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What’s the Difference Between PPO and DHMO Dental Insurance Plans?

Modern insurance is a complicated industry. Heavily regulated and very expensive, the insurance market is hard to navigate for the unwary consumer. This is doubly the case for dental insurance, because employers are less likely to offer plans. If you are trying to find a plan that works for you, take a look at this guide to two of the most common kinds of dental plans.

Definitions

Let’s start off by defining the two terms being used. A DHMO is a Dental Health Maintenance Organization, similar to the HMO plans offered by many insurers for non-dental health issues. A HMO operates by stringing together a network of medical professionals, dentists in this case, who offer discounted rates to users within the network of those covered by the plan. A PPO, however, is a Preferred Provider Organization. In a PPO, there is still a network of providers that accept the plan, but the PPO has a broader scope and is more likely to offer reimbursement for out-of-network care.

Costs

As already implied above, there are two main differences between DHMOs and PPOs. The first difference is price. Dentists grouped under a DHMO have agreed to offer many services for a very low or nonexistent cost to the people covered by the plan, so DHMOs offer extremely low-cost services, provided the user is in the network. A PPO’s dentists have also agreed to cut rates for those in the plan’s coverage, but not as much as with a DHMO. Your average cost per visit is higher under a PPO, though this will vary greatly by service and deductible amount.

Network Size

The other major difference is the number of providers participating in these types of plans. DHMOs are much smaller, restricting your choices when it is time to pick a dentist. If the plan’s participants are not convenient to where you live or are not ideal to meet your needs, this is very unfortunate. A PPO plan includes far more providers, because the insurer has to pay out less to the participants. The larger PPO network gives you latitude to pick a dentist that is best for you. PPOs are also generally more lenient as far as covering out-of-network dentists.

Which is Right for You?

Each type of plan is good for a certain type of consumer. Someone who is more settled down and planning to make a household in a particular area might consider choosing a DHMO plan. The smaller set of alternatives is not a huge problem for those not wanting to move around or try other possibilities. City size plays a role here as well, as a smaller town may lack many other dental options anyway. PPOs are better for people planning to move around, or for people in larger cities that want to explore several dentists’ offices before choosing one to stay with.

Ultimately, the question of which plan is best needs answering by the best authority on your life — you. Both DHMOs and PPOs have their merits, and only by considering what you need will you make the best decision.

Brought to you by The Guardian Life Insurance Company of America (Guardian), New York, NY. Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, investment or medical advice. #2016-16227 (exp. 1/18)

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