A citizen-initiated ballot question is scheduled to appear before Massachusetts voters on November 8, 2022. The initiative would require dental insurance companies to submit to the insurance commissioner, current and projected medical loss ratios for plans and specified supportive financial information. Carriers would be required to file group product base rates and any changes to group rating factors that will take effect in the next calendar year, in July of the preceding year.
The commissioner would be authorized to approve or disapprove of any product rates. It would establish the medical loss ratio (MLR) for dental plans at 83% and require the insurer to refund the excess premium to its covered individuals and covered groups.
Medical loss ratio (MLR) is a measure of the percentage of premium dollars that a health plan spends on medical claims and quality improvements, versus administrative costs. The Affordable Care Act (ACA) and numbers of state laws set minimum MLR standards for health insurance in the US.
Although Massachusetts currently has established an 88% MLR for medical insurance plans, no MLR exists for dental plans. Dr. Mouhab Rizkallah, an orthodontist and chairperson of the Committee on Dental Insurance Quality, said the initiative is aimed at breaking up an abusive “monopoly” in the dental insurance industry.
The Committee on Dental Insurance Quality has 10 officers (5 doctors/5 public citizens) and hundreds of members. Rizkallah stated, “The 50/50 officer ratio very intentionally mirrors the balanced doctor-patient relationship involved in healthcare.”
“The patient-officers are mothers and fathers of young children, and children of elderly parents who need better value and protections in their family’s dental insurance. The doctor-officers each have a powerful advocacy story fighting for their patients against insurance companies. We are a group of servants.”
Rizkallah definitely anticipates attacks from the dental insurance industry on the current voter initiative and MLRs overall. “We absolutely expect it. Dental insurance company CEO’s and corporate officers are amongst the highest paid in the nation, and often disguise their companies as “not for profit.” Just Google “Dental Insurance CEO vs…”. So, we expect serious opposition as we shift billions of dollars from corporate yachts to patient needs.”
Rizkallah was questioned as to why he felt a voter initiative aimed directly at voters was a superior path, versus going through the Commonwealth’s legislature. He answered that insurance industry lobbyists in Massachusetts are immensely powerful and hold significant sway within relevant legislative committees.
“The Massachusetts Dental Society has been trying to get this legislation passed at the state house repeatedly but has failed to get the legislative support needed.,” stated Rizkallah.
“The Massachusetts Dentists Alliance on Quality Care (MDA) is 100% behind this Ballot Initiative.” Rizkallah continued, “Essentially, every dental organization in the country should get behind this question, because it will pave the way for their own states to obtain adopt a dental MLR, which will provide quality coverage for patients.”
The 83% MLR was not a random figure to be placed on the direct voter initiative. “The proposed 83% MLR was intentionally chosen to be lower than the current medical MLR (88%) of this state.” said Rizkallah.
“This lower figure strategically ensures the passage of the ballot initiative, by poising us to effectively combat the anticipated false-advertising from dental insurers. They will undoubtedly argue that the figure is not financially viable for them. Set at 5% lower than medical, we believe voters will conclude it is indeed viable, and the voters will therefore pass the ballot initiative.”
“Once passed, however, the 83% figure will rise, because our ballot initiative also requires annual financial reporting by insurance companies, which will justify increases in the MLR percentage. We expect the final dental MLR to gradually rise to at least 88% with just five years of financial reporting.” asserted Rizkallah.
Objectives espoused by Rizkallah are not limited to Massachusetts. “Our strategy of prioritizing the passage of a graduating MLR (rather than prioritizing an aggressive MLR to start) is designed to serve the nation of states. We expect this data to be useful in allowing other states to confidently adopt a dental MLR percentage through legislation (rather than an expensive ballot initiative), because the legislators will have excellent incremental Massachusetts reference data.”
“The Massachusetts MLR ballot initiative is designed to impact hundreds of millions of patients around the nation. We are not just thinking of Massachusetts. We have a national agenda, based out of Massachusetts.” concluded Rizkallah.
Dental Insurance Industry
The National Association of Dental Plans (NADP) is a non-profit lobbying group representing the interests of dental insurers. This organization points to their success in killing or tabling state legislative bills sponsored by a wide variety of state dental associations. These state bills all relate to alleged reforms regarding dental insurance matters (“Patient Bill of Rights,” assignment of benefits, coverage for pre-existing conditions, percentage rollover of annual benefits, network leasing, insurance payments through virtual credit cards, reporting and/or establishing minimal dental MRL, etc.).
The NADP, along with insurance industry stakeholders are strongly opposed to bills on insurance industry reforms submitted by the Massachusetts Dental Society, as well as the upcoming MLR dental insurance voter initiative.
An August 2, 2021, a joint letter to the Massachusetts’ Senate and House Chairpersons, from the NADP, America’s Health Insurance Plans (AHIP), American Council of Life Insurers (ACLI), and Life Insurance Association of Massachusetts (LIAM) voiced forceful opposition to numbers of alleged dental insurance reforms.
The insurance industry lobbyists contend “these dental insurance bills seek to increase dentists’ reimbursement and impose additional regulatory burdens on dental plans at the expense of Massachusetts consumers. None of these measures will provide meaningful rights or benefits to dental consumers. Rather, they will unnecessarily increase costs for dental plans, leading to higher premiums and restricted access to care for Massachusetts constituents.”
Specific areas of concern for the corporate lobbyists were assignment of benefits, reporting and maintaining an established MLR, compliance with a “Patient Bill of Rights,” and direct dental care agreements.
Relevant to operating within an established MLR the lobbyists stated, “Dental loss ratios are significantly lower than medical ratios. Dental premiums are 1/20th of medical premiums while dental plans and medical issuers perform the same basic administrative functions with similar structures (e.g., claim payment, customer service, network development, anti-fraud, etc.). Dental plans have far fewer premium dollars to support similar administrative functions, which are critically important.”
Dr. Jill Tanzi, a director with MDA says the insurance industry’s arguments are highly specious and self-serving. Tanzi asserts unlike medical insurance, dental insurance never covers for catastrophic losses. The dental insurance industry caps annual benefit losses generally at $1000-2,000 per patient enrollee.
Losses are highly actuarily predictable, far more than medical insurance. Tanzi asserts that MLR for dental insurance should in reality be higher than medical insurance, because of the lower and more predictable insurance company operational costs.
Alicia Malaby, Communications Director for the California Dental Association (CDA) pointed to the CDA’s efforts to improve transparency of dental benefit plans for dentists and consumers.
“AB 1962 (2014) required commercial dental plans to annually disclose to the state how much premium revenue they spend on patient care versus administrative costs, known as a dental loss ratio (DLR). The reported data show a wide range of premium revenue spent on patient care, with a quarter of all California dental plans spending less than 50% of premiums on care and some plans even falling below 10%.”
Unfortunately, although numbers of dental insurance companies operated at disturbingly avaricious MLR levels, no mandatory MLR levels were implemented.
Kathy Ridley, Interim Executive Director for the Maine Dental Association offered, “The Maine Dental Association (MDA) believes dental plans should be held to a standard similar to that of health plans. Typically, dental plan maximums are capped at a relatively low number – often just $1,500 and sometimes lower. Annual benefit caps on health insurance are illegal in Maine.”
“If a dental plan is paying just sixty cents of every premium dollar on care and forty cents is going towards administrative costs or profits, that’s a bad deal for Mainers. LD1266 sets a minimum loss ratio of 80% and requires that if the loss ratio is not met, rebates will be paid to subscribers.”
“After a lengthy public hearing and two work sessions, the Committee voted to carry-over LD 1266; we expect to see an additional work session and Committee vote in short order. The MDA is working with patients to get the message out to legislators.”
Randi Sussman, Director of Communications and Marketing for the Connecticut State Dental Association (CSDA) presented the CSDA’s perspectives. “CSDA is promoting enhanced transparency for patients through dental loss ratio legislation. Patients deserve visibility into how much of their dental insurance premiums are paying for care as opposed to administrative costs, as was mandated of major medical plans in the Affordable Care Act.”
“Our latest statewide public opinion survey found that 94% believe Connecticut should require transparency by requiring dental insurance companies to report the percentage of premiums used for administrative costs. And, a nearly identical 91% say the state should impose a limit on the percentage of a person’s premium payment that can be used for administrative overhead costs.”
“CSDA wants to hold insurers accountable to providing coverage that is a good value for patients by advocating for legislation that will set a minimum standard for the portion of premium payments that must go to actual care.”
Sussman and the CSDA expressed concern for challenges faced by patients frequently brought about by dental insurers. “Dental insurance should be reliable and predictable for patients and their dentists. Navigating the health care system is complex enough. Patients don’t need further red tape or unexpected expenses to deter them from pursuing dental care they need to stay healthy. That is why the CSDA is advocating for “Dental Bill of Rights” legislation. The dental loss ratio is just one key element of the proposed legislation.”
Sussman elaborated, “Dental insurance reform, as in the Dental Bill of Rights, will help to ensure that more of the premium dollars patients pay will go to care provided, rather than complicated and unpredictable administrative fees. And, it will make it easier for Connecticut residents to act on staying healthy—by regularly seeing their dentist, making coverage more certain and ending unexpected bills.”
Voter support is apparently congruent with efforts of the CSDA. Sussman concluded, “According to our latest statewide public opinion survey, Connecticut residents overwhelmingly support responsive consumer protection legislation. A decisive 95% of state residents say it is important for the state to establish a Dental Bill of Rights that would “establish clear, simple and transparent” dental insurance processes.”
A point which came forth repeatedly by advocates for establishing dental insurance MLR was an intended paradigm shift to the dental insurance industry.
Today, dental insurance companies may generate income by delay and denial of claims. They may seek to limit the number of providers (out-of-network providers) and clinical services which they deliver to patients. The companies may freeze or even drastically reduce allowances on provider fee schedules. Insurers may place unreasonable caps on annual patient benefits, as well as unreasonable “waiting periods” prior to an insured patient’s right to access benefits. Unlike medical insurance, dental insurance may deny claims for preexisting conditions.
An established and regulated MLR would shift the focus of dental insurers. Insurance company executives could only generate more revenue, by spending more of the company’s money on patient benefits. This would represent a win-win-win scenario for the insurance industry, doctors, and most importantly, patients.
Rizkallah explained, “A private dental insurer will no longer make more by spending less. Since they only get to keep 17%, the bigger the 83% dollar amount, the bigger the 17% amounts to in total dollars.” The more the insurer spends on benefits, the more may be kept for company overhead expensing.
Rizkallah emphasized that both dental Medicaid and privately insured dental patients would less likely be cheated out of “medically reasonable and necessary” benefits.
Structural reforms to the dental insurance industry, such as a set MLR, can only be accomplished though voter initiated statutes in limited states. Other states require involvement of state legislatures. In any case for attempted reforms, lobbyist efforts of the insurance industry should never be discounted.
ABOUT THE AUTHOR
Dr. Michael W. Davis practices general dentistry in Santa Fe, NM. He also provides attorney clients with legal expert witness work and consultation. Davis also currently chairs the Santa Fe District Dental Society Peer Review Committee. He can be reached at MWDavisDDS@Comcast.net
FEATURED IMAGE CREDIT: Mohamed Hassan from Pixabay.