Navigating Dental Insurance: PPO, HMO, and YOU


How Dental Insurance Works

At the end of 2016,around 66% of Americans had some time of dental insurance, making it a popular option for access to dental care. Dental insurance can be offered by your employer (where your employer pays a portion of your annual premium), or can be self-funded by you. There are a lot of dental insurance options out there, however, the majority fall into one of the following categories: HMO, PPO, and Indemnity.

Perhaps the first, most important thing to note about any type of dental insurance is that IT IS NOTHING LIKE MEDICAL INSURANCE. In a Simple Dollar article written by Meghan Nesmith, an insurance coordinator at a dental practice in Sacramento notes, “Dental insurance needs to be thought of more like an assistance plan, not a full, comprehensive plan.” This is because insurance plans cover a certain percentage of a procedure cost, have annual maximums that are the maximum amount they will pay out in any year, and can include deductibles and co-pays. With that in mind, let’s break down the different categories:

HMO: Health Maintenance Organization

HMO Plans are considered the most restrictive of the insurance plans, but can also be the lowest priced. With an HMO plan, you must see an HMO provider–there is no coverage outside of the HMO network. However, some HMO Plans do not have annual maximums, although they will have co-pays for procedures (like $5-$10 for cleanings and exams), and a low deductible (some can be lower than $25). Medicare and Medicaid are part of the HMO insurance network.

PPO: Preferred Provider Organization

PPO Plans allow you to go to an in-network or out-of-network provider, although you will receive the most coverage if you go in-network. PPO Plans typically have higher premiums, or monthly fees, than HMOs because they allow you the flexibility to go to any provider. You will also have an annual maximum that usually varies between $700 and $2000, and an annual deductible of between $25 and $100. If your employer offers a PPO Plan, you may expect to pay between $20-$50 a month for an individual, and if you fund your insurance on your own, then monthly rates can be between $30-$70. Self-funded plans are also more likely to be subjected to a waiting period for services like fillings, root canals and crowns, and to a minimum contract length, such as 12 months.

Dental Indemnity Plans

These plans allow you to go to any provider. You pay for the service upfront, and the plan reimburses you up to a set amount. This allows for the flexibility to go wherever you want for service, but the premiums are usually higher. These plans are common in more rural areas where PPO-network dentists may be few and far between.

For more information on insurance plans, NerdWallet has a great article that breaks down these categories into even more detail.

Which one is for you?

The best way to know which option for dental care is right for you, is to do your research and to speak with your dentist. Your dentist will be able to tell you what work you need done, and help you plan for the future. If you’re someone who is going to need a lot of work done like crowns, implants, or root canals, then dental insurance might not be worth it because once you reach your annual max, you will be paying out of pocket. Perhaps an HSA account combined with a discounted preventive plan like Totalcare makes more sense.

If in the past you’ve needed only a couple of fillings and you’re pretty good about brushing and flossing, then dental insurance may be a good option for you because your preventive care will be covered and the annual max would be enough to include a couple of fillings should you need them. Of course, no one can predict the future, but your dental history can help shed some light on what to expect.

Additional Savings: HSA and FSA

Many employers have begun offering FSA or HSA options to their employees, which can provide additional savings on dental care. Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA) are pre-tax accounts that can be used for medical expenses–eyeglasses, medical co-pays, dental services, etc.


An HSA can be be acquired either through your employer, if it’s offered, or through a bank. You can open an HSA as long as your medical insurance falls in the category of a high deductible insurance, or $1,300 for self-coverage and $2,600 for family coverage (as of 2017). HSA’s are like savings accounts, but the money you put in to them is taken out of your paycheck before taxes. You can contribute up to $3,400 for yourself or $6,750 for your family in any year. Money that is not used remains there, and may even rack up some interest (depending on the account).


An FSA is offered only through your employer, and is not tied to high deductible regulations. You can contribute up to $2,600 into an FSA account in a year, but any money that you do not use in the year, you lose–with two exceptions. Your employer can opt to provide you with up to 2.5 months of grace period in the following year, or can allow up to $500 to rollover into the next year.

If you are someone without dental insurance, putting money into an HSA or FSA for dental services can be a smart idea. Even if you have dental insurance, it can be wise because once you reach your annual max, you will be paying out of pocket. Having a pre-tax savings account can be helpful. Lastly, you can use an HSA or FSA account to pay for discounted services, receiving additional savings.

The only thing to keep in mind with the HSA or FSA is that typically you should be paying for services that have already been completed. So if you’re trying to take advantage of a discount plan that will span the whole year or cover several procedures, you may run into difficulty with using the HSA or FSA. One suggestion that we liked: use a rewards credit card to pre-pay for a discounted service, then once the service is done, send in the receipts for reimbursement through your HSA or FSA account. That way, you get the points on your credit card, the discounted service AND the pre-tax reimbursement.