Jun 26, 2024
Dental Loss Ratio - Could Be Coming To Your State
From the American Dental Association News (ADA): NCOIL (the National Council of Insurance Legislators) adopts Medical Loss Ratios for Health Care Services Plans Model Act
This year is shaping up to be a big one for legislation related to dental loss ratios.
States are introducing Dental Loss Ratio Legislation
In 2024, nine state dental societies have already introduced legislation for dental loss ratios, which refers to the insurance premium revenue that is spent on patient care instead of operating costs. These include:
- Illinois
- Nebraska
- New York
- Oklahoma
- Pennsylvania
- Rhode Island
- Virginia
- Washington
- West Virginia
Arizona, Colorado and Nevada adopted legislation in 2023. New Mexico adopted legislation in 2022.
What Are Other States Doing?
January 1, 2024, Massachusetts implemented dental insurance reform mandating a minimum amount a dental plan must pay on dental care costs. 83 percent of the dental premium must be applied toward dental care with 17 percent can be applied to administrative costs or plan profits.
Arizona, California, Maine and West Virginia have enacted laws requiring the reporting of Medical Loss Ratio which includes information on premiums, dental claims or fees, however, none of these states have set the percentage for Dental Loss Ratio.
Connecticut and Rhode Island introduced Dental Loss Ratio legislation with percentages in the 80s with no evidence that setting the percentage will increase patient access or improve the quality of care.
Some of these states have filed more than one measure, and nearly all of the bills would set a minimum ratio that dental plans must meet, with a corresponding rebate requirement for plans spending less than that minimum. While every proposal is framed around ensuring patients receive the most health care value from their dental plans, each state has taken a unique approach to calculating its dental loss ratio.
What Are The Different Associations and Legislators Doing?
Additionally, The National Council of Insurance Legislators (NCOIL) voted at the Jan. 26 Health Insurance and Long Term Care Issues Committee Meeting to pass model legislation for a dental loss ratio. The bill includes language negotiated between the ADA and the National Association of Dental Plans (NADP), which represents dental insurance and third-party payer companies.
Known as the Medical Loss Ratios for Health Care Services Plans Model Act, the model legislation is sponsored by Delegate Steve Westfall, R-W. Va., and co-sponsored by Rep. Rita Mayfield, D-Ill.
The model law’s main goal is to “provide for transparency of the expenditure of dental health care plan premiums, and to require annual reports and remediation if the dental loss ratio falls below a certain percentage,” according to the act, which borrowed elements from legislation in other states.
Currently, qualified health plans for medical insurance have to file a comprehensive medical loss ratio report annually and provide rebates to consumers if premiums cover more than 20% of administrative expenses. While every state has a minimum ratio for medical insurance, not many have a similar standard for dental insurance.
NCOIL — a national organization made up of legislators, many of whom are members of insurance committees — discussed its dental loss ratio model for more than a year before seeking outside insight. The ADA and NADP then worked to negotiate dental loss ratio model language to eventually be proposed in state legislatures.
The model language includes protection from dental plans raising their premiums once a dental loss ratio is set. It also says that a state department of insurance will set a loss ratio for a dental plan if it is determined to be an “outlier” for having a low dental loss ratio.
ADA Additional Resources
Medical Loss Ratio Model Legislation Helps States Hold Dental Insurers Accountable
Massive Massachusetts win helps set stage for future insurance reform
More Resources
The Impact of Dental Insurance Reform – Harvard School of Dental Medicine
Applying Medical Loss Ratio to Dental Insurance: Considerations for Legislators - NADP
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