In all age groups, dental care is the main health service that is neglected because of its cost. There are several reasons, but two stand out.
First, MaineCare, Maine’s Medicaid program, does not cover comprehensive adult dental care, leaving thousands of Maines without coverage for the dental care they need. Second, many people with private dental insurance cannot afford care due to high deductibles and very low annual benefit caps that result in high out-of-pocket expenses. A new bill, LD 1266, An Act to Improve the Value of Dental Insurance, would address these inequities in private dental insurance.
An important difference between medical and dental insurance is that under the Affordable Care Act (ACA), medical plans must spend at least 80% of premium income on health care claims and improving quality, leaving no more than 20% to spend. on administration, marketing and profit.
This requirement is known as the Medical Loss Ratio (MLR). MLR holds insurance companies accountable and helps ensure that the money people spend on premiums is actually used to provide patient care. Maine lawmakers recognized the importance of the MLR requirement when the last legislature voted almost unanimously to codify the ACA’s 80% MLR standard for health plans into Maine law. However, under the ACA and Maine law, dental insurance plans can circumvent this requirement.
But patients deserve better from their dental plans. Recognizing this, California passed a law in 2014 that requires dental insurers to report MLRs to the state, which are made public online. The data revealed by these reports is alarming. As recently as 2018, one plan had an MLR of 4%. This means that for every dollar paid by individuals in premiums, the insurer spent only 4 cents on patient care. While California leads the nation in MLR transparency, no state requires dental insurers to spend as much of their premiums on patient care as medical plans are required to under the ACA.
In 2016, dental insurers paid 46% of dental spending in the United States, or about $50 billion annually. In California, a 2018 report showed that only 57% of dental plans spent at least 60 cents of every dollar collected on premiums for patient care.
Across the country, billions of dollars are spent each year on insurer executive salaries and administrative costs rather than patient care. Requiring dental insurers to have an 80% MLR could significantly reduce the amount patients pay out of pocket for dental care and insurance costs.
The Maine legislature has an opportunity to address the disparity in premiums versus patient care spending. State Senator Heather Sanborn has submitted a bill, LD 1266, that would require dental insurers to report MLRs to the Maine Bureau of Insurance and set a minimum MLR of 80% for dental plans. Dental plans that spend less than 80% of premium income on patient care and quality improvement should refund the difference to their members.
LD 1266 is a common sense solution that would keep dental insurers on par with other health insurance companies. A dental MLR requirement would mean that dental insurers spend less on executive salaries and company profits and more on what matters: providing dental benefits to Mainers and reducing their out-of-pocket expenses for dental care.
Maine should lead the country in requiring dental insurers to report their annual MLR and spend more of their premium revenue on patient care.
After all, dental care is health care.
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