Dental Insurance 101 (Dental Insurance Plans Vary Significantly)
Posted: Friday, October 30, 2009
by Steve Thompson DDS
Imagecare Dental
Steve Thompson DDS is a Plano Dentist. Imagecare Dental serves several thousand patients in the North DFW area.
Traditional Dental Insurance was introduced about forty years ago and at that time, the average annual benefit was around $1000. Dentistry has progressed significantly since then, but many plans have not changed this maximum annual benefit. The annual benefits of Dental Insurance should have grown to $7000 per year by now, considering the average rate of inflation. What does this mean for the average Dental patient? This means that he/she does not receive the same amount of coverage that was received a few years ago.
1. Traditional (or Indemnity) Plan
2. Managed Care Plan
A short while ago, many employers introduced the Direct Reimbursement plan which has a two pronged benefit.
i. It provides savings to the company, and
ii. Has greater benefits to the employees
Patients are free to select the dentist they want to be treated by under the Traditional (Indemnity) Plan. The payments for these plans are provided on a 'fee-for-service' basis. In this situation, some procedures may be covered completely, while others may be covered partially. Either way, the patient pays for any portion that is not included in their individual insurance plan.
The most common managed care plans are
i. the DMO's (Capitation) plan, and
ii. the PPO's plan.
In these plans, the benefits are limited if the patient chooses an 'out-of-network' provider.
Under a DMO plan, the dentist is normally paid a fixed monthly amount for each patient registered with them, regardless of whether they have any work done.
To participate in a PPO plan, the dentist needs to sign a contract with an insurance company, and this will enable the dentist to attract patients who are covered by that plan. To receive maximum benefits, it is advisable for the covered plan member to select a dentist from the network of providers. In a situation where the patient has opted to pay higher deductibles and co-payments, then they are in a position to choose a dentist outside their network.
Nowadays, many employers are starting to offer Direct Reimbursement plans, because this allows the employee to choose any dentist they want to be treated by. Under this plan, the employee will receive the reimbursement directly from the employer for any dental procedure. This is managed internally by the company, thus allowing it to save a great deal of money. Since this plan also offer employees more options and control over their own dental care choices, lowers internal costs for the company and results in less insurance headaches for patients and dental offices alike, it looks like a win-win situation for the employer and the employee.
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