Is there a difference between HMO and DHMO?

Health maintenance organizations (HMOs) and dental health maintenance organizations (DHMOs) are two common types of managed care plans that provide health and dental coverage, respectively. While they share some similarities in how they operate, there are some key differences between HMO and DHMO plans.

What is an HMO?

A health maintenance organization, or HMO, is a type of health insurance plan that provides comprehensive health coverage to its members. Here are some key things to know about HMOs:

• Network of providers: HMOs contract with a network of doctors, hospitals, and other healthcare providers. Members must use in-network providers to receive coverage, except in emergencies.

• Primary care physician: Members are typically assigned or must select a primary care physician (PCP) to coordinate their care and refer them to specialists when needed.

• Preventive care: HMOs emphasize preventive care and cover routine checkups, screenings, and immunizations in full.

• Preapproval for services: Certain services like specialist visits, procedures, and hospital stays may require preapproval from the HMO before being covered.

• Copays: Members pay a copay, which is a fixed dollar amount, for office visits and services. Copays are usually lower than coinsurance.

• No deductible: Most HMOs do not have a deductible, so coverage starts right away.

• Annual out-of-pocket maximum: Once members hit their maximum for the year, the plan covers 100% of costs.

HMOs aim to reduce unnecessary healthcare utilization and costs by coordinating care through the PCP and requiring referrals to see specialists. Monthly premiums are usually lower for HMO plans compared to other plan types.

What is a DHMO?

A dental health maintenance organization, or DHMO, is a type of managed dental care plan. DHMOs operate similarly to medical HMOs:

• Network of dentists: DHMOs contract with dental offices and specialists to form a network. Members must visit in-network dentists to receive coverage.

• Primary dental office: Members select or are assigned a primary dental facility and dentist to provide and coordinate their care.

• Preventive dental care: DHMOs emphasize regular preventive dental care like cleanings, exams, and x-rays, which are covered at low or no cost.

• Copays for services: Members pay defined copays for basic and major dental procedures based on a copay schedule.

• No deductible: Most DHMO plans do not have a deductible.

• No annual maximum: There is typically no limit on covered services.

• Referrals for specialists: The primary dentist provides referrals to see specialists like orthodontists.

DHMOs aim to incentivize preventive dental visits and reduce costs through the use of copays and in-network dentists. Monthly premiums are usually very low compared to other dental insurance plans.

Key Differences Between HMO and DHMO

While HMOs and DHMOs have some similarities in their structure and goals, there are some notable differences between medical HMOs and dental HMOs:

• Type of coverage: HMOs provide comprehensive health insurance, while DHMOs provide dental insurance only. An HMO covers medical services like doctor visits, hospital stays, lab tests, and prescriptions. A DHMO covers preventive dental care and treatments like cleanings, fillings, crowns, and orthodontics.

• Provider networks: HMOs maintain broad networks of medical providers while DHMO networks are comprised of general dentists and dental specialists. The DHMO network is typically much smaller than an HMO’s network.

• Referrals: HMO members may need referrals from their PCP to see most specialists, while DHMO members only need referrals from their primary dentist to see dental specialists.

• Copays vs. coinsurance: HMOs often use copays for services, where members pay a set fee. DHMOs also use defined copays per procedure. PPO dental plans more commonly use coinsurance, a percentage of costs.

• Claims: Providers in an HMO or DHMO network submit claims on the member’s behalf. Members do not need to file claims when they visit in-network providers.

• Prescription coverage: HMO plans typically include prescription drug coverage, while DHMOs do not since they only cover dental services.

• Plan flexibility: Members have more flexibility to see providers outside the network and without referrals with HMO plans compared to DHMOs. DHMOs strictly limit coverage to the dental network.

• Availability: Medical HMOs are more widely available and offered as both group plans through employers and individual/family plans. DHMOs may not be offered in all states and are less common than other dental plan types like PPOs.

Pros and Cons of HMO vs. DHMO

HMOs and DHMOs each have their advantages and disadvantages:

HMO Pros

• Lower premiums and out-of-pocket costs
• No deductible
• Access to broader network of providers
• Coverage for prescriptions, mental health services, hospital stays

HMO Cons

• Limited provider choice unless you use out-of-network providers
• Potential wait times for referrals to specialists
• Preapproval required for some services to be covered

DHMO Pros

• Very low premiums and defined copays per service
• No deductible or annual maximum on coverage
• Emphasis on preventive dental care

DHMO Cons

• Small dental network
• No out-of-network coverage
• Potential wait times for referrals to dental specialists
• Limits on selection of dentist and changing dentists

When considering an HMO or DHMO, you’ll want to think about your budget, preference for provider choice, and dental care needs. DHMOs offer the lowest cost dental coverage while HMOs provide more comprehensive medical benefits.

HMO vs DHMO Coverage Examples

Let’s look at some coverage examples to illustrate the differences in what is covered by an HMO vs a DHMO and their associated costs.

Routine Preventive Visit

• HMO: Annual physical exam with your primary care doctor is covered in full with no copay.
• DHMO: Routine dental cleaning and exam by your primary dentist is covered with no copay.

Specialist Visit

• HMO: $30 copay to visit a specialist like a cardiologist, with referral from your PCP.
• DHMO: $20 copay to visit an orthodontist, with referral from your primary dentist.

Major Procedure

• HMO: $250 copay for an outpatient surgery at a facility in your network.
• DHMO: $75 copay for a crown placed by your in-network dentist.

Prescription Drugs

• HMO: $10 copay for a 30-day supply of a generic prescription drug.
• DHMO: Does not cover medications.

Out-of-Network Care

• HMO: You pay 40% coinsurance for seeing an out-of-network specialist without a referral.
• DHMO: Provides no coverage for seeing an out-of-network dentist. You pay the full cost.

These examples illustrate the differences in coverage and costs between medical services covered under an HMO and dental services covered by a DHMO plan.

Choosing Between HMO and DHMO Plans

When selecting an HMO or DHMO, here are some factors to consider:

• Cost: Do the monthly premiums and copays/coinsurance fit within your budget? DHMOs tend to have lower premiums but less flexibility.

• Provider choice: Do you prefer having a wider choice of providers or the ability to see out-of-network providers if needed? HMOs allow more provider choice.

• Covered services: Does the plan cover all the medical or dental services you need? HMOs cover more services.

• Current providers: Are your current doctors, dentists, and specialists in the plan’s network? DHMO networks are usually smaller.

• Health needs: Do you simply need routine dental care covered? Or do you require comprehensive medical coverage?

• Plan availability: HMOs have broader availability than DHMOs. Make sure the plan type you want is accessible in your state and through your employer or marketplace.

By understanding the key differences between HMOs and DHMOs, you can determine which type of managed care plan makes more sense for your health and dental coverage needs. Comparing the costs, provider networks, service coverage, and flexibility can help you decide if an HMO or DHMO is a better fit.

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