The world of insurance is complicated, sometimes needlessly so. One topic we discuss with clients on a daily basis is networks, or more simply “who accepts this plan?” It’s confusing, so let’s start by explaining what a network, HMO, PPO, and Indemnity plan is.
Network is the easiest of these to understand because it is a word used outside of the insurance industry. In insurance a network is a group of doctors that sign an agreement with that network. Doctors (providers) are then bound to the network, which typically requires them to charge members of that network a reduced rate for their services. In return for lowering their prices, network providers (doctors) can expect to receive more customers. Some dental insurance companies keep premiums down by only offering plans that use a network.
Larger networks typically have smaller discounts, while small networks can offer deeper discounts. This is the primary difference between a PPO (Preferred Provider Organization) and a HMO (Health Maintenance Organization). HMO’s generally have less options because less providers are part of the HMO, but the discounts are deeper. PPO’s generally have more providers in more areas, because more doctors agree to the network’s terms and discounts.
HMO’s tend to have less providers but it can also be the most affordable. This is because HMO’s control all aspects of the healthcare. The downside of HMO’s is choice, as you are strongly encouraged to go to a HMO provider.
For clients who want more choice, an Indemnity plan allows them to see any dentist. The Spirit Indemnity plan will pay any dentist a set amount for each procedure. The payments are based on 90% of Reasonable and Customary in each area, meaning that 9 of 10 dentists charge that amount or less. So the Indemnity plan provides coverage with no networks to worry about. The Spirit Indemnity plan is perfect for people who want the freedom to see any dentist.