Dental Insurance in California

The types of benefits plans out there vary with the needs of each patient. It is important to know what type of benefit plan will be best for you before you acquire insurance.

1. the type of third party responsible for funding and administration of the plan;

Dental Service Corporations - Not-for-profit organizations such as Delta Dental Plan or Blue Cross negotiate and administer contracts for dental care for individuals or groups of patients. 
Insurance Carriers. Offer services for a fee as well as managed care plans to patients. These companies underwrite the financial risk of dental services.

Self-Funded Insurers - Benefits are paid by an employer. Usually with limitations on the services that can be provided.

2. the alternatives offered for selecting a dentist. Some plans will allow you to chose your own dentist while others limit your choices in exchange for lower insurance rates.

Open Panel dental benefits – Otherwise known as “freedom of choice” plans. Allows covered patients to receive care from the dentist of their choice.

Closed Panel dental benefits – Patients must accept care only from dentists who have signed a contract with the third party (insurance company). There are two types of closed panel plans:

Preferred Provider Organization (PPO) - This plan allows a particular group of patients to receive dental care from a defined panel of dentists. The participating dentist agrees to charge less than usual fees to this specific patient base, providing savings for the plan purchaser. If the patient chooses to see a dentist who is not designated as a "preferred provider," that patient may be required to pay a greater share of the fee-for-service. 

Provider Organization (EPO) – Patient must receive care from participating dentists only. If a patient decides to see a dentist which is not listed on the EPO panel, charges for service will not be covered by the plan. Some dentists are salaried employees under the EPO panel. Patients may be restricted to a maximum allowable amount of care within a calendar year.

3. the structure used to compensate the dentist for services provided

Indemnity Plans - Patient pays a monthly premium to the insurance company, who directly reimburses the dentist for the services provided. Patients are typically responsible for 20% to 50% of the fees. Amount of coverage is often limited.

Capitation Plans - The dentist is paid on a per-visit basis rather than for the actual treatment provided. Participating dentists receive a fixed monthly fee based on the number of patients assigned to the office. Patients may be required to pay premiums and co-payments.

Direct Reimbursement Plans - The patient submits receipts to their employer for diret reimbursement of funds spent on dental work. The plan can limit the amount that the patient is able to spend per year. Patients can select the dentist of their choice. 

4. the method by which benefits and payments are calculated.

Capitation (per capita) - The patient is responsible for payment of fees not covered by their benefits plan. The amount of payment that the dentist receives for work is often less than the cost of providing care.

Table of Schedule of Allowances - A maximum dollar amount coverage is established for each procedure. The difference between the allowed charge and the dentist’s fee is paid directly by the patient.

Direct Reimbursement - The patient pays the doctor directly for services rendered and is later reimbursed a percentage of the services by their employer.

Usual, Customary & Reasonable (UCR) - Most indemnity (traditional fee-for-service) plans use this payment schedule. Benefits are paid based on a percentage of the lesser of the dentist’s fee or the fee determined by the insurance carrier.

Understanding these differences is essential to making an informed decision when selecting a plan and using the benefits. For more detailed information, go to the California Dental Association web site.