Prepaid or HMO Dental Plans
Prepaid dental plans have been around since the mid 1970s. These plans were designed for group coverage. With this type of dental plan, the dentist receives a portion of your monthly premium. This is called capitation. It is intended to prepay a large portion of the cost of various services, such as routine cleanings, examinations, x-rays, fillings, fluoride and extractions. Fees for other dental services are greatly reduced and paid by the patient at the time of service. When a dentist decides to participate in these plans, he/she agrees to accept the capitation as payment for the free services and the reduced fees for other dental services. Because there is a capitation paid for each member, the monthly cost of these types of plans are about the same as a PPO. Since the dentist gets paid for you being on their roster, changing dentists can sometimes take awhile.
Past experience has shown that the dentists are not able to cover overhead, let alone make a profit, when providing the free services. Many dentists make appointments available in direct proportion to the amount of capitation they receive (i.e., one patient is seen for each $100 of capitation received per month). In many cases the fees that these plans allow for some procedures are so low that it is not financially feasible for the dentist to render the service. When this happens, the primary dentist may refer the patient to a specialist, (this is known as “Patient Passing”). By passing the patient off, the primary dentist does not have to provide the service (but still gets the capitation), and since the specialist does not receive a capitation, the patient only receives a 15 to 25% discount.
The reduced fees allowed by dental HMO’s have participating dentists doing many dental treatments at a financial loss. 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. For these reasons many dentists are limiting appointments in proportion to the amount of monthly capitation (i.e., one patient per month for each $100 of capitation). Still a greater number of dentists are eliminating these plans from their practices altogether.
With PPO insurance plans, the insurance 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.
Most PPO plans cover preventive care, cleanings, check-ups, protective dental sealants, x-rays and fluoride treatment at 80 to 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%. Although it is not considered indemnity insurance, you still may encounter waiting periods and the premiums are only slightly lower.