Dental PPO Plans versus Dental HMO Plans
What’s the difference and does it matter?
Almost no one reads articles 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 PPOs often have higher premiums
- How big a priority the PPO/HMO issue is when choosing among plans
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).
If the lowest cost monthly premium is your top priority, then a HMO plan may be right for you. The HMO plan may also have a $0 deductible and/or lower out-of-pocket costs for covered services like fillings, sealants, and crowns. However, HMOs may have a smaller network of dentists, which means you have fewer from which to choose as an enrollee. If you have a preferred dentist, you should confirm his or her acceptance of the HMO plan before enrollment. There are some exceptions to HMO in-network restrictions. Certain types of dental emergencies can qualify for coverage of out-of-network care. Additionally, state law may also have some requirements pertaining to out-of-network dental services.
Most HMO plans lack a maximum limit on annual dental benefits but you should not assume this is the case. Coverage conditions are always specific to the plan itself. A HMO plan may also have restrictions on the number of times care is used in a year (e.g. teeth cleanings, x-rays).
If you worry about the range of dentists who might be available, as well as the number of specialists such as oral surgeons, a PPO may be a better option for you. If you decide to use an out-of-network dentist with a PPO, you may need to file the claim to the insurance company yourself. If you remain in-network, the dentist should file the claim for you. If you do consider a PPO remember that most PPO plans have a maximum annual benefit. While some PPOs lack a maximum benefit, it is not the majority of plans.
Similarly, PPOs are more likely than HMOs to have waiting periods before certain types of expensive procedures will be covered by the dental plan. While these waiting periods are plan-specific, they are an important point of comparison when evaluating the value of a PPO vs a HMO dental policy.
How Big a Priority Is the PPO/HMO Issue When Choosing among Dental Plans?
I always warn “Insurance is only as good as the doctors and hospitals that accept it.” This applies to dental coverage too. Before enrollment, check out the dentists who accept the dental plan. Do they receive good ratings from third-party sources such as Healthgrades, the Better Business Bureau, and Yelp? Have any of your friends or relatives used dentists from the network? Would they recommend them?
The choice between a DHMO and DPPO is a critical piece in determining what dental plan to select, but it is not the only piece. Plans that provide access to the quality dental practice of your choice must be evaluated against one another for their breadth of benefits (see our article Dental Insurance 101) and the price they charge for those benefits.