Indemnity Dental Insurance Plans

A Brief Explanation of Indemnity Coverage

A dental indemnity plan is a fee-for-service plan that reimburses an enrollee for covered dental expenses. The reimbursement amount is not dependent on what the dentist actually charges but, rather, the insurance company’s own determination of "usual, customary and reasonable” fees appropriate for the care received. Inasmuch as this is a company-specific definition, the reimbursement amounts may or may not reflect the cost of dental services within the region in which the patient lives.

The process for using an indemnity plan is easy.

• Select any dentist you prefer
• See the dentist for the care you need
• Pay for the care out-of-pocket and submit a copy of the bill to the insurance company
• Receive a reimbursement for the covered services

If a dentist’s charge exceeds the rate, then the difference is the financial responsibility of the enrollee. If the charge is lower than the enrollee keeps the difference, though this is a less common scenario.

In contrast to PPO and HMO dental plans, an indemnity plan typically operates without network restrictions for its members, thus allowing them to choose the dentist of their preference. This is one of the most compelling value propositions of indemnity dental plans because dental insurance is only as good as the dentists who accept it. However, indemnity plans do have other features in common with PPO plans inasmuch as they have:

• Monthly premium
• A deductible
• A benefit design documenting what dental services are covered and what services are uncovered
• Waiting periods that need to be satisfied before some expensive procedures are available for coverage
• An annual limit on insurance payments, known as a maximum benefit

Once a more common form of dental coverage, indemnity coverage now accounts for only six percent of dental plans according to the ASDA (American Student Dental Association). Twenty years ago, indemnity plans accounted for 38 percent of dental benefits according to the American Dental Association. PPO dental insurance is now the most common form of dental coverage in the United States with over 3-in-4 dental plans being a Preferred Provider Organization.

Indemnity Plan Benefits

Dental plans do not have a standardized set of benefits but indemnity plans generally are similar to other dental plans with respect to the services they cover. It is common to see some level of coverage for the following services:

• Annual exam
• Annual teeth cleaning
• X-rays
• Pediatric sealants
• Pediatric fluoride treatments
• Fillings
• Simple tooth extraction
• Crown
• Root canal
• Implants
• Bridges

In some cases, a benefit may be covered but there may be a dental waiting period requiring the insured to be on the plan for a minimum number of months before the insurance company will pay for a specific service. This is true for most dental plans whether they are PPOs or indemnity.

One of the advantages of indemnity plan benefits is that they can be used stand-alone or alongside other dental coverage. Some people receive dental benefits through an employer, but the coverage may come with high out-of-pocket costs. In this case, a dental indemnity plan has the potential to be used to compensate for the expenses unpaid by the plan it supplements.

To see the specific dental services covered by an indemnity plan, get a free dental insurance quote and then click on the More Details arrow (see example below). If you don’t see the listing for a specific service in which you’re interested, you can click the Full Plan Information button within the More Details section.

Why Dentist Choice Is So Important

As mentioned earlier, the freedom of dentist choice is one of the most desirable features of indemnity dental plans. Why is this the case?

Dentists, like every other profession, evidence differences in talent and quality from one to the other. This matters to consumers because low quality dental work can:

• Result in the need for later repair or necessitate further dental work
• Allow significant dental issues to remain undetected
• Adversely affect oral health

A dentist's personality is also important. Many people have anxiety about visiting a dentist due to fears about painful procedures or shame about the status of their oral health. If a person connects with his or her dentist on a personal level, he or she may be less anxious about dental visits and more likely to keep up within annual exams and other periodic care promoting sound oral health. A recent dental insurance survey from DentalInsurance.com found that patient experience problems was a basis for switching dentists for 27.7 percent of all adults surveyed.

Indemnity Plan Trade-Offs

Every form of dental coverage has its advantages and disadvantages. Below is a brief consideration of pros and cons as they apply to indemnity plans.

Pros

• Maximum flexibility with respect to dentist choice
• No network limitations (for most indemnity plans)
• No requirement to get referrals for more advanced dental services

Cons

• The definition of "usual, customary and reasonable" fees is controlled by the insurance company
• Depending on the dentist chosen, there may or may not be a significant gap between the plan’s reimbursement level for a service and the actual cost of that service from your preferred dentist
• You may have to file your dental bill with the insurance company in order to obtain reimbursement    

The list of cons deserves a few comments. With respect to the potential for a significant gap between actual cost of a dental service and the plan’s reimbursement level, an enrollee can obtain information ahead of time regarding an indemnity plan's reimbursement amount. He or she may use this information to 1) negotiate with a dentist, or 2) use a less expensive dentist. A second issue is that if the dentist

The potential for the enrollee to file a dental bill with the plan in order to obtain reimbursement does mean indemnity plans can have more paperwork than some other dental coverage options. However, claim forms are typically simple and, in some cases, the enrollee's dentist may file it on behalf of the patient.

State by State Examples of Indemnity Plans

Below are examples of indemnity plans offered by DentalInsurance.com in each state. For a full list of indemnity plans offered in your region as well as other options, visit our dental insurance quote page.

NOTE - Some of the below plans may not be available in all regions of the state for which it is listed.

Beyond Indemnity Plans

In this article, you've learned many of the important considerations associated with indemnity dental insurance. However, there are more dental coverage options to weigh, such as PPO dental plans, HMO dental plans, and Dental Discount Programs. If you need information on these matters, check out our Learning Center section (see the link in the navigation menu).

Additional information about indemnity dental plans is available from the National Association of Dental Plans (NADP), a Texas-based non-profit organization that is the recognized representative for the U.S. dental benefits industry.