Massachusetts will become the first state to impose Obamacare-style regulation on dental insurance, requiring insurers to put a certain percentage of the premiums they collect toward dental care after a ballot referendum received wide support.
The Medical Loss Ratios for Dental Insurance Plans Initiative will soon force dental insurers to spend at least 83% of premiums on dental services, versus administrative or other overhead costs, or refund the excess to beneficiaries.
The measure will mean that dental insurers face requirements similar to those of health insurers, which are already required by the federal government to spend at least 80% of the money they take in from premiums on healthcare costs under the Affordable Care Act. There is no federal minimum threshold in place for dental insurers.
“We do not expect dental insurance companies to waste our premiums by overpaying officers, having giant, wasteful commissions, sneaking payments to affiliates or gifts to parent companies that just add another layer of waste,” said Daisy Kumar, a member of the ballot question committee.
The initiative’s success could spur other states or the federal government to put forward similar proposals implementing thresholds on dental insurers.
Dentists and insurers were fiercely divided over the Massachusetts measure. Proponents of the measure, such as the American Dental Association and the Massachusetts Dental Society, claim that it will put patients’ interests over profits, preventing insurance companies from using the money for executive salaries or other overhead expenses unrelated to dental services.
An opponent of the measure, Delta Dental, the largest dental insurance provider in the state, covering more than 2 million people, said it could push some insurers to raise premiums to cover costs. Other opponents have pointed to differences between dental and health insurance, including the smaller premiums, suggesting that dental insurers should not be subjected to the same types of thresholds as health insurers.