In November 2022, Massachusetts voters approved a ballot initiative that will require dental insurers to spend at least 83% of customer premiums on patient care and initiatives aimed at improving the quality of care. The new law will require insurance companies that don’t reach that minimum percentage, known as a medical loss ratio, to issue rebates to their customers, beginning in 2024. Health insurance companies across the country are already subject to similar rules for medical care, but the law is the first of its kind to apply to dental insurers.
Alec Eidelman, PD19, HSDM lecturer on Oral Health Policy and Epidemiology, provides perspective on what the impact of the law may be in Massachusetts and its implications for other states. Eidelman practices as a general dentist at Cambridge Health Alliance, where he is the program director for the General Practice Residency. He holds a DMD, MPH, and Master of Medical Education degrees and is actively involved in state level oral health policy. He was a recipient of Massachusetts Dental Society’s 10 Under Ten award in 2022.
With dental insurance being treated more like medical insurance, with similar standards, regulatory compliance, and oversight, does it elevate the importance of oral health?
The dental medical loss ratio legislation enacted in 2023 in Massachusetts is a critically important legislative advancement in oral health policy whereby dental insurance plans will be treated similarly to medical insurance. When the Patient Protection and Affordable Care Act (ACA) of 2010 was enacted, the medical loss ratio reporting and regulatory language was crafted. It was intended to enhance transparency by for-profit insurance carriers and to meet the triple aim of the ACA—specifically controlling cost growth on healthcare spending and maximizing access to care. The regulatory oversight that will now be present in Massachusetts to have standard reporting requirements for commercial insurance companies is a vital step in healthcare finance transparency. Dental insurance policy holders and public health officials will have stronger abilities to hold dental plans accountable.
What immediate impact do you think this will have for patients?
It is unclear to say yet with any certainty what the law’s impact will be on the number of dental services covered by commercial dental insurance in Massachusetts, rates of reimbursement, number of individuals covered by commercial dental insurance, or the number of services that individuals are eligible for in different commercial insurance plans. One thing we will have, is a clearer understanding of whether premium dollar revenue from commercial insurance subscribers in Massachusetts is spent on clinical care and quality improvement, or on administrative costs. Patients may see rebate checks if the Impact of Dental Insurance Reform Policy Perspective thresholds for spending are not met by their dental plan. Depending on the definitions of what could be considered clinical care and quality improvement, which will presumably be standardized, individuals with dental insurance in Massachusetts are likely to see these refund checks.
For providers?
The potential impact for dentists contracted with dental commercial insurance plans might be changes to reimbursement rates, number of services covered, or the number of patients now covered by commercial plans to request appointments with their preferred dentist. Rebate checks are not expected to be sent to dentists, but as part of potential rebate checks, there may be stipulations that the money be spent toward future dental services.
For dental insurance plans?
Dental insurance plans are correct to speculate that if individual and small market commercial insurance companies are held to the same standards as large plans, there will likely be decreased competition and ability for them to operate effectively—this was evidenced by data from California policy changes since 2014. The argument also presented by dental plans that this will result in cost-shifting by dentists and increased premiums for patients is not necessarily based on evidence.
What implications could this new law in MA have for other states?
From what we witnessed in MA, with a resounding 71.6% voter approval for the ballot initiative, it’s likely that many more states will have public support in passing similar legislation. The question will be if they approach it like California, where there is no strict threshold of 83% spending, and only reporting requirements and loose guidance on how to spend surplus premium dollars, or if other states will mirror Massachusetts and leapfrog this legislation and jump right to a threshold spending number such as 83% before having full reporting requirements.
What should we expect to see once the law is implemented in Massachusetts?
The dental medical loss ratio will have a very significant impact on reporting for commercial dental insurance companies with uncertain impacts on access to dental care and financing. How the Massachusetts commissioner of insurance oversight defines clinical care and quality improvement will likely determine if subscriber premium dollars are experienced at the dental office, or seen in advertisements, education, or prevention programs in the community. One thing we do know from the resounding voter support for commercial dental insurance oversight, is that dentists and the public want to know where their money is going and are depending on state oversight to monitor spending growth on administrative costs.
