Understanding your insurance:

Many patients express confusion over there health care coverage. Unfortunately, sometimes this causes misunderstandings between the patient and the provider. To eliminate the confusion, we would like to try to explain how your insurance works.

Dental insurance is similar but different from medical. The primary difference is there are not usually any life threatening circumstances in dentistry. As many will admit, patients tend to continually delay much needed dental work.

The second important difference is that no matter how bad your dental health may be, it isn't going to cost hundreds of thousands of dollars; a traumatic medical condition that requires significant hospitalization can quickly bankrupt a family.

There are generally, five different types of dental "insurance" commonly offered in today's market:
1. Traditional indemnity
2. Preferred Provider Organizations (PPOs)
3. Health Maintenance Organizations (HMOs or DMOs)
4. Union Plans
5. Dentical

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Traditional Indemnity:

This is what most people assume when they think of insurance. Unfortunately, due to the high cost of healthcare, this type of coverage is becoming less prevalent.

With "pure" indemnity, the insurance company is merely an administrator; your employer actually is the one liable for your coverage. The insurance company only gets paid for processing claims (usually a percentage of total claims). The insurance company actually has an incentive to be overly generous.

With traditional indemnity, you can go to any dentist you want, as long as the dentist accepts your insurance. You usually have to pay an annual deductible. A deductible is a minimum amount that you have to pay out of your pocket before the insurance will start to provide coverage. The same is true for specialists.

You also pay a copayment. Acopayment is the portion of the fees that the insurance company expects you to pay. If your insurance covers 100% of the fees, your copayment is zero. If the coverage is 80%, you have to pay 20% and so forth.

Traditional indemnity is too expensive and risky for most employers, so insurance companies developed modified indemnity; they added caps and other vehicles to reduce the risk to the employer. Caps are very common in dental insurance; this is limit on how much dental work you are allowed in a year.

Preferred Provider Organizations (PPOs):

Another common type of dental insurance is generally referred to as Preferred Provider Organizations (PPOs). It is a modification of traditional indemnity. The insurance company contracts with independent dentists, to provide dental care at a fixed contracted price (usually lower fees than normal). In return, the dentist is listed in a provider list. The dentist is reimbursed in a manner similar to traditional indemnity, but at a lower fee.

As with traditional indemnity, there is a deductible and a copayment. As with traditional indemnity, you usually have the option of going to any dentist. However, if your dentist is not on the approved list, the reimbursement is usually lower, so your copayment is higher. The same is true for specialists.

Health Maintenance Organizations
(HMOs or DMOs):

While very common in the medical field, HMOs are relatively new to dentistry, but have quickly taken a large share of the market. The reason is simple - it is the least expensive and least risky alternative for your employer. The dentist is generally paid a fixed amount (called a capitation), and other amounts are paid by the patient.

As with PPOs, the dentist contracts with the plan company (technically, HMOs are not insurance), for a reduced fee; these fees are significantly less than usual (many times zero or near zero). However, unlike traditional indemnity or PPOs, the plan company does not pay for any of these fees; the patient pays 100% of these charges (this is major difference from medical).

With an HMO plan, you usually do not have the option to go to a dentist not on the provider list; there are exceptions like emergencies. Additionally, you cannot go to a specialist until you get a referral from your primary dentist.

Some HMO's own the provider offices (e.g., Kaiser Permanente). This is less common in dentistry than in medicine.

Conceptually, you pay a nominal amount ($5 or $10 or sometimes zero) for a routine visit. This is to encourage you to stay healthy and avoid costlier procedures later. Routine procedures (such as fillings) are also usually at a significantly reduced fee.

For procedures not covered, the patient is required to pay the normal fees charged by the dentist or choose a less expensive alternative from the approved procedure list (if one exits).

Union Plans:

Union Plans are usually similar to PPOs. There is a preferred list of providers, but you are allowed to go to someone not on the list as long as the dentist is willing to accept your plan.

Union fee lists tend to be extremely low, and therefore many providers are reluctant to accept union plans.

Dentical:

Dentical is the State of California's version of the dental portion of Medicare and Medicaid. Similar to an HMO, you must go to dentist that has already contracted with Dentical. Also, similar to an HMO, there is a fixed fee schedule for procedures. However, unlike HMOs, the state pays for 100% of the fees (and there is no fixed payment to the provider).

For many major procedures, Dentical must approve the procedure before it is performed. Dentical can deny approval for a variety of reasons. There is an appeal process, that may result in more delays. The patient has the alternative to pay for the procedure out of his or her own pocket.

Since the monies for Dentical are supplied by state, reimbursement and fees can be dictated by the fiscal situation of the State of California.