Committee Approves, Helps Frame Medical-Loss Ratio for Dental Insurers

An Assembly committee yesterday approved a bill requiring dental insurance companies to spend a specified percentage of premiums on dental care.

Current law requires other health insurers to meet medical-loss ratio standards — in most cases to spend 80% of their premium dollars on care — but dental insurers do not face that requirement.

AB 1962 by Assembly member Nancy Skinner (D-Berkeley) would change that.

“It ensures more premium dollars go to care of patients in dentistry,” Skinner said yesterday at the Assembly Committee on Health. “It takes California’s medical-loss ratios and applies them to dental care.”

Dental insurers oppose bill, saying dental plans are a completely different animal from medical plans, and they belong in different health funding environments.

“The provisions [in this bill] are arbitrary,” said Richard Jones, a member of the California Association of Dental Plans who represented the association at the hearing. “California has some of the lowest premiums in the country, and this bill will change that.”

Jones argued that, since medical premiums cost so much more than dental premiums, the same administrative measuring stick can’t be used. If it is, he said, insurers would need to hike reimbursement rates to dentists and consumers’ premium rates would rise accordingly.

Carrie Gordon, legislative advocate for the California Dental Association, said that some dental insurers use as little as 38% of the premium dollars they collect for actual dental care, and that’s just not fair to consumers.

“This bill is about patient value, making sure patients get what they’re paying for, and it’s about transparency,” Gordon said. “There is little evidence to claim that premiums will rise. Medical plans made the same claims,” she said, when medical-loss ratios were first being considered as a requirement for health plans.

“Exempting dental plans from [the same requirement] trivializes the importance of a patient’s oral health,” said Jim Stephens, president of the California Dental Association. “At a time when health care providers are being asked to keep costs down and maintain quality, it’s disingenuous to exempt dental insurers from this.”

The percentage of the medical-loss ratio may still be determined. The bill lists it at 80%, the same percentage required of health insurers. The state instituted a 70% medical-loss ratio for dental insurers within the Healthy Families program, and dental advocates said that figure rose, over time, to 80%.

At one point near the end of the extended debate, Jones said there is national dental association guidance that pegs the medical-loss ratio at 60%.

Assembly member Richard Pan (D-Sacramento), the committee chair, asked Jones if he supported the idea of medical-loss ratio in principle — forgetting the positioning of the percentage number for a moment.

“Aside from the number itself,” Pan said, “are you in support of the MLR for dental insurance?”

Jones said he was.

“We fully support transparency,” Jones said, “and we’re willing to work for an equitable solution here.”

“I hear the [bill] author also wants to work for an equitable solution,” Pan said. That means the issue comes down to agreeing on that percentage number, Pan concluded.

“What I am struck by is the need for more information and transparency here,” Pan said. “We need to ensure that the people who are getting a dental plan are getting value.” 

“If [dental patients] are only getting 40 cents on the dollar, they’re not getting value,” Stephens said. “This bill is about getting them the care, that’s what it’s about.”

The measure passed committee on an 11-1 vote, and now heads to the Assembly Committee on Appropriations.

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