What Type Of Dental Insurance Is Best For You: HMO Vs. PPO

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When trying to select a dental insurance plan, deciding between a Health Maintenance Organization (HMO) and a Preferred Provider Organization (PPO) can feel like a root canal. However, knowing what the main differences are between the two can make your decision much easier. Here are the major differences between the two types of dental plans:

What They Are

HMO: HMOs require some type of premium payment from patients for access to a network of dental care providers. In return for the premium, the HMO will cover the rest (or a portion of the rest) of the costs for your dental services.  According to DentalInsuranceHelper.com, to use a dentist outside of your HMO network, you'll have to pay the entire dental bill yourself.

PPO: Like an HMO, patients covered by PPO plans must use the professionals that are part of the PPO network if they are to receive the full insurance benefits. Insurance providers offer referrals to dentists with whom they've pre-negotiated a rate. However, patients can also see dentists outside of the PPO network, but their insurance coverage won't be as comprehensive. They will also likely have to pay a bit more for dental services obtained outside of the network. (For more information on dental insurance, see How To Get Dental Insurance.)

What Is Covered

HMO: Participating dentists provide care to everyone who joins the network. An HMO plan will cover basic services such as regular exams, cleaning and dental X-rays. Members often won't have to pay for the basic services, but less common procedures such as dental crowns, bridgework and dentures will require patients to cover some of the cost.

PPO: Dentists can turn away eligible patients in some plans that don't allow dentists to be fully reimbursed for their services. Some policies have a cap on coverage, such as $5,000 in dental care per year, or a lifetime coverage cap. Some caps might be as low as $1,000, which can be exceeded after one expensive service such as a root canal.

How They Are Paid

HMO: Dentists are paid monthly by the insurance provider, usually a fixed monthly sum. According to DentalInsuranceHelper.com, because HMO dentists are paid set fees, the less treatment they provide, the more profitable they are. This could provide an incentive not to increase their patient loads.

PPO: Dentists who are part of the PPO network agree to lower costs for patients covered by a certain insurance provider in exchange for patient referrals from the insurance company. Dentists are paid in full for their services. Most PPOs have deductibles that clients must pay before coverage kicks in. The deductibles may be small, but they can add up for a family.

Difficulties

HMO: It's expensive to seek a dentist outside of the network, which requires patients to pay the full cost for their dental care. Some HMOs don't allow patients to select dentists outside their network.

DentalInsuranceHelper.com reports that some patients complain that it's difficult to get their desired services through an HMO plan because their dentist provides only minimal services.

Because PPOs pay dentists more, more dentists may prefer PPO plans and join the PPO networks. This could lead to fewer dentists to choose from in HMO plans, according to DentalInsuranceHelper.

PPO: If your dentist isn't in the PPO network, it can be expensive to use one outside of the network, resulting in limited benefits and increased copays.

Advantages

HMO: Patients can't be turned away for care if using a network dentist. Additionally, HMO plans often allow low monthly payments for copays, making them more affordable. Finally, most insurance providers offer a variety of HMO plans to choose from.

PPO: Clients can go to any dentist that will accept them, but they get additional savings by using a dentist in the provider's network. Deductibles are low, sometimes around $50, and some plans have no deductible at all.

Because there are so many dentists in PPO plans, there are often no wait times or short wait times for basic services and preventative care.

A PPO will usually require less paperwork than an HMO would for the patient which many patients find convenient.

Disadvantages

HMO: If you travel frequently or want the option of seeing your own dentist who isn't in the network, HMOs may limit your options. Wait times at HMO dentist offices are often longer than the wait times at PPOs.

PPO: Deductibles for patients, while often low, can add up for families. Patients can be turned away for service, and some plans have limits on the amount of coverage provided.

Now that you know the differences between the two plans, you can make an informed decision about which type of coverage will work best for you and your family. 

Sources

Last Updated: January 20, 2012
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About Aaron Crowe Aaron Crowe is a contributing author to CanDoFinance.com.

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