What Is the Difference Between a Dental Insurance PPO & Indemnity Plan?

Preferred provider organization and indemnity plans are very closely-related group dental insurance structures. The primary distinction is that indemnity plan providers aren't normally reimbursed at the same level as PPO plan providers.

A PPO dental plan includes the insurance company, the insured members and networked providers. When you get in-network dental coverage, the provider agrees to contracted rates with your insurance company. Therefore, your co-payment and coinsurance responsibilities typically are limited by the policy terms. You often have a deductible for different categories of dental care with a PPO plan.

An indemnity plan is often known as a fee-for-service plan. A primary advantage of an indemnity plan relative to a PPO is that benefits typically are consistent across a broader range of providers. As a result, you have more choice in who you see for dental care. However, the insurer doesn't maintain the same contractual relationships with providers in many indemnity plans. Therefore, your out-of-pocket expenses on services often are higher. Indemnity plans also have a benefits cap, such as $1,000 per year, according to Delta Dental.