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Dental PPO Plans versus Dental HMO Plans

By Insurance Industry Expert & Author
Updated on

What s the difference and does it matter?

People, other than dentists, don't read an article on dental insurance unless they're hunting for the right coverage. That's okay. We'll get you the most important facts quickly so you can get back to shopping and find the best coverage for your needs. In this article, you'll learn:

  •     The difference between PPO and HMO dental plans
  •     Why PPO dental plans often have higher premiums
  •     What are the two biggest concerns when choosing between a dental PPO and HMO

Armed with this information, you can make a more informed choice about the best dental plan for your needs.

The Basic Differences between PPO and HMO Dental Plans

PPO and HMO refer to the dentist network associated with the dental plan. PPO is an acronym for "Preferred Provider Network" and HMO stands for "Health Maintenance Organization." About eight-in-ten private dental plans are PPOs while less than one-in-ten are HMOs. HMOs pay their dentists a set monthly amount for each enrollee regardless of the services they use. A PPO reimburses a dentist based on services rendered.

Typically, a HMO dental insurance plan has a narrow network of participating dentists and services received from out-of-network dentists won't be paid for by the dental plan. A PPO dental insurance plan, in contrast, offers coverage for dental care received outside its network but it comes higher out-of-pocket costs for the plan enrollee. A PPO plan also does not require a referral before going to a dental specialist while a HMO plan will require such a referral from the enrollee's primary care dentist.

Among dental plans the network acronyms often have the letter "D" in front of them so instead of PPOs and HMOs, there are DPPO and DHMO plans. Don't worry. The "D" stands for "dental” and the guidance regarding the two network types still applies.

Why PPOs Often Have Higher Premiums

Dental plan premiums vary by the insurance company offering the plan as well as the plan's actual benefits and network type. With that said, PPOs often have higher premiums than HMOs because they have more freedom within the plan with respect to the use of dental services. Instead of a primary care dentist within a HMO deciding whether a specialist referral is necessary, the enrollee in a PPO can make that decision without need of a referral. HMOs not only restrict referrals to the judgment of a primary care dentist, there is also a tendency among HMOs to have fewer in-network providers (i.e. a narrow network).

Dental HMO/PPO Trade-Offs

While the differences between dental HMO plans and dental PPO plans are not especially complicated, the wrong choice can have negative consequences for either your wallet or your oral health. Learn what the two biggest concerns are when choosing between a dental PPO and HMO on the second page of this article.