The two most common types of dental insurance in the U.S are dental HMO and PPO plans, but what are they exactly and how do they differ?
We are comparing DHMO vs PPO insurance, looking at the advantages and disadvantages of both to help you make an informed decision.
The two most common types of dental insurance plans in the USA are HMO and PPO.
Dental HMO insurance plans aim to maximize savings and prioritize preventive oral health.
With dental HMO, you can only receive dental insurance coverage with in-network practices, where dentists are paid fixed rates.
Dental PPO plans allow for more freedom of choice in the dentists you can visit, much like dental indemnity insurance.
A PPO will have higher premiums, a deductible and an annual maximum.
A Dental Health Maintenance Organization (DHMO, or dental HMO) is a type of dental insurance that prioritizes preventive care. DHMO is generally the cheapest form of dental insurance as a result. Furthermore, most insurance providers do not deny coverage if you already have missing teeth or have a pre-existing condition.
In HMO dental insurance, dentists sign a contract to provide covered services at a set price, so the insurance company and members can enjoy the most savings possible. Dental providers are paid a set amount of money per month for each patient, and receive another, smaller than usual payment for each service. This creates the incentive for preventive care.
There is unfortunately a risk that this structure can lead to lower-quality care, as dentists earn less. Patients on HMO plans are sometimes seen as “time slot fillers,” which may be a bad sign of your dentist’s ethics or their demand.
A DHMO pays dental providers per patient and an additional amount for each service. This results in significant savings for members but may be undesirable for dentists.
A dental HMO is right for you if you are on a budget, your needs are centered around basic and preventive dental care, and you are confident that your primary dentist will remain in the network.
The main benefit of a DHMO plan is the cheaper price. As dentists must agree to a certain rate for each treatment, lower costs are passed down to the member. These reduced costs include no annual deductible or annual maximum for services covered. Additionally, you can expect lower copayments.
HMO dental plans offered by the Affordable Care Act marketplace are also more affordable than PPO insurance plans, including for children [1].
The biggest issue with dental HMOs is that you are limited to in-network dentists. There is no coverage for an out-of-network practice. If your dentist leaves the plan, you must find a new one to continue coverage. There is also a relatively small network size of dentists as a result. In fact, many dentists describe being dissatisfied with the lower payments of DHMO contracts [2].
Like other types of dental insurance, you are likely to see limits on the number and types of dental services that can receive coverage per year. For example, the number of X-rays you can claim may be limited, or you could only be covered for a certain number of fillings.
HMO dental insurance plans are great options if you want to avoid high prices for dental insurance, but you have less freedom of choice.
A dental PPO, or Preferred Provider Organization, gives preferential coverage to dentists who have signed on to be part of the network. You can still claim for out-of-network dentists, but your out-of-pocket costs will be higher.
A dental PPO insurance plan works similarly to dental indemnity insurance, otherwise known as traditional insurance. Here, you must first meet a deductible, which may not exist for basic services before your coinsurance kicks in.
Unlike a DHMO dental plan, a contracted rate is agreed upon with dentists, and this determines your coinsurance. This is capped at an annual maximum, generally between $1,000-2,000 per year.
Visiting an out-of-network dentist will generally involve a “usual, common and reasonable“ (UCR) fee, which is based on the average rate for any given dental service. If the dentist you want to see is out-of-network and charges $50 more than the UCR rate, for example, you will pay for this additional amount.
PPO dental insurance plans have a fee-for-service structure like dental indemnity insurance, but conditions apply such as higher costs for dental practices outside their networks.
Dental PPO is right for you if you prefer the freedom of choice when it comes to the dentist you see. However, costs can be higher depending on your choice of dental provider.
The main benefit of a PPO is you can see out-of-network dentists, but the degree of coverage will be less. If your practitioner still decides to leave the insurance plan network, you are still able to receive coverage, and you don’t need to notify anyone to change your dentist. You also don’t have to obtain a referral before seeing a dental specialist.
Benefit summaries are often straightforward and similar across plans. For example, you may have no coinsurance for basic services such as cleaning or examination, but still, receive 80% dental coverage for procedures including fillings and minor surgery, and be 50% covered if you need major restorative care such as implants or bridges.
The main issue with PPO dental insurance is higher premiums. PPO plans typically have a deductible you must meet, such as $50 for teeth cleaning, as well as annual limits of most dental services you claim coverage for.
PPO dental insurance involves higher premiums, deductibles and an annual maximum, but you are free to choose your own dentist at any time.
There are several differences between dental HMO and PPO plans:
Your out-of-pocket costs will generally be higher when choosing a PPO. This is because they involve a fee schedule negotiated between participating dentists and the company. A DHMO runs on a pre-paid plan structure.
DHMO plans require you to choose a primary care dentist. If you need to see a specialist, they must provide you with a referral first. When it comes to changing your primary dentist, a transfer will often start in the following month, not immediately. You also have to call your insurance provider to request the transfer, too.
The advantage of choosing a PPO plan is that you can change your dentist at any time, and do not have to call your insurance company or wait for the change to be effective.
A dental HMO will provide no coverage to members visiting dentists outside of their network. While DPPO plans cover you either way, it’s still best to prioritize in-network providers as you save more.
The cost-effectiveness of dental HMO insurance is often first seen with your copayments. Every plan has its own Schedule of Benefits, which is a document listing your covered dental procedures including your out-of-pocket expenses.
For dental PPOs, you have a fee schedule that lists negotiated fees for services. Your insurance company pays a specified portion of this fee, while you pay the rest as your coinsurance. However, visiting an out-of-network dentist will mean you are charged a higher rate.
DHMO plans don’t have any deductibles. The only out-of-pocket cost you need to consider is the copayment when you receive dental care. As for PPO dental insurance, the deductibles for each category of services vary by plan.
In DHMO plans, dental care providers file claims for you, but you can still call the customer service department of your insurance company if you have any more questions. A PPO dental insurance plan will also offer this service for in-network dentists, but sometimes you must file your own claim if you choose out-of-network providers.
An HMO dental insurance plan could be the most appealing to you if you’ve previously met your annual maximum for dental services. This type of insurance does not have annual maximums, only some exclusions or limitations. On the other hand, a PPO plan does, and you must research to compare and contrast this cost too.
If you need to start using your dental insurance right away, HMO plans come out on top. They do not have waiting periods before you are able to claim coverage on dental care, but a PPO will. This is intended to prevent members from purchasing a dental PPO insurance plan for a specific service, such as an implant or root canal, only to cancel it after treatment.
HMO dental insurance plans have lower total costs, including the absence of a deductible or annual maximum. There is also no waiting period or need to spend time filing claims. However, a PPO gives you more flexibility in choosing a dentist.
| Plan Feature | Dental HMO | Dental PPO |
| Out of pocket expenses | Copayments that vary by procedure | Set up as coinsurance; you typically pay 20-50% of a discounted rate for in-network dentists, or this portion of the full rate for out-of-network dentists. |
| Deductibles | No deductibles | Yes; varies by procedure |
| Annual maximum | No | Typically within $1,000-2,000 |
| Claim filing | Your dentist will file claims for you | You may need to file your own claims for out-of-network dentists. |
| Preventive care | 100% covered | 100% covered, generally no deductible |
| Choice of dentist | Only covered in-network | Freedom of choice, but more savings in-network |
| Primary care dentist | Yes; specialists require referral | No |
Here are the most important things to know about the two main types of dental insurance, DHMO and DPPO.
The two most common dental insurance options today are HMO and PPO dental insurance plans. An HMO insurance policy is more cost-effective, particularly when most of your oral health needs are for basic dental care such as teeth cleanings.
However, a PPO dental plan is best when you require more flexibility from your dental care, such as no need to choose a primary dentist or seek referrals from them. There is no one “best” type of dental insurance plan, but instead, there are different types to fit different needs.
