Part II of the Essentials Series looked at the differences between discount dental plans and dental insurance. This time, part III of the Essentials Series will focus on defining the various forms of dental insurance available.

Let’s face it, dental insurance can be confusing. In fact, I think one factor contributing to the low percentage of Americans with dental insurance is because they simply don’t understand their options. Maybe some of you feel the same way. After all, you’re reading this, right? I hope that this post can clear up some of the confusion that exists when it comes to dental insurance.

Despite what you may think, there are really only two major types of dental insurance: indemnity plans and managed care plans.

Indemnity Plans

Indemnity plans, also known as “fee-for-service” plans allow you the most freedom in selecting the dentist you wish. In most cases, you can see a dentist without a referral. With an indemnity plan, your insurance company will pay a percentage of each of the services rendered. You are responsible for the percentage of the services rendered that the insurance company does not cover. The downsides to an indemnity plan is that they will often incur more costs and require you to fill out more paperwork.

Managed Care Plans

Managed Care Plans are comprised of PPO’s, DHMO’s, and POS’s.

1. Dental Preferred Provider Organization (PPO) Insurance Plans
A Dental PPO is a group of dental care providers who have teamed up with an insurer or third-party administrator to provide dental care at reduced rates to members. With a PPO, you have much less freedom to choose the dentist you wish to see. In fact, you will be charged significantly more to see a provider that is outside of the PPO network.

2. Dental Health Maintenance Organization (DHMO) Insurance Plans
Unlike indemnity insurance, DHMO’s only cover services rendered by designated dental professionals that have agreed to treat patients in accordance with the HMO’s regulations and policies. You have little freedom with a DHMO to choose the dentist of your choice. In fact, you are required to select a primary care dentist to manage your care.

3.Dental Point of Service (POS) Insurance Plans
Dental Point-of-Service Plans allow you the freedom to select a dentist who belongs to an insurance plan network, or one that does not belong to a network. However, as with DHMO plans, you will have a primary care dentist. But, unlike DHMO plans, you are not bound to your primary care physician. If you are unhappy with your current primary care dentist, you can switch to another one twice a year. You also have the option of visiting out-of-network dentists, but will pay more for doing so.

This is a simplified guide to the different types of dental insurance. By no means is this comprehensive, but I’m hoping that I highlighted the distinctions that exist between the different types of dental insurance.

In Part IV of the Essentials Series, I will explore the 8 questions you should ask any discount dental plan or dental insurance plan provider prior to making a buying decision.

Cory Kemp is the founder and chief editor of He's committed to providing consumers with helpful tips for saving money at the dentist. Follow me on Google +