Group hits MLR requirements for dental insurance plans as ‘bad policy’

Image of dental tools sitting atop money.

By Doug Bailey

Forcing dental insurance plans to adopt Medical Loss Ratio requirements similar to healthcare plans is “bad public policy that will not achieve intended consumer and dental community benefits.” So says the executive director of the National Association of Dental Plans.

In a blistering takedown of the issue, the NADP’s Mike Adelberg, said the Medical Loss Ratio requirements were the top item of discussion at the organization’s annual leadership conference this year as more states are grappling with the issue and are poised to implement the requirements.

The so-called MLRs have been in place in medical plans for more than a decade with passage of the Affordable Care Act. In exchange for tens of millions of new federally financed members, the plans accepted MLRs, which require health insurers to spend no more than 10%-15% on administrative costs, with the bulk of revenues explicitly dedicated to medical care. Plan members would receive premium rebates if their plan exceeded the administration expenditure requirements.

Dental plans, which are typically structured more like gift cards than traditional health insurance, were exempt from the ACA provision. But they have since been targeted by advocates and dentist associations for inclusion for MLRs, especially when it was revealed that some plans, admitted outliers, dedicated very little expenses to actual dental care and spent whopping amounts on administrative costs, including high salaries for top executives.

Then last November, Massachusetts voters by a 72% margin adopted MLRs for dental plans in the state. Supporters said it was a huge victory for consumers that would guarantee their premiums would be mostly spent on care. The American Dental Association hailed the ballot victory and said the move to bring dental plans in line with health care plans with MLRs and policyholder rebates would likely sweep the nation.

Massachusetts vote a 'mistake'

But Adelberg called the Massachusetts vote a “mistake,” that was approved without benefit of a legislative process in which professionals could consider pros and cons. He said if dental insurers are forced to cut administrative costs, member and provider call centers could be closed, and claims processing will be impacted.

“Nobody, not even dentists, benefit from diminished plan services,” he wrote in a position paper on the NADP website. He said his organization will vigorously oppose the imposition of medical loss ratios for dental plans that arbitrarily set MLR levels.

“An 80%+ MLR for dental plans is not pro-consumer,” he said. “It raises cost sharing and limits provider choice.”

Not surprisingly, the American Dental Association (ADA) fired back at the NADP’s position, saying for too long dental plans have existed without the oversight necessary to make sure most of the premiums they collect go to care.

“During the COVID years, these companies had very low medical loss ratios, even though they were still collecting premiums,” said Chad Olson, director of state government affairs at the ADA. “If an MLR had been established along with a rebate, consumers would have received their hard-earned dollars back. That would not have been a ‘mistake.’”

Olson particularly critiqued Adelberg’s hypothetical example in which he said the promise of a small rebate is outweighed by vastly higher cost sharing.

“Imagine if a dental plan that pays $1,250 for a crown now pays $1,500” in order tor raise its care costs to meet the required MLR, Adelberg said. “That consumer, who might have 50% cost sharing for this service, pays half of this cost increase -$125. And if that consumer exceeds the plan’s annual maximum because of inflated payments, then the consumer pays 100% of additional costs.”

"Our hope is that plans would make choices to meet MLRs that would benefit the patients they serve.”Chad Olson, director of state government affairs, ADA

But Olson countered that there are other options available to the dental plans besides raising the costs of dental care.

“Using his example, the dental plan could increase its cost sharing on the crown from 50% to 60%, keeping the amount the plan “pays” at $1,250,” he said. “In that scenario, the plan would now reimburse $750, and the consumer would be responsible for $500, reducing the consumer cost by $250…Our hope is that plans would make choices to meet MLRs that would benefit the patients they serve.”

Three states, Connecticut, Nevada, and Oklahoma, have already announced intentions of pursuing similar action, with other states expected to join.

“NADP will be increasingly involved in state-level legislative efforts to fight MLR requirements for dental plans in alignment with our mission to improve consumer access to affordable, quality dental care,” Adelberg said.

But the ADA, whose members spent $5.5 million on the Massachusetts campaign, vowed to be right there fighting for MLRs with rebates.

“The dental insurance industry opposes this reform because they would like to continue doing business as usual,” Olson said. “With consumers more conscious of their pocketbooks than ever, they deserve to get as much out of the premiums they pay for dental insurance as possible…We’re confident legislators and the constituents they serve will see that this is a consumer protection that’s needed and timely.”

“Fear-producing dishonesty from the NADP is expected,” said Mouhab Z. Rizkallah, chairman of the Committee on Dental Insurance Quality and Massachusetts orthodontist, who is largely responsible for bringing the question to the ballot. “It will only slow the inevitable – a dental MLR in every state, and improved dental insurance for all,” he said.

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].