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

Did you know that approximately ​3.5 billion​ people globally suffer from oral diseases in one form or another? Unfortunately, dental health care is not cheap, and not everyone has access to various health coverage types available.

If you do not have dental insurance, expect to pay anywhere from ​$492 to $785​ each year out of pocket for market-value dental services. And once you hit retirement age, that amount may rise to about ​$1,000 annually​, and Medicare will not cover it.

Therefore, you need to learn the type of health insurance plans that cater to dental services. That way, you can pick the right one for your needs and use it even when you retire. Some of the best dental insurance coverages will likely fall under an indemnity or Preferred Provider Organizations (PPOs) plan categories. So, it’s worth looking at both in detail.

​Read More​: Dental Insurance Basics

An indemnity plan is an insurance plan that enables you to receive dental health care from any dentist. You can do so because these plans do not have network limitations that restrict who you can see. And that is why they are also known as fee-for-service plans.

Within an indemnity plan, each dental service will have a preset reimbursement amount. You will receive this amount back from the insurance provider after paying your dentist. And if your dental procedure costs more than what has been specified, you will have to pay the remainder out of pocket.

For example, suppose your insurance company has set $120 as the payment for a filling, and your dentist charges $150. In that case, you will receive a reimbursement of $120 and pay $30 out of pocket.

PPOs usually involve a network of dentists who work with an insurance company and provide discounted prices for their services. The insurance company tends to negotiate for these discounts on behalf of the clients. In exchange, the dentists get a constant stream of patients who have opted for these plans so they don’t have to spend time marketing themselves.

As a patient under PPOs, you can select your own provider. However, that dentist has to be within your plan’s list. If you choose an out-of-network dental care provider, you will have to pay much more for their services.

​Read More​: HMO Vs. PPO Dental Insurance

While indemnity and PPO plans enable you to receive dental care at affordable prices, they work differently. Below are some of the differences that stand out.

Indemnity plans are more flexible and enable you to keep your dentist if you wish. In addition, so long as your insurance cover caters to it, you can receive specialized dental services, such as dentures. And these plans are an excellent option in areas with limited dental provider networks or if you are happy with the dental care providers you have.

On the other hand, PPO plans restrict who you can see to providers within their networks. However, they are better in areas with lots of excellent dentists. Also, since 82 percent of dental plans fall under this category, it is relatively easy to access a good provider network.

PPOs tend to involve discounted prices for dental health care services. As a result, you are likely to spend less out of pocket. However, that only applies if you stick to providers within the network. The moment you see one who is not part of your plan’s list, you are likely to pay more out of pocket even when the insurance covers part of your costs.

On the other hand, indemnity plans reimburse you a set amount for each procedure based on what the insurance company decides as the usual and customary costs. And since your dentist is not part of any network, they are not obligated to offer any discounts. As a result, you may end up paying more out of pocket for dental health care services each time.

Also, indemnity insurance coverage tends to be generally more expensive. Flexibility does not come cheap.

​Read More​: PPO Vs. DMO for Dental

Where indemnity plans are concerned, you may have to pay the money for dental work upfront. And then, you will need to fill in the paperwork to receive reimbursement. But that is not the case with PPOs.

When you are part of a PPO plan, the dental office is responsible for filing the paperwork. That way, the insurance company will compensate them directly based on the agreed-upon rates.

Do take the time to consider indemnity vs. PPOs before determining the right one for your needs. Also, read the fine print and factor in the waiting periods, co-pays, the annual maximum benefit, deductibles and so on. And then, you can settle on the plan that works best for your needs.