Learning the lingo: Common Dental Plan Terminology
Don’t let insurance terms intimidate you. We’ve provided a high-level explanation of some basic dental plan terminology. This quick list may help you identify important elements of a dental plan.
Important Plan Terms
PPO Network – An insurance company or preferred provider organization contracts with providers to participate in the network. In the contract, the provider agrees to charge the insurance company’s customer a set, discounted rate for certain services and procedures. Therefore, using an in-network provider will save you money.
Annual/Benefit Year Maximum – This is the maximum amount that a plan will pay for care expenses incurred during a specified period – calendar year or benefit year. This amount varies by plan.
Deductible – This is the amount that you are responsible for paying for covered dental expenses before the insurance carrier pays the plan’s benefits. Many plans have a yearly deductible per person up to a maximum amount. Depending on your plan, the deductible may or may not apply to preventive services in Class A.
Coinsurance – Your insurance carrier pays a fixed percentage of a covered dental expense. You are responsible for paying the remaining balance or percentage of the bill.
Types of Plans
PPO Plan – A type of insurance plan that offers access to a network of participating providers (See PPO Network). This type of plan does not typically require referrals to see specialists nor do you have to elect a primary provider. Plans will pay for a portion of out-of-network benefits either based upon a specific level of what other local dentists charge or from a fee schedule. Therefore, you can save more money by seeing an in-network provider.
Special Note: Pay close attention to how out-of-network claims are reimbursed. Some types of PPO plans reimburse out-of-network charges based upon a fee schedule or charge amounts listed like a menu of benefits. (These are known as Fee Schedule or MAC Plans in employer-sponsored benefits.) We suggest that you use in-network providers with these plans. Or, you may receive a larger bill than expected with out-of-network providers.
Indemnity Plan – These are also known as “fee for service” plans. The plan pays the maximum allowable charge or the designated amounts/percentages per service, and operates without provider networks. You are usually required to pay the total cost of the bill at the time of service. The carrier will directly reimburse you the cost of the benefit once the claim is approved.
Dental Discount Plan – This is not an insurance plan but an offer to access dental care at discounted rates from participating dental providers.
Dental Plans and Service Classifications
Dental plans will sort covered services and procedures into three or four categories or classifications. Your summary of benefits may express the amount of coverage for in-network services as percentages per each classification. Coinsurance may apply to services and procedures that are not covered by the insurance company at 100%.
Preventive Services (Class A or I) – This category is pretty descriptive, and includes procedures and services that are typically considered routine and preventive or diagnostic in nature, such as routine exams and dental cleanings. Diagnostic procedures, such as x-rays, are other common preventive services filed in this category.
Basic Services (Class B or II) – This category of dental procedures and services typically includes simple restorative services (fillings) and simple extractions.
Major Services (Class C or III) – A major services category often includes more complex dental procedures and services, such as bridges, crowns, dentures, oral surgery or root canals.
Remember that not all dental plans were created equally. Benefit maximums, dental plan categories and deductibles can vary per plan and by carrier. It is up to you to review each plan carefully to decipher if it meets your healthcare and budget needs.
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