Dental indemnity insurance is a type of dental insurance where claims are paid on a fee-for-service basis. The insured pays for eligible services up front and submits a claim for the dental service performed, and the insurance company pays for it as long as it is a service covered by the plan and after taking into account the deductible paid. It’s often the most flexible type of dental insurance, because policy holders can visit any licensed dentist they want. They don’t have to get a referral or visit a dentist in a particular network in order to be covered. Indemnity insurance often requires policy holders to pay higher deductibles, or some plans have higher co-pays than what is required by a managed care insurance plan.
Some services are not eligible for full reimbursement, and insurance companies often pay between 50 and 80 percent of other services. The percentage is often determined by the maximum dollar benefit or the insured’s deductible. Insurance companies will not pay out claims for dental services that aren’t covered by the dental indemnity insurance plan. The insured often reviews a table of allowances to know in advance which services are eligible for coverage and the reasonable amount the insurance company will pay for them. The table of services is considered usual, reasonable, and customary, and if the insured pays higher rates, he or she won’t receive full coverage.
The features of a dental indemnity insurance plan are appealing to individuals who want more control over their health care costs. To begin with, they can shop around for the best rates on dental services, because they are not confined to a list of in-network providers. They are often able to choose their coinsurance levels, maximum benefit levels, and deductible amounts. The maximum benefit amount is the limit of payouts the insurance company will make on behalf of the insured. When treatment costs exceed the maximum benefit, the insurance company will not be reimbursed for the difference.
Individuals who are unable or unwilling to pay out of pocket for dental services often do not choose a dental indemnity insurance plan. They often cannot afford to wait for reimbursements from the insurance companies, especially when they have competing health care and other expenses to pay for. There are some plans that will pay all costs once the insured meets a maximum out-of-pocket amount for the year, as long as those costs are usual and customary.