A Preferred Provider Organization (PPO) plan offers flexibility and lower rates. It doesn’t have a closed network like an HMO plan, and you can choose your dentist without a referral. These plans use UCR or Table of Allowance fee schedules to determine a list of covered services and their allowed costs. Dental professionals then bill patients for treatment at discounted rates.
If you want your dental insurance to start paying for services, you must first meet the plan deductible. Depending on the plan type, this can be a per-person or family deductible. Once the deductible is met, your insurance will begin to pay a percentage of costs for non-preventive procedures up to an annual maximum. A PPO plan offers patients an extensive network of dentists contracted with the insurance company to provide services at a reduced fee. This allows the insurance company to lower premiums while offering low out-of-pocket patient costs. Dental PPO plans offer more flexibility in the choice of dentists, but they can be more expensive since they typically have a deductible and coinsurance. Some plans allow unused portions of your annual maximum to carry over into the following year, reducing the need for an annual maximum.
Dental PPOs combine the advantages of more extensive networks and dentist choice with lower rates to overcome consumer concerns about cost. They generally require a deductible that consumers must meet before dental costs are covered fully or partially, and they typically impose copayments that patients must pay at the time of service. These costs can vary depending on the plan. The negotiated fees that a dental insurance company pays to its network of dentists can significantly reduce patients’ out-of-pocket expenses with a PPO plan. This is because insurers have to compete for employers’ business by offering competitive plans at affordable prices, which has pushed in-network fees downward.
Another way that dental insurance companies control costs is by using a schedule or table of allowances. This system assigns a dollar amount to each treatment based on what the insurance company thinks it should cost to provide that treatment. This allows the insurance company to track costs and negotiate discounts with providers to minimize the treatment fees. While this approach can be a good solution for some dental services, it is only an option for some treatments. For example, some patients prefer to have their dentist choose the type of crown they need or the filling material used in a procedure. In these situations, a DHMO or capitation plan may be more appropriate. These programs pay contracted dentists a fixed fee monthly or per patient. In exchange, they agree to provide specific types of treatment for the benefit of the patients enrolled in that plan.
Insurance terms can be confusing, especially regarding deductibles and coinsurance. However, these are important to understand since they significantly impact costs and can lead to surprises. Coinsurance is insurance that shares costs with you and your plan. It’s usually shown as a percentage and can be found on your dental plan summary. The percentages can vary by service category. For example, fillings may cost your plan 80%, and you pay 20%. This means you would have to meet your deductible and pay 20% of the total cost of the procedure before your dental plan begins covering costs. Dental plans can be structured to have several different deductibles, copayments, and annual limits. Some are fixed, and others are calculated based on your usage. For example, a preventive services plan will have a lower deductible and maximum than a restorative one. Some dental insurance types require you to visit only in-network providers. Others are more flexible and offer you the option of choosing your provider. The most flexible of these are called indemnity plans, and they typically have a high monthly premium but also allow you to see any dentist you want. Indemnity plans are usually only offered by large employers who want to retain control over their dental plan costs and are willing to take on the financial risk of claims costs exceeding projections.
Most PPO plans have a maximum benefit that caps how much the plan will pay for certain services over a year. Consumers are responsible for any costs over the annual maximum limit. Most dental insurance plans have maximums of around $1,500 per year, and some have limits of up to $5,000. Most plans have a network of dentists contracted with the insurance company and offer reduced rates. This key feature helps consumers save the most on their dental care. The negotiated fees are typically below the dentist’s customary and reasonable fee (UCR). Consumers can visit any licensed dentist they choose. However, out-of-network dentists will not be reimbursed by the insurance provider. Many dental insurance plans also have restrictions that dictate how often patients can visit the dentist to get the best coverage. For example, some plans may only cover two cleanings every 12 months or one panoramic x-ray once every three years. Other restrictions include frequency limitations for specific procedures like fillings and root canals. These limitations can significantly impact your dental costs. Some other forms of dental insurance include Dental HMOs and Dental Discount Plans (DHMOs). Unlike PPO plans, these products require that you select from a panel of dentists who are part of their network to receive discounted services. DHMOs also have lower maximums and deductibles than PPO plans.