Dental HMO insurance plans, also known as DHMO or dental health maintenance organizations, are very similar to traditional medical HMO insurance plans. In simplest terms, an HMO insurance plan is an organization of healthcare providers that is under contract with an insurance company to provide services to enrolled individuals and families at a fixed rate. Participants must choose a primary dental care provider from a restricted list of approved providers, and must request referrals for specialists and other providers directly from that primary provider.
Typically, HMO insurance is financed by fixed fees that have been determined and paid in advance (known as capitation). The organizational structure of HMO insurance plans can vary substantially, depending on state laws and other factors. Some of the major players in the dental HMO insurance marketplace include Aetna, Kaiser Permanente, Cigna, MetLife, Humana and Blue Cross Blue Shield.
Dental HMO insurance provides comprehensive dental care services to its members in exchange for a prepaid, fixed monthly fee – differing from traditional insurance by not charging for each service given.3 The HMO agrees in advance to provide a complete set of services, regardless of how much those services are used.3 Dental HMO insurance plans, or DHMOs, encourage preventive care, typically reimbursing the member in part or in full for these services.
Dental HMO insurance is not the most popular dental benefit option and its market share is projected to continue to drop. According to a recent study by NADP, The State of the Dental Benefits Market, 2005, dental HMO insurance plans accounted for only 11% of all dental benefits in 2005.16 Furthermore, NADP “predicts a continuing decline in DHMO.”16
“DHMO products are still popular in states with large, concentrated urban populations while they are disappearing in states with small, rural populations.”18 This shift in market share can be attributed, in part, to consumer dissatisfaction with some of the disadvantages of dental HMO insurance outlined below.
The main advantage of dental HMO insurance is the relatively low cost associated with this type of insurance. Generally, premiums and co-payments are lower for HMO insurance than for other types of insurance. The State of the Dental Benefits Market, 2005 affirms that the average monthly premium for a dental HMO insurance plan is nearly $16, compared to nearly $24 for dental PPO 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
Unfortunately, this advantage in regards to cost is a double-edged sword. Providers often cut corners to minimize costs to the organization, including rushing through appointments to see as many patients as possible, only providing “bare-bones” treatment plans, and even allowing their assistants to handle routine visits and procedures. HMO insurance plans are often considered restrictive, imposing numerous rules and regulations. No reimbursement is made if a consumer uses a provider outside of the accepted network. Some of the disadvantages of dental HMO insurance include the time-consuming claims process, forcing members to choose from a limited list of primary providers, and the tedious referral process for specialists and other providers.
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