Indemnity dental insurance is one of the several insurance coverage schemes that can be accessed by the American citizens in need of seeking oral health care (Manski et al., 2015). Indemnity dental insurance is a fee-for-service plan, meaning that individuals who subscribe to this type of plan must pay for their dental procedures in full and then submit a claim to the insurance provider (carrier) to be repaid or reimbursed (Okuji, 2016; Pati, Shea, Rabinowitz, & Carrasquillo, 2005). The carrier processes payments to the plan member or to the dentist only after the insurance entity receives and reviews the dentist’s bill. The present paper undertakes to examine the pros and cons of indemnity dental insurance, before discussing the reasons why the dental profession still promotes indemnity insurance as the best type of insurance for dentistry.
In discussing the pros, it is important to note that the indemnity dental insurance provides members or patients with the freedom to visit any dentist of their choice without the usual restrictions that characterize managed care. Another advantage is anchored on the fact that most indemnity insurance plans typically cover a large portion of the patient’s dental bill. In cons, research is consistent that individuals under the indemnity insurance coverage pay more out of pocket than those under managed care insurance plans because the provider reimburses a proportion of the total cost for a given type of dental process (Manski et al., 2015). Additionally, individuals covered by indemnity dental insurance plans end up paying more for dental services offered as the insurance provider places a ceiling or top limit on how much should be reimbursed to the patient or the dentist for a particular type of dental procedure using the concept of “usual, customary, and reasonable” (UCR) fee (Okuji, 2016). Other disadvantages are nested on the imperative requiring patients to pay for dental services in full before sending a claim form to the provider for reimbursement, the mismatch that arises when dentists attempt to interpret what is “usual” or “reasonable”, and the standard reinforcing a waiting period before the insurance provider pays for specific types of dental processes (Okuji, 2016; Pati et al., 2005).
Drawing from the discussion on pros and cons, it can be argued that the indemnity insurance plan is beneficial to dentists in terms of providing them with the capacity to determine what is “usual” or “reasonable” in the reimbursement dynamics. It is beneficial to employers as they are not expected to use their financial assets to cover for the dental processes done on employees as the latter are expected to pay for the services using the out-of-pocket mechanism. Lastly, it is beneficial to employees as it provides them with the capacity to seek dental or oral health services from dentists of their own choice, hence increasing dentist-patient relationship and optimizing the quality of services provided (Okuji, 2016).
The dental profession still promotes indemnity insurance as the best type of insurance for dentistry because it does not oblige the dentist to enter into any agreement with the insurance provider. Additionally, this insurance modality is preferred because “the dentist is not held at any specific fee and is free to choose the type, intensity, and frequency of treatment” (Okuji, 2016, p. 7). Lastly, indemnity dental insurance plans are preferred by the dental profession due to their capacity to provide dentists with the opportunity to not only price discriminate among patients under the “usual” and “reasonable” fee framework, but also to use the fee-for-service structure to collect fees for services provided on a per-piece basis (Okuji, 2016).
This paper has examined the pros and cons of indemnity dental insurance, the benefits accruing to relevant stakeholders, and the reasons why the dental profession still promotes indemnity insurance as the best type of insurance for dentistry. Drawing from the discussion, it is evident that indemnity dental insurance plans have their own distinct advantages and disadvantages relative to other coverage plans.
References
Manski, R.J., Moeller, J.F., Chen, H., Schimmel, J., Pepper, J.V., & Clair, P.A. (2015). Dental use and expenditures for older uninsured Americans: The simulated impact of expanded coverage. Health Services Research, 50(1), 117-135.
Okuji, M.M. (2016). Dental benefits and practice management: A guide for successful practices. West Sussex, UK: John Wiley & Sons, Inc.
Pati, S., Shea, S., Rabinowitz, D., & Carrasquillo, O. (2005). Health expenditure for privately insured adults enrolled in managed care gatekeeping vs. indemnity plans. American Journal of Public Health, 95(2), 286-291.