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Differences between PPO and Indemnity dental insurance plans

Dental Shop Staff Writer | October 13, 2014

Differences between PPO and Indemnity Dental Insurance Plans

When trying to buy the best dental insurance plan to fit you, PPO and indemnity are terms that often cause shoppers uncertainty. Learning the differences between the two types can make the buying process easier and can increase your overall satisfaction with the plan you choose.


Click here to compare PPO and Indemnity plans with an instant online quote.

Preferred Provider Organizations (PPOs)
A preferred provider organization (PPO) puts forward a network of dentists who provide services at a discounted price. Customers covered by PPOs are able to select their own provider, but it must be within the plans list of preferred providers or you will have to pay a lot more money to use an out-of-network dentist.


The benefit of a PPO dental insurance plan is that by using an in-network dentist you will generally pay less for the services.  The insurance company has already negotiated a price for each service that is generally quite a bit less than what you would be charged without insurance. 


Also, with a PPO dental insurance plan, the dentist’s office files the dental claim directly with the insurance company.  The consumer would simply pay the dental office for their share of the services.  The benefits for a PPO dental insurance plan vary from plan to plan, but most cover preventative services and many offer coverage for basic and major services as well. 


Indemnity Plans
Indemnity plans, also known as fee-for-service plans, allows the users to receive dental service from any dentist. There are no network limitations because users are reimbursed a certain amount for the service.


When somebody covered by an indemnity dental insurance plan gets a root canal, their plan pays a specific amount for the service. Each service will have its own pre set coverage and anything above that amount is the consumer’s responsibility to pay.  Indemnity plans can cost more; however, these plans can also be more flexible in your choice of providers.


Unlike a PPO plan, the consumer generally must complete the paper claim form, submit the form to the insurance company and wait to be reimbursed for the services. 


Indemnity plans can be the smart choice for those who don’t have a large PPO network where they live, or want to keep their non-PPO dentist. 


The difference between a fee-for-service plan and a PPO is that a fee-for-service dentist usually is not reimbursed at the same amount as a PPO dentist. This means you might also pay a bit more for your dental care.


Example of Root Canal Service – PPO Plan
Dentist Billed amount = $1200
Insurance reduced amount = $1000 (insurance negotiated a lower cost of the service)
Percentage plan pays (50% example)  = $500
Patient Pays = $500


Example of Root Canal Service – Indemnity Plan
Dentist Billed amount = $1200
Insurance allowed amount = $1000 (insurance allowed amount is based upon average cost in your area)
Percentage plan pays (30% example)  = $300
Patient Pays = $900