What is Indemnity Dental Insurance?

Pros and cons of indemnity dental insurance

Indemnity dental insurance plans offer simplicity and flexibility but have some downsides. Here are some pros and cons of indemnity dental insurance:²

Pro: Choose your own dentist

Indemnity dental plans let you choose any dentist without restriction. This can help you continue visiting a preferred provider if you have a long-standing relationship with them to ensure continuity of care.

Pro: No network limitations

Indemnity dental plans do not negotiate contracts with specific providers to build a provider network. Instead, they typically pay you benefits after you pay a provider directly. As a result, you’re not limited by a network of providers. You can get similar levels of coverage for any covered procedure at any provider you choose, giving you more freedom to seek out new providers.

Pro: No referrals needed

Indemnity dental plans don’t require you to select a primary care dentist nor seek referrals from that dentist. Instead, you can schedule appointments with any specialist whenever you need care. This makes it easier to seek out specialized care. For example, if you need treatment for gum disease, you don’t need to visit your primary care provider first. You can instead schedule an appointment with any periodontist you prefer to get specialized care.

Con: More expensive than other dental insurance plans

The flexibility of indemnity dental plans means the insurer must process claims and reimbursements for treatments at a wider range of providers. This additional administrative burden means the insurer must charge higher premiums, meaning indemnity dental plans tend to cost more than other dental plan types.²

Con: UCR fees can vary

Insurers calculate UCR fees differently. Therefore, one insurer may offer less coverage than another for the same procedure. As a result, the policyholder may pay for the same treatment at a different dentist.

Furthermore, individual procedures may have different UCRs on the same plan. For instance, an indemnity plan may offer a different coverage amount for root canals and fillings, even though both are basic services. In both cases, the policyholder may not get as much as they need. They must consider cost differences to find a plan that suits their needs.

Con: You may have to file claims with the insurance company yourself

Indemnity dental plans generally make you file claims yourself with the insurance company after paying for dental care out of pocket. This is different from most managed care plans. Under a managed care plan, you provide your insurance information to the dental provider, who contacts the plan for reimbursement.

As a result, indemnity plans may involve more work on your part. Plus, since you pay out of pocket up front, you must have the cash available to cover the full treatment before seeking reimbursement.

Other types of dental insurance plans

Indemnity dental plans offer advantages but aren’t for everyone. Here are some alternative plan types to consider:

Dental Preferred Provider Organizations (DPPO) plans

A Dental Preferred Provider Organization plan, or DPPO, offers a network of providers who provide services at lower rates.³ They often cover the full cost of preventative care, as well as 50% to 80% of basic and major services. DPPOs often incorporate indemnity features to provide some degree of coverage for out-of-network providers based on UCR fees.

With DPPOs, premiums are lower than indemnity plans but higher than all other plan types. Additionally, you may have to meet a deductible before coverage takes over. Annual maximums may limit your yearly coverage. Overall, these plans offer more flexibility than others in exchange for higher costs.

Dental Health Maintenance Organization (DHMO) plans

A Dental Health Maintenance Organization plan, or DHMO, is less flexible than a DPPO but costs less. Your insurance provider will assign you a primary care dentist, and referrals are required for specialist care.³ DHMOs come with networks of providers, but unlike DPPOs, they rarely cover out-of-network providers, which may restrict your options.

Premiums are lower in exchange for this flexibility, and there are no deductibles. Instead, you pay coinsurance or copays when receiving care. Copays are fixed amounts paid for specific services, while coinsurance is a percentage of the cost of treatment. These can work well for people who primarily need preventative care and want to keep costs low.

Dental discount plans

Dental discount plans technically are not insurance. Instead, these are membership plans that offer discounted rates on care at participating dentists in exchange for an annual membership fee.⁴ Fees tend to be lower than premiums paid for indemnity plans, DPPOs, and DHMOs. Plus, discounts often apply directly at the time of service, eliminating the need to file claims.

However, these plans tend to offer less coverage in terms of dollar amount. Therefore, dental discount plans can be good options for people who need only basic dental care and want to keep costs as low as possible.

Point of service plans

Point of service, or POS plans, combine some elements of DPPO and DHMO plans.⁵ Like DHMOs, these plans require you to choose a primary care provider and get referrals from them to see specialists. However, like DPPOs, you can visit out-of-network providers and receive some level of coverage. When seeking care, you’ll make copayments. In-network copayments are much lower. There is no deductible for in-network services. Premiums typically range between DPPO and DHMO plans. Overall, POS plans may work for policyholders who want to balance costs, coverage, and flexibility.

Get a quote for dental insurance

Indemnity dental plans offer flexibility, making it easy for policyholders to continue care with their current provider or find a new one. However, premiums can be high, UCRs vary, and you may have to file the paperwork yourself.

If you’re looking for a dental insurance plan that offers excellent coverage at affordable rates, Aflac is here to help. Chat with an agent to explore your dental insurance options and get a quote today.