Question 2 – Should dental insurers spend more on care?

Massachusetts voters face four statewide questions on the November ballot. Question 2 deals with dental insurance.

Question 2 asks voters to decide whether insurance companies should be obliged to spend 83% of premium dollars on patient care.

Massachusetts already requires health insurance companies to allocate 88% of premium dollars to patient care, called a medical loss ratio. Any overage is routinely refunded. This initiative would extend the same requirement to dental insurance companies.

The measure is supported by the Massachusetts Dental Society and the American Dental Association. Patients, they claim, deserve to know how much of their premium is used for their actual care as opposed to much is allocated to administrative costs and how much is profit.

A study commissioned by National Association of Dental Plans looked at the costs and benefits of the proposal. It found most of Massachusetts dental insurers allocate between 60% and 79% of premiums to patient care, depending on the size of the company, with smaller companies allocating fewer dollars while larger companies allocate more. The remainder of premiums charged is used, in part, for administrative costs.

The study by the Milliman Research group found the proposal would affect smaller companies because the administrative costs of insuring patients is shouldered by fewer clients. Also, the cost of fulfilling the 83% mandate, coupled with the cost of rebates, would affect company revenue.

If passed, the measure would also require any increases in dental insurance premium costs to be approved by the state Division of Insurance, just as it does for medical insurance premiums.

At a recent meeting, the state Health Connector Board approved a rate hike for medical insurance that averages 7.6% for insurance coverage purchased through the Health Connector. Some 85,474 unsubsidized customers or those who receive advance premium tax credits and purchase through the Health Connector would be affected by the rate increase.