DHMO vs. PPO Dental Insurance: What's the Difference?

When shopping for dental insurance, two plan types come up more than any other: DHMO and PPO. These are the most common structures for dental coverage in the United States, and they work quite differently from each other. Understanding those differences can help you choose the plan that best fits your dental needs, your budget, and how you prefer to access care.

PPO plans hold roughly 70% to 80% of the dental insurance market, making them the dominant plan type. But DHMO plans remain popular in certain regions and can be a smart choice for people who want lower out-of-pocket costs and do not mind a more structured care experience. This article breaks down how each plan type works, compares them side by side, and covers other plan types you may encounter.

How DHMO Dental Plans Work

A DHMO, or Dental Health Maintenance Organization, is a managed-care dental plan. When you enroll, you choose a primary care dentist from the plan's network. That dentist handles all of your routine care and coordinates any referrals you may need for specialists like oral surgeons or endodontists.

Here are the key features of a DHMO plan:

• Assigned dentist: You select a primary care dentist from a network. All care goes through that provider. Changing your assigned dentist usually requires contacting the plan and may take effect at the start of the next month.
• No annual maximum: Unlike PPO plans, most DHMO plans do not have an annual maximum. This means there is no cap on what the plan will pay in a given year, which can be helpful if you need extensive dental work.
• Low or no deductible: Most DHMO plans either have no deductible or a very small one. You start receiving covered benefits without having to meet a dollar threshold first.
• Copay-based cost sharing: Instead of paying a percentage of the cost (coinsurance), you pay a fixed dollar amount (copay) for each service. The plan publishes a schedule of copays so you know the exact cost before your visit.
• Lower premiums: DHMO premiums typically range from $15 to $30 per month, making them the most affordable type of dental insurance in terms of monthly cost.
• Referrals required: To see a dental specialist, you need a referral from your primary care dentist. This adds a step to the process but helps the plan manage costs.

The biggest trade-off with a DHMO is limited provider choice. You must use dentists within the plan's network, and that network is often smaller than what a PPO offers. Out-of-network care is typically not covered at all, except in emergencies.

How PPO Dental Plans Work

A PPO, or Preferred Provider Organization, is the most common type of dental insurance plan in the United States. PPO plans give you more freedom to choose your own dentist and see specialists without needing a referral. You can visit any licensed dentist, but you pay less when you use a provider who is in the plan's network.

Here are the key features of a PPO dental plan:

• Network flexibility: You can see any dentist, in-network or out-of-network. In-network providers have agreed to discounted rates with the plan, so your costs are lower when you stay in-network. Out-of-network care is still covered but at a reduced benefit level.
• No referrals needed: You can go directly to a specialist, such as an oral surgeon or periodontist, without first getting a referral from a general dentist.
• Annual maximum: Most PPO plans have an annual maximum benefit, typically between $1,000 and $2,000. This is the most the plan will pay in a year. Any costs beyond that are your responsibility.
• Deductible and coinsurance: PPO plans usually have an annual deductible, typically $50 to $100. After you meet the deductible, the plan pays a percentage of each service. A common structure is 100% for preventive care, 80% for basic services, and 50% for major services. You pay the remaining coinsurance.
• Higher premiums: PPO plans generally cost more per month than DHMO plans. Monthly premiums typically range from $30 to $60, depending on the plan's coverage level and your location.

The main advantage of a PPO plan is flexibility. You are not locked into a single dentist, and you can see specialists on your own without a gatekeeper. The main disadvantage is the higher cost, both in premiums and in the annual maximum that caps what the plan will pay.

Side-by-Side Comparison: DHMO vs. PPO

The following comparison highlights the main differences between DHMO and PPO dental plans across the factors that matter most when choosing a plan.

• Monthly premiums: DHMO plans cost about $15 to $30 per month. PPO plans cost about $30 to $60 per month.
• Deductible: DHMO plans typically have no deductible. PPO plans usually have an annual deductible of $50 to $100.
• Annual maximum: DHMO plans generally have no annual maximum. PPO plans typically cap benefits at $1,000 to $2,000 per year.
• Cost sharing: DHMO plans use fixed copays for each service. PPO plans use coinsurance, meaning the plan pays a percentage and you pay the rest.
• Provider choice: DHMO plans require you to use in-network dentists only. PPO plans let you see any dentist, with lower costs in-network.
• Referrals: DHMO plans require referrals for specialists. PPO plans do not require referrals.
• Market share: PPO plans account for 70% to 80% of the dental insurance market. DHMO plans are less common and may not be available in all areas.

Cost Differences Between DHMO and PPO Plans

The cost difference between DHMO and PPO plans goes beyond the monthly premium. To get an accurate picture, you need to look at total annual costs, including premiums, deductibles, copays or coinsurance, and any costs that exceed the annual maximum.

For someone who only needs preventive care such as two cleanings, two exams, and an annual set of X-rays, a DHMO plan is usually the cheaper option. You pay the low monthly premium, and preventive services often have no copay at all. With a PPO, the preventive care may also be covered at 100% in-network, but your higher monthly premium means you are paying more over the year.

The calculation shifts when you need major dental work. If you need a crown, root canal, or other expensive procedure, the PPO plan's annual maximum becomes the limiting factor. A crown can cost $800 to $1,500, and a PPO plan with a $1,500 annual maximum may cover only 50% of a major procedure after you have met your deductible. With a DHMO, you pay the scheduled copay for the procedure, and there is no annual cap. In some cases, the DHMO copay for a crown might be $200 to $400, making it the better deal for major work.

However, PPO plans give you more control over where you receive care. If you have a trusted dentist who is not in the DHMO network, switching to a new provider may not be worth the savings. According to the Bureau of Labor Statistics, dental costs have been rising about 3% per year, making it even more important to choose a plan structure that keeps your long-term costs manageable.

When a DHMO Plan Is the Better Choice

A DHMO plan may be the right fit if several of the following apply to your situation:

• You want the lowest possible monthly premium and are comfortable with a smaller network of dentists.
• You prefer knowing exactly what you will pay for each procedure through a fixed copay schedule, rather than dealing with coinsurance percentages.
• You expect to need major dental work such as crowns, root canals, or extensive restorations and want to avoid hitting an annual maximum.
• You do not have a strong preference for a specific dentist, or your preferred dentist happens to be in the DHMO network.
• You live in an area where DHMO plans have a good selection of network dentists. DHMO availability varies by region and is more common in larger metropolitan areas.

When a PPO Plan Is the Better Choice

A PPO plan may be the right fit if any of the following apply:

• You want the freedom to see any dentist, including specialists, without needing a referral.
• You have a dentist you trust and want to keep seeing, even if that dentist is not in a specific network.
• You primarily need preventive care and occasional basic services, so the annual maximum is unlikely to be a problem.
• You travel frequently or split time between two locations, making a broader network or out-of-network coverage valuable.
• You live in a rural area where DHMO plans may not have enough network dentists nearby.

Other Dental Plan Types: EPO and Indemnity

While DHMO and PPO plans are the most common, you may also encounter two other types of dental plans when shopping for coverage.

Exclusive Provider Organization (EPO)

An EPO dental plan blends elements of both DHMO and PPO plans. Like a DHMO, you must stay within the plan's network for coverage. Out-of-network care is not covered except in emergencies. Like a PPO, you usually do not need a referral to see a specialist. EPO premiums tend to fall between DHMO and PPO pricing. These plans are less widely available but may be an option in some markets.

Dental Indemnity (Fee-for-Service) Plans

A dental indemnity plan, also known as a fee-for-service plan, gives you the most freedom of any dental plan type. You can visit any licensed dentist without worrying about networks. The plan reimburses a set percentage of each procedure based on its fee schedule. You are responsible for the remaining balance plus any difference between the dentist's charge and the plan's fee schedule.

Indemnity plans typically have higher premiums than either DHMO or PPO plans. They also have annual deductibles and annual maximums. These plans appeal to people who want complete provider freedom and are willing to pay more for it. However, they represent a small share of the dental insurance market.

Choosing the Right Dental Plan for Your Situation

The right dental plan depends on your individual circumstances. Start by thinking about how you use dental care and what matters most to you. For more help narrowing down your options, read our guide to the best dental insurance plans for seniors.

Here are the key questions to ask yourself when comparing DHMO and PPO dental plans:

1. How important is provider choice? If you have a dentist you want to keep, verify that they are in the plan's network before enrolling. With a PPO, you can still see them out-of-network at a higher cost. With a DHMO, out-of-network care is generally not covered.
2. What dental work do you expect to need? If you only need cleanings and checkups, both plan types can work. If you anticipate major work, a DHMO's lack of an annual maximum could save you money.
3. What is your budget? DHMO premiums are roughly half the cost of PPO premiums. If budget is your top concern, a DHMO may be the more affordable path.
4. Do you need specialist access? If you see specialists regularly, a PPO's direct access may be more convenient than the referral process required by a DHMO.
5. Is a DHMO available in your area? DHMO plans are not available everywhere. They are more common in urban and suburban areas. If none are available where you live, a PPO or indemnity plan will be your main options.

The Bottom Line

DHMO and PPO dental plans serve different needs. DHMO plans offer lower premiums, no annual maximum, and predictable copays, but limit your choice of dentists and require referrals for specialists. PPO plans cost more but give you the freedom to see any dentist and go directly to specialists. Most people choose PPO plans, which hold 70% to 80% of the dental market, but DHMO plans are a solid choice for budget-conscious individuals who are comfortable with a structured network.

There is no universally better option. The best plan is the one that matches your dental health needs, your budget, and your preferences for how you access care. Take the time to compare the specific plans available in your area, and pay attention to networks, copay or coinsurance schedules, waiting periods, and annual maximums before making your decision.

Plans and coverage vary by location. This article is for educational purposes and does not constitute individual advice. Contact a licensed insurance agent to explore the specific plans available to you.