Dentists make approximately $130,000 per year. This translates into expensive costs for the average individual who needs dental work. Many businesses offer dental benefits to employees to help with these expensive costs while others leave dental care up to the individual. The two types of basic dental insurance are fee for service and managed care.

Fee for Service

Fee for service plans give an individual the freedom to choose any dentist they desire. The policy holder pays the dentist up front for all dental work. The policy holder is then reimbursed by the insurance company when the direct reimbursement style of fee for service insurance is used. An indemnity dental plan gives the policy holder the same freedom of choice regarding the choice of dental provider. However, indemnity insurance plans do not reimburse the policy holder for the actual cost of the procedures. Indemnity plans have a set reimbursement amount for each dental procedure that is available. Some indemnity plans allow the policy holder to pay the difference in cost that exists between what the insurance policy will cover and the actual cost of the procedure. The dentist then files a claim against the policy holder’s insurance company in order to obtain the full amount. Others require that the policy holder pay the full amount up front and file a claim personally in order to recoup the designated amount.

Managed Care

Managed care plans include preferred provider plans (PPO) and point-of-service plans (POS). These types of plans require the policy holder to select from a list of dentists who have agreed to join the plan’s network. The dentists offer their services at discount rates in return for the guaranteed business they receive from being part of the network. Another type of managed care plan is the dental health maintenance organization (HMO), also known as the capitation plan. These plans transfer a great deal of the risk onto the dentist by paying the contracted dentist a set amount for each individual that is covered in a policy. If an individual who is covered by that policy needs dental care that costs more than the set fee paid by the HMO, the dentist incurs the additional costs. This can mean that individuals needing major dental care can actually cost a dentist more money than he is earning.

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