On November 8, 2022, Massachusetts voters overwhelmingly voted yes for Dr. Mouhab Rizkallah’s creation, “Question 2,” which requires Massachusetts dental insurance companies to pay at least 83% of premium revenue for patient claims. That means insurers can now only keep 17% for administrative expenses and profit; this first-of-its-kind law in dentistry will now change the nation.
Q: What is the current percentage that dental insurers pay for patient care?
A: Prior to Question 2, Massachusetts insurers typically paid only 70% for patient care. They must now pay at least an 83% MLR (medical loss ratio, a percentage of premium revenue paid toward patient care).
Q: What percentage does a dental insurance plan need to cover its administrative expenses and profits?
A: Massachusetts dental insurers collect just more than $1 billion annually in total premium revenue. Their administrative costs range between 6%, if they are efficient, and 10%, if they are overpaying officers. While the National Association of Dental Plans indicates that insurers aim for a 5% profit, most dental insurances are “not-for-profit,” so they don’t get that 5%. I expect that they will all settle into the wasteful 10% administrative category (with overpaid CEO’s), leaving 90% for patient care (up from 70%).
Q: If even 10% is wasteful for administrative costs, and they are currently keeping 30%, what are they spending the remainder of that 30% on?
A: Egregious Giveaways. For example, while Delta Dental of Massachusetts is not-for-profit, its 2019 IRS form 990 shows it literally “contributed” $291 million to its parent company and paid only $177 million for patients that same year. In 2018, the figures were $335 million vs $184 million.
Q: Aren’t insurers now incentivized to spend all 83% on patient care to avoid refunding some premium revenue to patients?
A: That is the intrinsic beauty of my law. Insurers that spend under 83% of total revenue on patients must refund revenue until the 83% MLR is met, which means they are giving back their 17% too. That changes the dental insurance paradigm from “insurers make more by spending less” to “insurers make more by spending more on patients.” It changes everything.
Q: How might insurers spend more on patient care?
A: Insurers can increase annual maximums, cover higher percentages for procedures, add cosmetic procedure coverage, implement fairer fee schedules, allow assignment of benefits, and eliminate unfair audits to increase spending.
Q: Why did you take it upon yourself to create this amazing law instead of letting organized dentistry do it?
A: Because of powerful dental insurance lobbyists, organized dentistry MLR bills always die in committee without a vote. While I knew a ballot question would sidestep the lobbyists, I also knew that organized dentistry would never attempt a ballot because it was too risky—only 3% of ballot applications ever make it to the ballot for a vote, and only 1% win. Seeing no other avenue to free our profession, I took the ballot risk myself. I put $2.8 million of my own money and about 5,000 hours of my own time into it.
Q: The ADA supported you with an additional $5.5 million. How hard was it to convince them?
A: It was pulling teeth! The ADA receives approximately $150 million in annual member dues, but they repeatedly dismissed us. Dentists across the nation took to social media, complaining to the ADA that implementing a medical loss ratio through a ballot was the key to freeing the profession. Then the ADA got on board, and then they were fantastic.
Q: Why is a passed ballot question law more powerful than a normal legislative law?
A: Most legislative bills fail to become laws. But even when they succeed, they are often weakened with loopholes by their opponents. My ballot law was written by me, and the lobbyists never saw it before I filed it. It was never watered down, and now it is the powerful template for the nation.
Q: How many dentists and states supported the ballot question?
A: The 5,000 dentists in the state united in a fashion never seen in dentistry. They decorated their offices, yards, staff, social media, and everything in between with “Yes on 2” gear. The president-elect of the Massachusetts Dental Society, Abe Abdul, DMD, heroically united the Massachusetts Dental Society and the ADA and convinced 49 states’ dental societies to contribute to Question 2. He deserves national recognition for his singular impact.
Q: How do you expect this will be adopted throughout the nation?
A: Massachusetts Question 2 will free the nation because it requires robust annual financial reporting from dental insurers. This transparency will demonstrate that we need to regulate dental insurers at the federal level with a medical loss ratio in the same way we regulate medical insurers federally with a medical loss ratio. I have already started that process, and once a federal requirement is in place, each state will be required to make state law that complies. I suggest they just copy my Massachusetts law—the state template already exists.
ABOUT DR. RIZKALLAH
Dr. Rizkallah attended Stony Brook Dental School and has an orthodontic certificate from Boston University. He is president of the Medicaid Orthodontists of Massachusetts Association and chairman of the Committee on Dental Insurance Quality. He can be reached at mouhabrizkallah@gmail.com.
