Massachusetts residents can vote on a waste that could cost them their dental insurance through the November ballot, but a new study warns consumers may not see much impact — even if the question wins at the polls.
The second question on the general election ballot asks whether voters support requiring dental insurance carriers to spend 83% of premiums on patient care, not on administrative costs, taxes or benefits. If carriers spend less than 83 cents for every dollar of monthly subscription fees — a limit known as the loss ratio — they must pass on discounts to insured individuals and groups.
But it is difficult to know whether the loss rate is at the right level, and how it will affect doctors and patients, according to a report released Thursday by the Center for State Policy Analysis at Tufts University’s Jonathan M. Tisch. College of Civil Life.
“This poll question is built on limited information,” the report shared with MassLive. “It’s unclear whether dental insurers are close to — or far from — the 83 percent target. Indeed, there is no clear reason for the 83 percent figure, and doing so would make us the only country with a stable rate of dental insurance.”
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In other words, the extent to which the report will be “some small” or “some may be large” is an interesting result from the referendum vote, based on the accuracy of the research so far.
The revised dental insurance will come into effect in January 2024.
The report, which does not stand for or against the voting question, indicates that dental loss is consistent with the general standard of medical insurance. In Massachusetts, health insurers are required to meet the 85% or 88% ratio, but they are also given more flexibility than dental insurers to comply with state law.
Higher premiums for medical insurance are also calculated for higher risk, unlike lower premiums for dental insurance which take into account lower risk and stricter “limits”.
“In developing medical insurance loss statistics, policymakers and regulators were guided by a wealth of information about market conditions and the financial health of insurers,” the report says. “There is no comparable information on the current financial situation of dental insurance in Massachusetts. The one relevant lesson The publication uses best practices but is mandated by the national dental insurance trade group. “
The study, conducted by the National Association of Dental Plans, found that many insurance plans are already in the rating race, with their loss rate hovering around 80%. To add 3 percent, insurers would have to lower their monthly premiums or improve their operations to reduce operating costs or profits, according to the Tufts report.
In other words, insurers may pay more for dental claims, such as giving dentists more money for their procedures. This, in fact, can give doctors an opportunity to communicate better as insurers simultaneously try to meet their loss claims.
But it can also cause patients to pay more for their dental care.
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“One reason is that most dental insurance includes very high premiums, where the patient pays a percentage of the total,” the report said. “Another thing is that with the high prices many patients reach their annual limit – and have to pay for any other treatment out of their own money.”
The report disputes the trend, however, predicting inflation “should be modest.” The report also said that the election referendum “is unlikely to result in significant reductions in premiums that would make insurance more affordable,” the report said.
A voter information guide from Secretary of State Bill Galvin’s office has a dire warning on the ballot question. A dissenting opinion from Louis Rizoli, of the Committee to Protect Public Access to Good Dental Care, says thousands of Bay Staters will lose their dental insurance.
“As consumer prices rise, we do not need a new law that will increase costs and reduce choice,” Rizoli wrote.
However, the ballot question could encourage more transparency in the insurance market, paving the way for “more deliberate change going forward,” the report says. Dental benefit plans may be required to comply with regular reporting requirements, such as disclosing their loss ratio and operating expenses to the Commissioner of the Massachusetts Division of Insurance.
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The Dental Insurance Regulatory Commission, which supports the ballot question, said Delta Dental paid $382 million in executive bonuses, commissions and fees in 2019 in Massachusetts, while spending $177 million on patient care, according to a state poll guide.
If the ballot question passes, the Massachusetts Legislature can change the lost rate and improve its implementation, possibly setting a gradual path to reach 83%.
“If voters reject this ballot question, the status quo will continue, which means dental insurance companies will maintain their premiums and rates,” the report says. “At the same time, there will be no reporting changes or significant changes to our financial information about dental insurance in Massachusetts.”