Prepaid Dental Insurance – What You Need To Know

Prepaid dental insurance plans are often referred to as DHMOs (Dental Health Maintenance Organizations). The advantages to prepaid plans include low premiums (the fee you pay to belong to a plan), deep discounts on dental care, no annual spending limit, and coverage for pre-existing conditions. 

But DMHOs may not be the right fit for everyone’s dental health needs. One major reason is that you must stay within the plan’s network of dentists for care unless it’s an emergency. This can be a problem if you live in an area where few dentists accept your DHMO insurance.  

Read on to find out more about prepaid plans’ benefits and drawbacks. 

What are the different types of dental insurance? 

Besides DHMO plans, your dental insurance options are DPPOs (Dental Preferred Provider Organizations and dental indemnity plans.  

DPPO plans do have an annual cap on coverage and tend to be slightly more expensive than DHMO plans. DPPO plans also have annual deductibles, typically $50 for an individual plan, and $150 for a family plan. Your insurance coverage begins after you have paid the deductible. DHMO plans do not have deductibles.  

The most significant advantage of a DPPO is being able to choose from a (typically) broader network of dentists. Most dentists will accept a DPPO plan, but not all accept DHMO insurance. With a DPPO plan, you can also go out of network for care, though you’ll save more by staying within the plan’s network. 

Dental indemnity insurance plans, also known as “Fee-for-service plans,” are not offered by every insurer. These plans offer a higher annual cap, low or no deductibles, and enable you to choose from a very wide variety of dentists. Premiums for these plans tend to be significantly higher than for DHMO or PPO plans. They are no longer widely offered and may only be obtainable through a group plan. 

How do pre-paid (DHMO) plans work? 

Dentists and dental practices who accept prepaid plans get paid a flat, fixed fee per assigned plan member every month. Members choose a dentist from the network, and that dentist becomes their primary provider. A few plans assign members to a specific dental practice or clinic, but you can typically switch to another in-network practice if one is available in your area. You typically need to notify the plan before switching dentists. 

Prepaid plans can keep their network of dentists very busy. It’s a good idea to ask about how many people are covered by the plan in your area and how many dentists are available to care for those patients. You may also want to ask how long will you usually need to wait between making an appointment, and being seen by the dentist?  

Do I still pay for dental care with a prepaid plan? 

Yes, the “prepaid” term refers to the dentists/practice – they get a flat fee per assigned patient, per month. You pay a fixed amount for treatments (this is your “copayment”). Many prepaid dental plans (and DHMOs) do not require a co-payment for  basic preventative and diagnostic services – if so, you won’t have to pay for your regular checkups with x-rays and professional cleanings.  

(DPPO plans typically utilize “co-insurance” rather than co-payments. With co-insurance, you pay a fixed percentage of the actual cost of care. With co-payments, you pay a flat rate. That makes your payments a bit more predictable with a DHMO plan, though in-network DPPO dentists typically abide by fixed rates set by the insurance provider).  

As with any insurance plan, it is important to review the details regarding exclusions, limitations, co-payments and deductibles very carefully before purchasing or signing up for a particular plan. 

Do pre-paid plans cover all types of dental treatment? 

Check your summary of benefits to understand what your DHMO plan includes, as well as how your plan covers treatment from specialists such as periodontists and orthodontists.  

Many prepaid plans do cover specialist care, but you will need to be referred by your primary care dentist, and you’ll need to obtain a pre-approval from your insurer before getting the treatment. (DPPO plans may also require pre-approvals for some types of treatment, so this is not unique to prepaid plans). 

If you’re considering a prepaid plan and know you’ll need specialist care, you will want to determine how many dental specialists are in-network in your area for that plan. 

What happens if I have a dental emergency? 

DHMO plans usually will cover  treatment for dental emergencies that occur outside of the plan’s “service area.” So, if you’re on vacation and you have a dental abscess, you should be covered no matter what dentist you see. Whether you’re covered if you need urgent care during a time when your primary dentist is off-duty may be a more complex issue. Check with your plan provider to understand what you should do in this sort of situation. 

What is a “pre-approval”? 

Members of prepaid plans typically need to obtain approval from their plan provider before receiving dental care above a predetermined cost. 

For example, let’s say that your prepaid plan specifies pre-authorization for any treatment exceeding $500. If your dentist advises a treatment that costs more than that amount, he or she must fill out a form detailing the prescribed treatment plan, submit it to your insurer, and wait for the plan to be reviewed and approved before you can receive the treatment. 

Do prepaid plans have a waiting period? 

Unlike DPPO plans, DHMO plans typically do not impose a waiting period. With a new-to-you DPPO plan, you’ll usually have to wait six months for basic restorative services or up to a year for major restorative services. Some DPPOs waive the waiting period if you had dental insurance prior to joining the new plan. With your prepaid DHMO plan, you’re covered for any treatment the plan covers as soon as your plan is active. 

Are there affordable options to dental insurance? 

Yes, dental savings plans can be a good alternative to both DHMO and DPPO dental insurance. Plan members report saving an average of 50%* on their dental care.   

And, unlike dental insurance, with a dental savings plan you don’t have to worry about deductibles, annual spending limits or waiting before you qualify for reduced rates. You can use your plan within 72 hours of joining to save on virtually all dental care, from checkups to root canals, crowns, bridges and dentures – many plans even include discounts on treatments like dental implants and cosmetic services that insurance rarely pays for.  

Want help choosing the dental insurance or dental savings plan that’s right for you? Give us a call at 1-833-735-0399. If you’re considering a dental savings plan, you can also use our calculator below for a quick look at how much you can save on virtually all your dental care.   

*Discount Health Program consumer and provider surveys indicate average savings of 50%. Savings may vary by provider, location, and plan.