Mass. ballot initiative may represent start of nationwide dental insurance reform

A grass-roots voter initiative on November’s Massachusetts ballot could represent an initial step toward nationwide dental insurance reform, advocates say.

“This is kind of the bellwether for everyone across the country,” Brian Monteiro, director of governmental affairs and public relations at the Massachusetts Dental Society says in an American Dental Association podcast. “Eyes are on us.”

If passed by voters on Nov. 8th, the measure would require dental insurance carriers to spend at least 83% of premium dollars on patient care or rebate unspent portions to policyholders.

Under the Affordable Care Act, medical insurers are required to minimally operate at an 85% medical loss ratio for larger carriers, and 80% for smaller health insurance companies. In 2006 Massachusetts became the first state to implement a medical loss ratio that holds medical plans to an 88% standard. Dental insurance companies, though, are exempt from such provisions.

Other states' efforts

States have toyed with similar efforts to force dental insurers to reveal loss ratios and set minimums. A Maine bill passed in March requiring dental insurers to report their dental medical loss ratio data. The initial version of the law would have required dental insurers to meet an 80% medical loss ratio and repay customers when they fail to meet the standard. The bill was amended in the legislature to remove the 80% requirement and rebate, amending the law to only require insurers to publicly report their medical loss ratio

A California law, the Dental Plan Transparency Act, required insurers to report loss ratios after it was found the average dental loss ratio was 61%, far below the 76% national average, with some plans falling as low as 4% spent on patient care.

“If medical plans can clear an 88% medical ratio, we feel there's no reason why dental insurers can't hit that 83% number,” said Dr. Andrew S. Tonelli, D.M.D., co-chair of the Massachusetts Dental Society's Government Affairs Committee in the ADA podcast. “If this bill passes, I'm going to have the confidence as a provider that my patients are getting a reasonable deal with their money. And I can't say that right now, which is a little bit frustrating as a provider.”

The ADA is supporting the ballot initiative, which was kicked off by a single orthodontist in the state who spent his own millions gathering voter signatures for the referendum, contributing $5 million on the Massachusetts campaign.

“We support the issue and plan on it becoming a nationwide push,” said Chad Olsen, director of the ADA’s Department of State Government Affairs.

Not surprisingly, dental insurers have lined up against the proposal. Seven donors have thus far reported contributing $5 million to the “No” campaign, almost all of it from the giant Delta Dental. Others, such as Sun Life, Concordia, and MetLife, have pitched in with smaller amounts.

Fundamental differences cited

The insurers argue that dental insurance is fundamentally different than medical insurance. Potential dental insurance company losses for payout of patient benefits are more actuarially predictable, they say. Most dental insurance companies impose yearly maximum payouts limited to about $1,000 to $1,500, where medical insurance may be on the hook for unlimited sums.

Dental insurance plans mostly cover low-cost preventative care, and barely cover more involved care like crowns and bridges.

Medical insurance is almost the opposite, paying out minimal amounts for basic services but really covering serious illnesses, expensive diagnostic testing, and rehabilitation.

Even the ADA concedes that dental insurance belongs in a separate category.

“Dental plans are basically gift cards with dentistry done on the back end through processing policies,” said Olsen. “We'd like the dental insurance companies to adhere more closely to being a real insurance product and I think MLR would force them to take a hard look at their product design and maybe become closer to major medical insurance.”

Olsen said dental plans are designed so that they make money if patients don't go to the dentist.

“I think we would see things like dental plans starting to embed in major medical plans and becoming part of them,” he said. “I could see some differences in plan design where they're starting to look better, because the insurance companies want patients to go to receive coverage.”

Delta Dental of Massachusetts, which reported a 2019 loss ratio of 74%, close to the national average, contends that the Massachusetts proposal does not allow carriers to exclude investments in customer online portals, disease management, or fraud prevention, from the loss ratio calculations — which health insurers can — and could discourage dental carriers from investing in those programs. It also warns premiums could rise severely if the referendum passes.

An analysis by Tufts University’s Center for State Policy Analysis, was down the middle in its evaluation. The reports said insurers may actually lower premiums and streamline administrative functions, or cut profits. They might also begin covering more procedures which would allow dentists to charge higher prices.

Overall, the Tufts reports said, the ballot question probably won’t significantly impact consumers.

“I think that the Tufts study had its good qualities but it was looking at the near term effect,” said Olsen. “Our view is long term and we think there would be changes that would be gradual and beneficial.”

The ADA’s Olsen said he thinks similar bills will be filed in a handful of states next year. “The eyes are turning to look at Massachusetts to see what happens,” he said.

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

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Correction: An earlier version of this article incorrectly stated that a minimum loss ratio was included in the Maine legislation enacted in March. That provision was removed before the bill was passed.

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