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.
East Madison Dental’s insurance coordinator Christian Oujo helps us break all of these terms down:
Annual Maximums, Deductible, Percentage Coverages and Frequencies:
Annual Maximum: Almost all dental insurances have an annual max, which is the maximum amount that insurance will pay out each year. Once that is met, everything after that is out of pocket for the patient. Most of the time, this includes your exams, cleaning, and x-rays. For example, let’s say your annual max is $1,000. In January, you get a cleaning, exam and x-rays and your insurance pays $300 for those. Your dentist says you need 3 fillings, so you schedule those for February. Your insurance pays $700 for the three fillings. Now your insurance has paid out the annual max of $1,000. You no longer have any insurance money left for the rest of the year–even for another cleaning and exam. That is what is meant by annual max. Annual maximums are typically between $750 and $2,000.
Deductibles: The deductible is what the patient pays before receiving treatment. It is usually waived on diagnostic and preventive services such as cleanings, exams, and x-rays, and is normally between $25 and $100. It is paid by the patient one time per plan year.
Percentage Coverages: Each insurance plan specifies what percentage they cover for certain procedures. For example, an exam and cleaning may be covered at 100%, fillings are covered at 80% and crowns and bridges are covered at 50%. This means that if a filling is $300, and your insurance covers 80%, you will be responsible for 20%. This is important when shopping around for insurance. If you know that you have gum issues, for example, you will want to look at which periodontal services are covered, and at what percentage. This includes periodontal maintenance (cleanings for patients with gum issues), deep cleanings, and periodontal surgeries such as tissue grafts. If you know that you are prone to cavities, you may prefer a plan that pays for fillings at 100% or 90% rather than 80%.
Frequencies: This is the amount of times a certain procedure is allowed in a certain time frame. For example, some insurances allow 2 cleanings per calendar year, while others allow 1 cleaning every 6 months. You still get two cleanings each year, but they have to scheduled appropriately. Other frequency limitations are usually placed on exams, x-rays and Panoramic images. You may also see frequency limitations on procedures like debridements (a cleaning that removes heavy tartar from teeth), fillings, and crowns.
With all that in mind, let’s break down the different categories:
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.