Disadvantages of Dental Indemnity Plans
While the cost of dental insurance varies based on location and level of coverage, the National Association of Dental Plans (NADP) explains that indemnity plans tend to be more expensive than HMO or PPO plans. The ASDA also highlights that this is one reason why indemnity plans aren't as common as they used to be.
Insurers who offer indemnity plans usually have a maximum allowance that they will pay for each dental procedure. This allowance is based on what the insurance deems to be a "UCR," meaning a "usual, customary and reasonable fee," according to the ADA. This means that, if your chosen dentist's fees are higher than your insurer's UCR, you will be responsible for paying the difference.
You'll also need to check if the proposed indemnity plan has an annual maximum. An annual maximum is the maximum amount the insurer will pay for dental care during the year. Once you reach this maximum, you need to pay for additional dental costs out-of-pocket. In contrast, HMO plans rarely have annual maximums, which could make them more cost-effective in some scenarios, reports the NADP.
Dental insurance helps you pay for the routine cleanings and dental procedures your family needs to stay healthy. When choosing a dental insurance plan, consider your family's needs and your budget. For some people, indemnity dental insurance is the best option, while others will be better served by an HMO or PPO plan.