Dental policies can be confusing because sometimes they appear to have amount of coverage for both in- and out-of-network providers but this is not actually the case. Inside a network, dentists’ fees have been negotiated to a rate at which the insurance carrier will pay the percentage of cost indicated on the summary of benefits and coverage (SBC). Outside of a network, there are no existing agreements between the dentist and the dental insurance carrier.
If you choose to see a dentist who is out-of-network, the insurance company has agreed to pay a percentage of what is considered "reasonable and customary" for the service in the area that it was received. "Reasonable and customary" means that the price must be based on the average price that other dentists in the area charge.
Let’s look at this sample of a dental policy for a better understanding:
The first section is covered 100% both in- and out-of-network because it is preventative care. The policy covers 50% of the treatment for both in- and out-of-network. If you go to a dentist in-network and the price negotiated between the dentist and your insurance company is $120, you’ll pay $60 (50% of $120). If you go out-of-network, the dentist can charge a higher fee. If the treatment was $200, you’ll end up paying 50% of the reasonable and customary amount ($120) plus the difference between the reasonable and customary amount and the actual amount charged for the service (total charges: $60+$80=$140). While it may look like you have the same coverage, the negotiated rate within your network will ultimately save you money because it is potentially lower than your out-of-network treatments.