How Much Does Choice Matter in Dental Coverage?

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Author

Yuliya Esipov
Associate Research Director, Workplace Benefits Research
LIMRA and LOMA

November 2026

For more than two decades, the dental insurance market has steadily evolved toward preferred provider organization (PPO) products. By nearly every measure, these plans have become the industry's dominant product. Against that backdrop, traditional dental indemnity plans tell a story of long-term decline. In 2001, indemnity plans covered nearly 17 million people and represented 32% of reported dental enrollment. By 2025, enrollment had fallen to about 1% of the market. The change in new sales is similarly pronounced. Dental indemnity plans accounted for 22% of dental sales in 2001. By 2013, its share had fallen to 3%, and in 2025, indemnity new sales represented just 1% of total reported sales (see Figure 1).

Figure 1. Percentage of Dental Indemnity Plans of Total Dental Plans

Filter the data in this chart by clicking on a color bar in the chart legend.

The sharpest contraction occurred early in the 25-year period. Between 2001 and 2011, indemnity sales fell from approximately 1.5 million to 282,000, a decline of almost 89%. Over the same period, indemnity in-force enrollment decreased from 16.9 million to 5.7 million. The decline was already well underway before the Affordable Care Act (ACA) implementation (2010-2014), recent digital enrollment innovations and the onset of the COVID-19 pandemic.

What was happening during these years was the "wake-up" effect of rising healthcare costs. The average cost of employer-sponsored family medical coverage more than doubled between 2001 and 2011, increasing by 113% (Figure 2). Responding to this fundamental shift toward cost efficiency, dental indemnity plans saw their share of new sales fall from 22% to just 5%. While healthcare cost growth did not directly cause indemnity plans' decline, it certainly created an environment in which cost increasingly outweighed choice, making PPO plans more attractive.

Figure 2. Average Annual Health Insurance Premiums and Worker Contributions for Family Coverage, 2001-2011

Filter the data in this chart by clicking on a color bar in the chart legend.

Source: "Employer Health Benefits: 2011 Summary of Findings," Kaiser Family Foundation

Yet indemnity plans have not disappeared. Carriers continue to administer the coverage, employers continue to make it available, and some employees continue to select it. This raises an important question: How small can the market become before unrestricted provider choice stops being a sustainable competitive advantage? The answer may reveal as much about employer and employee preferences as it does about insurance products.

The Employer Perspective

Dental benefits have remained one of the most widely offered workplace benefits, with half of U.S. employers offering dental benefits to their employees, according to LIMRA’s 2026 Employer Benefits Landscape. Employers continue to subsidize a significant portion of coverage costs, with 14% paying full premiums and 76% paying at least some portion of the premium. Participation levels also remain strong at 68% on average, one of the highest rates among core insurance benefits employers offer. These numbers show that even as product preferences evolve, overall employer interest in dental benefits remains stable.

Over the past decade, employers’ challenge has increasingly shifted from deciding whether to offer dental coverage to determining how much they can afford to subsidize dental plans and how much choice employees should have within that coverage. To manage costs, employers increasingly turned to PPOs and dental health maintenance organizations (DHMOs), which provided a compelling solution to those challenges.

Nevertheless, some organizations continue to include indemnity plans, likely responding to employee demographics that value and use broader provider access. In that sense, indemnity plans function less as a mainstream benefit design and more as an upgraded option for employees who value flexibility despite the higher costs. Dental indemnity plans serve as a niche product that can provide a competitive advantage within a benefit plan portfolio.

The Employee Perspective

If unrestricted provider choice no longer matters, dental indemnity plans should have disappeared long ago. Instead, they have persisted. That persistence suggests that there is a segment of the market that continues to place meaningful value on the ability to see any dentist, regardless of network participation. For these consumers, dental coverage may be evaluated differently. The question is not simply, "How much will this plan cost?" It may also be "Can I keep my dentist?" The distinction matters.

Many decisions involve trade-offs between price and flexibility. Airline passengers pay more for refundable tickets. Investors pay higher fees for specialized advice. Consumers regularly spend more to preserve choice. Dental insurance plans may be no different. Despite the previously discussed collapse in new sales, several hundred thousand Americans continue to maintain indemnity coverage, suggesting that a small but persistent segment still values flexibility enough to pay for it.

Long-Term Sustainability

While indemnity plans have demonstrated some persistence over the last decade, the five-year compound annual growth rate of in-force subscribers is negative 4%, indicating that new enrollment is not keeping pace with attrition in the existing block. The product’s future will depend on whether employees continue to perceive a meaningful difference between unrestricted access and access available through increasingly broad PPO networks.

If PPO networks become sufficiently extensive, provider freedom may stop functioning as a differentiator. An employee who can already visit a preferred dentist through a lower-cost PPO has little reason to pay a premium for unrestricted access. PPO plans have clearly won the battle for scale. What remains unresolved is whether PPO plans completely won the battle for preference. For dental indemnity, the decisive point may not be how many members remain, but whether provider freedom still commands a higher premium.

November 2026 MarketFacts Cover