A Dental Insurance Primer for Real People (Part 1)
At 1st Family Dental, we believe surprises can be fun and exciting, but not when it comes to your dental insurance. We believe all of our patients have a right to understand the fundamentals of purchasing and utilizing the different types of insurance coverage.
We have a developed a multi-section, basic guide that can help you understand your current policy or shop for new one, and to help you understand what you should be able to expect from your insurance provider, dental plan, and dental care provider. Please consider this guide as a helpful, objective tool. This guide does not cover every aspect of dental insurance plans, so please be sure to review your plan carefully. We do not endorse or recommend any specific plan or product.
Part 1 of this series reviews the most common types of insurance plans available.
Understanding Basic Types of Plans – HMO, PPO, Medicaid/Managed Care, & Discount Plans
HMO (Health Maintenance Organizations)
HMOs are a type of managed care, which means patients are only covered if they visit a dentist or specialist within the approved network of providers for that plan. Patients also need to list their provider with the insurance carrier either when signing up for the plan, or before the first dental appointment. Patients may have co-pays for office visits. Referrals are required from the primary dentist if specialty treatment is needed. Typically, HMO plans have a set fee schedule, which means the plan will cover a certain dollar amount towards procedures (rather than a percentage). Patients are then responsible for the difference between the amount covered and the actual cost of the procedure.
Pros: HMO plans usually have a lower monthly premium compared to PPO plans. HMO plans are typically straightforward and have fewer conditions or “fine print” when it comes to coverage.
Cons: HMO coverage amounts are limited, and not all dentists accept HMO plans, which means the selection of dentists is usually smaller. If you are traveling outside of the network, coverage may not be available. Out of pocket expenses for general procedures such as fillings may ultimately be greater than PPO plans, so the actual potential cost to a patient may be higher over the course of the term of the plan, depending on what treatment is needed.
PPO (Preferred Provider Organization)
PPO plans typically offer more flexibility when it comes to choosing a dental care provider. Patients can usually see any general dentist or specialist within the plan’s network, or even outside of the network if needed. However, referrals or pre-authorizations may be required for certain procedures. PPO plans usually cover procedures and services at a percentage rate. There may also be a deductible that must be met before coverage begins. Typically the deductible does not apply to preventive services such as checkups and regular cleanings. If services are not covered at 100% once the deductible has been met, patients are then responsible for the difference between the coverage and the actual cost of the procedure. PPO plans also have annual coverage maximums, meaning that coverage is in effect until the patient has met the coverage amount for the term of the policy. Once that coverage limit has been met, patients are responsible for all remaining fees until the end of the term of the policy, which is usually one year.
Pros: PPO plans usually offer more choice of providers because more dentists and practices accept PPO plans. Total out of pocket costs for a policy period may be lower than with an HMO plan for patients who need general or specialty treatment. Some PPO plans also offer coverage for specialty services, including braces and orthodontics and dental implants, which can offer more options for long-term solutions for oral health.
Cons: Monthly and annual premiums for PPO plans are often higher than for HMO plans and can often involve a deductible, so short-term cost is usually higher. Although many PPO plans cover a wider range of services, plans can be more complicated when it comes to requirements for pre-authorizations. Most plans have a use-it-or-lose-it policy, meaning that if patients do not use all of their available insurance benefits during the policy term, those benefits are gone.
With each type of insurance plan, insurance carriers reserve the right to change coverage levels at any time. There is always a risk that the policy will not cover a service or procedure.
Medicaid & Managed Care Plans
Although dental insurance is not yet mandatory via the Affordable Care Act (ACA), Illinois recently expanded eligibility requirements for Medicaid and is reorganizing the administration of the program, which includes dental benefits for adults and children. Individuals must prove financial need in order to be considered eligible for Medicaid benefits. In the coming months, recipients of Medicaid benefits in Illinois will be choosing from a menu of managed care plans with a network of approved providers, similar to how an HMO is organized. It is very important to note that like any managed care service, Medicaid dental coverage contains restrictions and limitations. We will provide more detailed information on these changes soon.
Dental Discount Plans
It is important to note that discount plans are not a form of dental insurance. We have included information here because discount plans are becoming more popular. Discount plans usually charge a monthly or annual membership fee. Patients can choose from a list of dental providers that accept the discount plan. The discount plan usually pays a certain dollar amount towards each procedure, and the patient is responsible for the difference between the amount paid via the discount plan and the actual cost of the procedure.
In the next installment of this series, we will review some of the most important elements of dental insurance plans, and questions to ask of your insurance carrier to help you understand the plan you currently have, or to shop for insurance with coverage that meets your dental health needs and goals.
As always, we welcome comments, questions and suggestions. Please feel free to leave a comment below, or send us an note at firstname.lastname@example.org.