By Susan Braden
The easy answer is: It depends. First, some definitions.
Indemnity plans, also known as traditional insurance, are dental insurance plans in which the policyholder chooses any dentist he or she wishes. The patient pays the dentist directly for services, and is then reimbursed by the insurance carrier by means of a claims process. (You fill out paperwork and send it in to the carrier for processing, then they send you a check.) Typically these plans cover 50%-80% of the cost of dental work, and the remaining amount is paid by the patient.
"Cost" can be a tricky term, however. Indemnity plans determine cost in two ways:
Dental indemnity plans require a set deductible. The patient pays this amount, usually around $50-$100 per year before the carrier begins paying. Indemnity plans may also limit the amount of services covered in a given year.
This type of plan falls under the category of managed care plans: programs which have adopted a slew of tactics intended to lower the cost of healthcare, such as incentives for providers and patients to choose less costly forms of care, cost sharing, controls on admissions and lengths of stay, etc.
If you are an individual, a DHMO might be feasible due to the lower monthly premiums. Be cautious though: Find out who your provider choices are ahead of time and do some reconnaissance. Get references if you can, and check online review sites to see what others have to say about this person before you commit. Remember, it is difficult and in some cases impossible to change providers with a DHMO. Groups or businesses might want to consider an indemnity plan. However, seek out intel on coverage rates or UCR allowances. Are they reasonable? If a carrier uses tables, call your dentist to compare numbers. These plans are costly, however, and typically only cover up to $1500 per year or so in expenses.
Discount dental plans are alternatives to traditional insurance. There are no carriers and there are no claims, reimbursements or annual limits. With a discount plan, patients pay the dental provider directly for the treatment given. That’s it, there is no other payment made. Dental providers have contracted with discount plan companies to provide treatment for a set fee, agreed to in advance. In return, they get access to more potential patients by affiliating with the plan’s large network.
For many, discount dental plans make the best financial sense. Rather than paying expensive premiums only to gain partial coverage, it may make sense to pay much lower monthly fees and gain steep discounts on all of your dental work by leveraging this power of collective bargaining.
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