Dental insurance works in much the same way as medical insurance. For a specific monthly rate (or "premium"), you are entitled to certain dental benefits, usually including regular checkups, cleanings, x-rays, and certain services required to promote general dental health. Some plans will provide broader coverage than others and some will require a greater financial contribution on your part when services are rendered. Some plans may also provide coverage for certain types of oral surgery, dental implants, or orthodontia.

Like health insurance plans, dental insurance plans are usually categorized as either Indemnity or managed-care plans (Dental PPO plans fit in this latter category). Put broadly, the major differences concern choice of dental care providers, out-of-pocket costs and how bills are paid. Typically, Indemnity plans offer a broader selection of dental care providers than managed-care plans. Indemnity plans pay their share of the costs for covered services only after they receive a bill (which means that you may have to pay up front and then obtain reimbursement from your insurance company).

Managed-care plans typically maintain dental provider networks. Dentists participating in a network agree to perform services for patients at pre-negotiated rates and usually will submit the claim to the dental insurance company for you. In general, you'll have less paperwork and lower out-of-pocket costs with a managed-care dental plan and a broader choice of dentists with an Indemnity plan.

Dental PPO (Preferred Provider Organization) plans are perhaps the most common type of managed care dental insurance plans. Most Dental PPO plans require you to pay a deductible. With a Dental PPO plan the patient typically obtains care through a network of dental providers who agree to serve the plan's members at reduced rates. When you use a network provider, you will typically pay a certain percentage (e.g. 20%) of the reduced rate, and the insurance company will pay the remaining percentage (e.g. 80%).

As a member of a Dental PPO plan, you may use dentists outside of the Dental PPO plan network, but you will typically only be reimbursed based on the amount that a network dentist would have accepted as payment in full. The rest of the total charges will be considered the patient's responsibility.

A Dental Indemnity plan is commonly known as a fee-for-service or traditional plan. If you select an Indemnity plan you'll likely have the freedom to visit any dentist you wish. You typically will not be required to obtain referrals; however, some plans may require you to obtain preauthorization for certain procedures. Most Dental Indemnity plans require you to pay a deductible. After you have paid your deductible, Indemnity policies typically pay a percentage of "usual, customary and reasonable (UCR) rates" for covered services. For instance, the insurance company may pay 80% and you may be required to cover the remaining 20% of the UCR.