Most DHMOs do not require policyholders to pay deductibles before treatment or submit claim forms for dental services rendered. Even more, many capitation plans have no coverage maximums or require policyholders to face a long waiting time before coverage can kick in. In many cases, a DHMO is one of the cheapest types of managed care dental policies available to most people. If an out-of-network dentist is recommended to a patient for any reason, most DHMOs can at least organize some form of discount for those dental services performed by an out-of-network specialist.
DPPOs are essentially indemnity insurance plans that have contracted with a network of dentists to provide a list of dental services for set costs to DPPO members. Dentists that are part of the network cannot charge DPPO patients more than the maximum allowable fee according to the insurance provider. Like with DHMOs, DPPO policyholders usually choose to work with one primary dentist in the network. While DPPO patients are not required to see in-network dentists to receive some form of benefits from the plan, visiting out-of-network dentists will result in a receiving a low level of coverage and higher out-of-pocket costs. DPPO plans make it easy to estimate the out-if-pocket costs for your dental services because the list of fees for all dental work is available for review beforehand. DPPO doctors earn an agreed upon fee for each service provided to network patients. DPPOs are not known for offering policyholders a vast span of dentists to choose from, but do benefit from reduced dental work costs even after their maximum annual benefits limit has been reached.
For those individuals who are sure they do not need coverage for visiting out-of-network dentists, a dental exclusive provider organization (DEPO) might be a better option. DEPOs are structured like DPPOs but provide no coverage for receiving any sort of dental work from dentists outside of the network. These policies are more restrictive than DPPOs but usually also cheaper. Point of service options are available with some managed care dental insurance plans as well. Point of service dental insurance policies allow policyholders to see out-of-network dentists, usually based on a predetermined schedule of allowances that provides less coverage than the policy normally would for dental services provided in-network.
While not technically a type of insurance plan, discount dental plans (DPPs) provide program participants with access to discounted dental services with an established network of dentists. DPPs are provided by third party companies who have made an agreement with the network of dentists to create a schedule of discounted fees for program participants. Patients with a DPP pay for their dental work upfront at the already-discounted price established by the DPP, without ever having to save receipts or file claims to receive benefits. Most DPPs allow participants to take advantage of unlimited savings through their program. These discount dental programs, while offering less coverage than dental insurance policies, are generally much more affordable and often provide discounts for a significantly larger network of dentists. In some cases, DPP participants can get up to 50 percent off eligible dental services.