Dental PPO insurance plans, also known as DPPO or dental preferred provider organizations, are similar to the medical PPO insurance model. In short, PPO insurance plans are managed care organizations that have a contract with a third-party (usually an insurance carrier or self-insured employer) to provide their clients and/or employees with services at pre-negotiated reduced rates. The main difference between PPO insurance and HMO insurance is that PPOs allow consumers to choose primary (and any other) providers without strict restrictions. The reduced rates a consumer pays are lower if they choose a dentist in a dental PPO plan’s network, but consumers can elect to see a provider outside of the network and still be reimbursed (although at a higher reduced rate).
Dental PPO plans make a profit by charging insurance companies an access fee to use their network. In return for reduced rates on services for its constituents, the third-party payer usually provides the doctor or hospital a combination of capitation and the full rate for services not covered by monthly capitation.3 Different dental PPO plans may have organizational structures that differ greatly from each other, depending on state laws and other factors. Some of the major players in the dental PPO insurance marketplace include Aetna, Humana, Blue Cross Blue Shield, Kaiser Permanente, MetLife and Cigna.
Dental PPO insurance plans, or DPPO plans, are the most popular dental benefit option and their market share continues to grow. The most recent market analysis by NADP, The State of the Dental Benefits Market, 2005, shows that dental PPO insurance held 56% of the market share for dental benefits in 2005.16 Their research also indicates that “DPPO-type plans are growing in popularity.”16 “Generally, DPPO plans are replacing the traditional indemnity insurance plans because they provide employers and employees with similar flexibility as indemnity plans, but at a reduced premium and with lower out-of-pocket costs.”18
The 2005 NADP study reports that the average monthly premium for a dental PPO insurance plan is nearly $24, compared to nearly $16 for dental HMO insurance and nearly $31 for dental indemnity insurance.16 Discount dental plans can be paid annually and the most affordable plans average out to less than $6 a month per individual and less than $9 a month per family.17
The flexibility given to consumers in choosing a dental provider and/or specialist is one of the main advantages dental PPO insurance has over dental HMO insurance. The relatively high cost associated with this type of insurance is one of the main disadvantages of dental PPO insurance plans. Typically, premiums are higher for dental PPO insurance than for other types of insurance. One of the major drawbacks of PPO insurance plans is that they emphasize cutting costs, often leading to lower-quality care for its members.3 Another inherent drawback to this insurance model is that the value of the dental PPO plan is directly dependent on the availability of network providers in the consumer’s area. Additionally, the time-consuming claims process associated with dental PPO insurance is yet another drawback.
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Discount Dental Plans, Alternatives to Dental Insurance.
© 2006 DentalPlans.com