PPO vs Indemnity
Finding the right dental insurance plan to fit your budget and oral health care
needs can be an arduous process. PPO and indemnity are two terms that often cause
confusion when shopping for
dental insurance. Knowing the difference can make an impact on your out-of-pocket
costs and overall satisfaction with the coverage you choose.
Preferred provider organizations (PPOs)
A preferred provider organization, typically referred to as a PPO, offers a network of providers who provide services
at a discounted rate. Consumers covered by PPOs are free to seek out-of-network
services; however, they typically cost more.
Those covered by a PPO pay a fixed monthly premium, and the dental insurance carrier
pays basic medical benefits. Such plans commonly include a deductible and sometimes
consumers are require a copayment and/or coinsurance. Once care is received, the
dentist will submit a bill to the carrier.
An indemnity plan allows consumers to receive services from
any dental provider. There are no network provisions, and consumers are reimbursed
for a specific amount of a service rendered, regardless of who provides it. For
example, when someone covered by an indemnity plan receives a dental cleaning, his
or her plan pays a flat amount for the service. Any charge above that amount is
the consumer’s responsibility.
Indemnity plans can be more costly; however, these plans can be more flexible, especially
for people living in rural areas or locations where a traditional PPO network is
not as robust.
Deciphering the terminology and plan options will help secure your overall health
care future. For a full health insurance terminology visit healthinsurance.org’s glossary page.