How Dental Insurance Works
Dental insurance generally works in the same way as health insurance, but can be cheaper because of the lower cost of providing dental care. Some employers offer dental plans as part of their employment package, but some people choose to fund their own dental insurance. There are several different types of dental insurance plans available, and it is important to know how these work so you can make an informed choice as to which is best for you and your family.
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Direct Reimbursement
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Direct reimbursement is type of fee-for-service dental insurance plan that allows patients to choose their own dentist, and the insurance company pays for each service provided. Often, the patient will pay the dentists' fee up front and then be reimbursed by the insurance company. Some direct reimbursement insurance plans pay a standard amount for each treatment, with the patient making up the difference if their dentist's fees are higher than the insurance company will pay. Other direct reimbursement plans pay a percentage of every treatment, with the patient making up the difference.
Indemnity Insurance
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An indemnity dental insurance plan is a type of fee-for-service insurance that pays a set amount of money for each dental procedure that is performed. Patients may choose their own dentist, but most plans have a maximum amount they will pay for each procedure. This amount may be based on what is the average amount charged by dentists in your area for each procedure. Some indemnity plans will only reimburse a percentage of the dentist's fees. This type of insurance is sometimes combined with a preferred provider organization (PPO).
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Preferred Provided Organization
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In a preferred provider organization (PPO) insurance plan, the insurance company has a list of preferred providers. Patients must choose one of these approved dentists for their treatment. The insurance company will then pay the bill for treatment, minus any deductible. Preferred providers charge a set amount for each procedure, which has been approved by the insurance company in advance. Patients who see a dentist who is not on the preferred provider list may have to pay all of the expenses themselves, although some plans make allowances in the case of an emergency. When using a PPO, patients also need to make sure that specialist treatment is also covered.
Dental Health Maintenance Organization
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In a dental health maintenance organization (HMO), or capitation plan, the dental insurance provider contracts with dentists to provide care. Patients are assigned to one of the dentists under contract when they take out the insurance plan. Each dentist is prepaid a monthly fee, by the insurance company, to provide services to the patients assigned to them. Patients can then receive certain treatments from their assigned dentist at no cost, or at minimal cost. Some treatments may incur a higher cost. These insurance plans may also offer to pay a set amount for emergency treatments at non-contract dentists.
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References
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