This blog is part two of a three-part series on the current state of the dental insurance industry, written by industry thought leader and Whiteboard Marketing Market Advisory Council member, Nick Sanyk of Smile Hilliard.
There are three main types of dental benefits plans. The first two are considered traditional insurance coverage: Dental Maintenance Organization (DMO) plans and Preferred Provider Organization (PPO) plan.
The first is typically lower cost for the consumer, while the second allows a patient more control over their dental care. The third type, Dental Discount Plans, are considered more of a membership benefit than paid coverage. A description of each type, as well as some positive and negative features of each, are listed below.
DMO Insurance Plans
A DMO plan requires you to been seen at a very limited network of providers. Often, your insurance company will assign you to a specific dentist, and this is the only provider at which you will have benefits. Most often, these are the larger, corporate type practices rather than smaller, family style practices that are generally more service driven.
Dentists that accept DMO insurance plans participate in what is called a “capitation plan.” They receive a small dollar amount from the insurance company for every patient that is “assigned” to them, regardless of if that patient is ever seen in their office. In return for this, they agree to do specific procedures (exams, cleanings, x-rays, fillings, etc.) free of charge. The patient has no cost, nor does the insurance company pay benefits towards these procedures.
What this means is that there are often long waits to schedule due to limits set on available appointments, as a participating DMO provider may give priority to schedule and see patients with other types of plans where they do not have to do this “free” work. Some DMO offices hope you never schedule with them, as they will receive the capitation payment from the insurance company regardless of whether you are ever seen for an appointment.
Even worse, some DMO dentists may be tempted to “over-diagnose” more significant work for which they may bill (such as root canals, crowns or other things), which is very unethical behavior. This is rare, however, there have been reported cases.
Despite these negatives, the cost of DMO insurance for the consumer is generally low because the insurance company ends up paying very little compared to other types of plans. The key word to remember with DMO insurance is AFFORDABILITY.
PPO Insurance Plans
A PPO plan generally costs a little bit more, however, it affords you much more freedom of choice in your dental care. A PPO plan covers you to visit any dentist you choose. Your insurer dictates the fee structure of the dentists in their PPO’s network, and you may receive a higher benefit when you use one of these dentists.
An insurance carrier’s PPO network is much larger than a DMO network, so your choice of in network providers will be significantly greater. You’re also covered if you see a dentist who’s not in the network, but you may have to pay more.
Often, we find the differences in coverage in network compared to out of network to be very minimal, however every plan is different. PPO plans also have annual maximums, deductibles and other limitations, such as waiting periods, frequency limits, missing tooth and replacement clauses, or other restrictions that limit your benefits and increase out of pocket costs.
Despite the slightly higher consumer cost, a PPO plan will generally offer a wider array of options to a policyholder. The key word to remember with PPO insurance is FLEXIBILTY.
Dental Discount Plan
A Dental Discount Plan is actually not dental insurance at all. When purchased, the insurance company simply gives the consumer access to their network of providers at the associated reduced rates.
However, no benefits are ever paid out by the insurance company. The patient pays the dentist directly for all treatment, with no claims to file or restrictions to monitor. These plans may be a good option for people who are satisfied with a provider in the network but do not have access to group coverage through an employer or who have an immediate dental need but significant cost constraints.
If the dentist chooses to end their contract with the insurance company, the discount will no longer apply at that office. The key word to remember with Dental Discount Plans is ACCESS.
Which Option Is Best?
The type of plan that best suits you is a personal decision and will vary from person to person. At Smile Hilliard, we are only able to accept Dental PPO plans, where you free to select any dentist of your choice.
However, as an unrestricted provider, we are not contacted with any dental insurance carrier. We believe that patients deserve the best dental care possible and, all too often, insurance contracts interfere with that goal.
Additionally, we offer our own In-House Membership Club to all patients without insurance coverage! Often, the cost of our membership club is less than what you would pay in dental insurance premiums and the benefits can be even greater that what they would offer.
For more information, or to join our membership club, click here: Smile Hilliard Membership Club.
NOTE: This blog was initially published on Smile Hilliard’s practice blog on September 28, 2021 under the title Types of Dental Benefits Plans. The author has since edited and updated all information to be current as of publication.