Understanding the different types of dental insurance can help your team better understand the claim process. Learn about the 6 most common plans and how they work.
Consumers’ top concern when considering dental coverage is cost. In an attempt to address this concern, there are four fundamental types of dental benefits products that have significant market shares today: dental Preferred Provider Organizations (PPOs), Dental Health Maintenance Organizations (DHMOs), discount dental plans, and managed fee-for-service plans.
1. Preferred Provider Organization (PPO)
Preferred provider organizations (PPOs) are networks of healthcare providers under contract with an insurance company to provide care at a discounted rate for plan participants. Unlike Health Maintenance Organization (HMO) plans, PPOs do not require a primary care physician or referrals for specialists, although it is generally recommended that patients visit in-network providers. Out-of-network coverage may be available, depending on the plan, but it will typically come at a higher cost through co-payments or an annual deductible.
With this flexibility, PPOs make it easier for plan participants to get the care they need. However, PPOs typically have higher premiums than HMO plans and also have a deductible that subscribers must meet before the insurance company begins to pay for claims. This can add up over time, making it important to consider costs when deciding whether or not a PPO plan is right for you.
2. Health Maintenance Organization (HMO)
HMOs are one type of managed care plan and usually have smaller networks than PPOs. They also require participants to select a primary care physician (PCP) who acts as the gatekeeper to direct access to medical services. Except in emergencies, the PCP must give a referral before an insured person can see a specialist. HMOs are budget-friendly and provide low copayments or deductibles. They manage costs through “utilization review” and may cap specialists who charge on a fee-for-service basis, meaning that the specialist is reimbursed for every service they perform.
Some Medicare Advantage HMO plans allow enrollees to choose providers outside of the network, although this will often result in higher out-of-pocket costs than if they had chosen an in-network provider. Other HMOs offer a point-of-service (POS) product that gives policyholders the choice of using an in- or out-of-network dentist and allows them to file claims as they would with a traditional indemnity plan.
3. Discount or Referral Plans
Dental discount plans offer patients access to discounted rates for certain procedures. These plans typically require a yearly membership fee. Practices that accept these plans can gain new clients and reduce the amount of insurance claims they receive.
Regardless of the type of plan you choose, it’s important to carefully consider premiums and out-of-pocket costs before making a decision. In addition to the plan’s monthly cost, you should look at deductibles, annual coverage maximums, and any other limitations on specific services or procedures.
Also consider if you want to see a dentist who is in the plan’s network and whether your preferred providers are participating with that particular plan. Choosing in-network providers will help you keep your out-of-pocket costs low. However, this doesn’t mean that you can’t see an out-of-network provider if you have the right coverage. Just be sure to discuss this with the dentist.
4. Exclusive Provider Organization (EPO)
The exclusive provider organization (EPO) is another type of managed care plan in the HMO/PPO family. Like HMOs, EPOs have networks of doctors, hospitals and other healthcare providers they contract with. Just as with PPO plans, these healthcare providers agree to charge less for the patients covered by the EPO, and that savings can be passed along to policyholders in the form of lower premiums and costs. EPOs also offer more flexibility than HMOs in that they typically do not require a referral from the PCP to see a specialist, though out-of-network care will be limited except in emergencies.
Similarly to an EPO, POS (Point of Service) plans provide in-network care with no requirement for referrals and allow direct access to specialists. However, they are typically limited to a geographic region and do not cover out-of-network healthcare except in emergencies. Because of this, POS plans may have higher annual deductibles than an EPO.
5. Indemnity Plans
Understanding the different types of dental insurance can help your team submit more successful claims and avoid denials. Having an extensive knowledge of the common types of dental insurance plans will allow you to make a more informed decision when it comes time to select an individual or group plan for your practice.
Like health insurance PPOs, dental Preferred Provider Organization (PPO) plans have networks of dentists who are contracted with the insurance company to provide services at a discounted rate. You have the option of choosing a dentist outside of the network, but you will likely pay more for the visit / treatment.
Dental Health Maintenance Organization (DHMO) plans, on the other hand, are similar to health insurance HMOs and have a network of dentists that you must use to receive coverage. Unlike HMOs, most DHMO plans do not have annual maximums, so you can go to the dentist as many times as needed without worrying about running out of benefits.
6. Dual Coverage
Many dental insurance plans use a system called coinsurance to help cover costs after the dental plan deductible is met. This means the insurance company will pay a certain percentage of the cost for a treatment, and the enrollee will be responsible for the rest. This is typically shown as a percentage in the plan details, such as “80%/20%.”
Many types of dental plans set an annual maximum – this is the amount that the plan will pay for treatments or procedures over the course of a year. Some plans may roll over a portion of unused annual maximums into the following year.
Full coverage dental insurance plans cover a variety of treatment and procedures, including preventive care, basic and major restorative care, and in some cases orthodontic care. These plans typically have higher monthly premiums than other dental plans, but can offer significant savings on the costs of out-of-pocket expenses and deductibles.
