With so many dental insurance providers, how do you choose the right one for your insurance needs? To help you narrow down your search, this article explains the 5 different types of dental insurance plans available on the market today.
With so many dental insurance providers, how do you begin to sort through the list and understand which one would best serve your insurance needs? Unfortunately, there is no such thing as one-size-fits-all when it comes to dental insurance. So, to help you narrow down your search, let's outline the 5 different types of insurance packages on the market today.
1. Indemnity Insurance Plans
Indemnity dental insurance plans are the traditional form of dental insurance offered by most dental insurance providers. It is by far the most expensive form of insurance, and up until a few years ago was only offered to employee groups and not individuals.
With indemnity insurance, you choose your own dental care provider, and they in turn directly bill the insurance company. The coverage amount usually ranges from 50% to 80% of the UCR (usual, customary, and reasonable) amount, depending on the plan, and the coverage specifications.
The insurance company sets up UCR amounts that they will pay for each type of service. If the dentist fees exceed this amount, then you as a customer are responsible for the difference.
Maximum annual payouts per individual and family are also factors to consider. Insurance companies cap the total amount they will payout per year per individual and per family. This typically runs around $1500 per individual and $2500 per family.
Also, most of these types of insurance plans have a $50 - $100 deductible per person, and may exclude certain procedures based on pre-existing dental conditions.
2. PPO Plans
PPO stands for Preferred Provider Organization plan. These plans require that you choose dental care providers within their network of dental professionals. The insurance company negotiates lower fees with these providers in exchange for them participating within the network.
PPO premiums cost slightly less than the traditional indemnity plans. The coverage varies per PPO, but usually ranges between 50 to 80% of dental costs, depending on the plan.
As with indemnity insurance, there are also maximum annual payout amounts per individual and family, and also deductibles of $50 - $100 to be met before the coverage kicks in.
3. HMO Dental Plans
HMO plans were initially designed for large group dental coverage. The number of patients assigned to that dental clinic, and not necessarily the actual expense determines the amount of the premiums. The dental care providers receive a certain portion of the premiums as pre-payment.
The downside of HMO plans is that often times the amount the dental care providers receive doesn’t adequately cover the actual cost of the procedure. So, many professionals limit the number of patients they will see with HMO plans. They also may cut corners in the services they offer to their HMO patients to lessen their costs.
As with the other insurance plans, many HMOs have co-pays, deductibles, and maximum annual payout amounts per individual or family.
4. Direct Reimbursement Plans
Direct Reimbursement Plans aren't really considered insurance plans in the true sense of the word, but many companies are beginning to use these plans as a way to help fund employee dental costs. Here's how it works: Your company sets aside a certain amount of money in a savings fund to go towards your dental expenses. You pay the direct dental fees upfront and then your company will reimburse you from your dental fund. There is, of course, a cap on the total amount you can spend per year, which depends directly on how much your company sets aside per employee.
5. Discount Dental Plans
With discount dental plans you pay a low annual membership fee and receive a dental discount card. This card can be used at participating dental care providers. The savings usually ranges from 10% - 60% depending on the plan.
The advantages of discount dental plans are: there are no deductibles, no annual payout limits per individual or family member, no co-pays, no paperwork, and no pre-qualifications. You simply receive a discount on select dental services and procedures, depending on the plan and coverage options.
The Next Step
So, by now, hopefully you have a basic understanding of the different types of dental insurance options that are available to you. The next step is up to you. You need to choose which dental insurance type is right for you and then research the different companies, and their price points. If you are leaning towards discount dental plans, a great website to do a price comparison of plans available in your area is save-discount-dental-plans.
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