In the 1950’s dental insurance didn’t exist, people just paid out of pocket. Throughout the 1970-1980, Dental Insurance became more common to meet the demand of the workforce. As time passed and health insurance began consuming more and more of a business’s benefit dollars, dental insurance options developed.
Today there are 4 major types of Dental Insurance:
- Indemnity Type
- Preferred Provider Organizations (PPO)
- Direct Service Organizations (DSO)
- Membership Plans (In Office Benefit Plans)
The classic type of insurance that has co-pays, deductible and benefit limits. It also is the most expensive for the Employer because it has no cost controls or gate keepers. Dental Insurance is rarely sold to individuals due to overutilization.
Preferred Provider Organizations (PPO)
Preferred Provider Organizations (PPO) evolved in the 1990’s offering the employer lesser premiums for coverage, but fewer network providers. The provider would take a reduced fee with the hope of attracting more patients. This type now dominants the new and renewal of dental contracts. Subsequently, providers started to opt out of this type of coverage due to excessive fee reductions, excessive restrictions and fewer patients as more dentists became providers. This may offer fewer options despite a reduce premium cost.
Direct Service Organizations (DSO)
Direct Service Organizations (DSO) is a newer type of Dental Insurance offered to the public with corporation and/or venture capital groups (Heartland, Aspen and others) employing Dentists and operating clinics. This type is the least expensive, but offer the least treatment options. Coverage is only available at a corporate facility. Because it is a corporate entity, most providers have no ownership potential. This leads to younger, often less experienced providers. Many clinics experience significant turnover of doctors and staff.
Membership Plans (In Office Benefit Plans)
Membership Plans (In Office Benefit Plans) offer a new choice. This is not insurance, but a benefit plan. For a fix monthly fee, the patient receives most preventive and diagnostic procedures for free and noncovered procedures at a fixed reduction. The Dentist controls the fees and services offered. The conventional insurance company has administrative costs or profit margins that are eliminated in this plan. This type of coverage is generally offered by your existing provider and may not be open to the public on a large scale.
Dental Insurance and Dental Plans continue to evolve due to the elastic needs of employers, patients and the marketplace. It is my option, the best way to maintain lasting dental health for you and your family is to find a dentist that you are comfortable with and stay with that provider. Insurance may change, however your relationship with the dentist and staff likely will not.
The 4 Major Types of Dental Insurance brought to you by Dr. John Busby