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What is the best type of dental insurance plan: HMO, PPO or indemnity?

If you are wondering what type of dental insurance, HMO, PPO or indemnity is right for you, the answer will vary person to person. It will depend on how much you can afford to pay in premiums and what type of service you want.

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As you can imagine, each of these different types of insurance offers their own coverage levels as well as offering different levels of flexibility, which may be important to you.

You will find that HMO, PPO and indemnity plans are very similar to their health insurance counterparts, with some minor differences. Reading through this article will help you get an idea of what each type of insurance has to offer.

Dental HMO Insurance Plans

A Dental HMO dental plan or a DHMO is the most affordable option for dental insurance. Every dentist within the network agrees to only charge the insurance company a certain amount of money for each type of service provided. Because of this, HMO providers require that the insured persons remain within the network in order to receive care. If you receive care from outside the network, then you will have to pay for your care out of pocket. There is no flexibility when using this option.

If you need to see a specialist, then you are going to have to receive a referral from your dentist. What’s more, the referral has to be to a dentist within your network or you won’t be covered for you care. Even if there are no dentists in your area that provide the additional work you need, if the dentist is out of network, you will be unable to get your care covered.

A DHMO typically has a co-pay that you will have to pay each time you visit your dentist. This copay will usually be $20 or $30; however, you can choose some plans that have a $50 or $75 copay. These plans have even lower premiums than a traditional HMO, so it simply depends on how much you can afford to pay out of pocket for each visit.

DHMOs often receive criticism because many DHMO insurance providers require the dentist to see a specified amount of DHMO patients each day in order to remain under their plan. Some argue that this means that a dentist cannot spend the appropriate amount of time needed to give a patient quality care.

Another criticism is that DHMO providers only pay a certain dollar amount for each type of service. For example, a DHMO may only pay $100 for an exam where the average cost in the dental industry is $200. The suggestion is that a dentist will use lower quality and faster methods when treating a DHMO patient because of these costs. Your best bet, if choosing a DHMO, is to do a thorough background check on the dentists in your area to see who has the best reputation regardless of who their patients are.

A major benefit to choosing a DHMO is that most well care visits are free to the insured person. Usually this means that your bi-annual cleanings are covered under your plan with no out of pocket expenses, which means that you don’t have to pay a co-pay for a well visit.

Dental PPO Insurance Plans

Dental PPO plans or DPPO is sort of a hybrid of a DHMO and an indemnity dental plan. That is because a PPO still has a network of dentists that you can choose from but it will still pay for some of your costs if you visit a dentist outside of the network.

If you do choose to go out of the DPPO network, your out of pocket costs will be higher. This is because within the network, much like a DHMO, the insurance company has negotiated with the dentist to keep costs for each type of care under a certain dollar amount. If the dentist you see out of the network stays within that agreed upon amount, then you will not have an increased out of pocket expense. Generally, however, the costs outside of the network will be higher.

DPPO providers do not require dentists to see a specified amount of patients each day so there is no concern about whether or not they will rush through an appointment. They do, however, pay no more than the agreed upon amount, which brings up some of the same concerns that a DHMO has. However, DPPO plans typically provide a higher allowance for services than a DHMO.

Of course, this higher allowance for services and the flexibility you get when you choose your own doctor comes with a price tag. Although a DPPO will be less expensive than an indemnity plan, it will be more expensive than a DHMO. In addition, many DPPO service providers require you to pay for your care out of pocket and then submit a form for reimbursement.

It will be in your best interest to find a dentist that will allow you to submit a claim for a direct pay to the dentist so that you don’t have to pay out of pocket at the time of your visit. If you have a good insurance company then it is possible to get a dentist to agree to this, especially if the dentist is well established and can afford to wait on a claim to get paid.

Much like a DHMO, you will find that your cleanings are usually 100% covered and most of the time you won’t have any out of pocket costs at the time of your visit.

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Dental Indemnity Plans

Dental indemnity plans offer you the most flexibility in terms of your care. Naturally, you pay for this flexibility with higher annual premiums than other types of insurance plans. If you want the freedom to:

  • Trade dentists whenever you want
  • Visit a specialist, such as a periodontist, without a referral

then an indemnity plan is for you.

Dental indemnity plans pay a certain percentage of your care, typically 80% for standard care and 50% for high-end care, such as crowns. Sometimes they offer three different levels of care coverage, such as:

  • 80% of cleaning, x-rays, and fillings
  • 70% of root canals, gum therapy
  • 50% of crowns, braces, etc…

Of course, you have to review your own policy to see what your dental insurance offers.

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When you choose an indemnity plan, you will receive a Table of Allowance, which will detail each of the most common treatment types and just how much they are willing to pay for each type of treatment. Most insurance companies also offer a usual, customary and reasonable fee addendum to your policy so that you understand that if the cost of care exceeds their Table of Allowance breakdown, then you will pay for the difference out of pocket.

For example, if the insurance company deems that a reasonable fee for a filling is $150 and your dentist charges the insurance company $175, then you will have to pay an additional $25 out of pocket. Before you purchase an insurance plan, you can review their reasonable fee schedule to determine if they are offering enough for the dental coverage you think you will need.

As you can see, there are a lot of things to consider when deciding between these three options. If money is a major factor, then a DHMO or DPPO may be your best choice. Once you have decided which option is best for you, then it’s time to use our free quote tool to find the best premiums.

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