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Digesting the alphabet soup of dental insurance


Understanding the alphabet soup of dental insurance plans can be a difficult endeavor for most people. Two common insurance acronyms include PPO and HMO. Managed care plans are often either PPO or HMO, standing for preferred provider organization and health maintenance organization.

With PPO insurance plans, the companies negotiate fee schedules with dentists in exchange for the dentist being put on a list of "preferred" providers. Employers give the list to their employees to match them up with dentists who participate with the dental plan. Dental insurance can help people pay for dental treatment, but it has its limitations. Most insurance plans have a deductible of $50 to $100, pay only a specified percentage for each type of treatment, and have a yearly maximum amount of funds available for dental care.

Most PPO plans cover preventive care, cleanings, check-ups, protective dental sealants, x-rays, and fluoride treatment at 80-100%. Basic care, including root canal therapy, extractions, and fillings are usually covered at 80%. Major care such as crowns (caps), permanent bridgework, and full and partial dentures as well as periodontal (gum) care are often covered at 50%.

Many insurance companies have a yearly maximum of a $1000. Dental insurance is not cumulative, so if you don’t use it, you lose it. It is interesting, and disappointing, to note that when dental insurance companies became common in the early 1970’s, the yearly maximum in many was the same $1000 it is today, even though the cost of delivering dental care has nearly tripled since then.

HMO’s have received a barrage of negative publicity in recent years, primarily in the medical community, for dubious "gag" clauses in the contracts, bureaucratic snafus, and the limitation of appropriate care of patients by their physician. While some HMO insurance plans may be adequate for practitioners in the medical community, they are more difficult to justify in the dental community. The main reason is that practice overhead is generally higher in the average dental practice than the average medical practice, and the financial compensation from most HMO’s is very low. 65 to 70 cents of every dollar received at the average dental office is consumed by office overhead, including staff salaries, supplies, laboratory fees, rent, etc.

The reduced fees allowed by dental HMO’s has participating dentists doing many dental treatments at a financial loss. A recent study by the American Dental Association found that the average dental HMO does not even adequately reimburse inexpensive preventive dental care. Consequently, a dental practice with a majority of patients having HMO insurance is often forced to see patients quickly- too quickly in my opinion, to develop the necessary rapport essential to the dentist- patient relationship. A dentist I know told me that when an HMO patient comes into his office for a cleaning, he does not give that patient the "free" toothbrush that he routinely gives to his other patients.

As you might have guessed, I am not a big fan of HMO’s. We do not participate with any HMO’s but are involved with some PPO’s. Dental insurance can help people pay for routine dental visits, but it has many limitations. Always discuss your insurance plan and financial obligations with either your dentist or the office manager prior to dental treatment.

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