Dental Insurance 101: What’s Your Type?

About forty years ago, traditional dental health insurance was introduced. At that time the average annual benefit was about $1000. Although dentistry has evolved tremendously over this period of time, many plans have not changed this maximum annual benefit.

Annual benefits of dental insurance coverage would have grown to over $7000 per year by now if they had reflected the average rate of inflation. This ultimately means the average dental patient does not receive the same amount of coverage he or she received in previous years.

There are generally two common types of dental insurance plans. They are traditional dental insurance plans (or “indemnity”) and managed care plans. In recent years, many employers have introduced Direct Reimbursement plans in order to provide savings to the company and greater benefits to their employees.

Patients may select any dentist they wish to perform their dental care with a traditional (indemnity) plan. Payments for these plans are provided on a “fee-for-service” basis. With this being the case, some procedures will be covered completely, while other procedures will be covered at different percentages. Either way, the patient pays any portion not included in their individual insurance plan.

DMO’s (capitation plans) and PPO’s (ppo dental insurance) are the most common managed care plans. In these plans, benefits are usually limited if the patient chooses an “out of network” provider. The dentist is usually paid a fixed monthly amount for each patient on the plan regardless if the patient ever has any work done, in a DMO plan. A DMO may be more affordable dental insurance but DMO plans because of their low reimbursement they tend to promote less than ideal dental care as the dental office has very low incentive to provide routine hygiene and preventative services. Imagecare does not participate in any DMO plans at this time.

A dentist participates in a PPO plan by signing a contract with an insurance company enabling him or her to attract patients who are covered by the plan. In order to receive the plans maximum benefits, covered plan members must select a dentist from the network of providers. However, if a patient is willing to pay higher deductibles and co-payments they are usually able to choose a dentist outside of their network.

Many employers are beginning to offer Direct Reimbursement plans because they allow an employee to choose any dentist they wish. With these plans, patients receive reimbursement directly from their employers for any dental procedures. The company manages these plans internally, allowing them to save a great deal of money. Direct Reimbursement plans offer employees more options and control over their dental care choices, as well as lower internal costs for companies and less insurance headaches for patients and dental offices alike.