What to know about the proposed dental insurance rules

Politics

The question pits dentists against insurers.

Erin Clark / The Boston Globe, File

Voters in Massachusetts are being offered the chance this election to decide if dental insurance companies should spend a certain percentage of their monthly premiums on patient care, similar to rules already set up for medical insurance. 

If approved, ballot Question 2 would make Massachusetts the first state to introduce a uniform rule for a “medical loss ratio” for dental insurance. It would also introduce other new rules for dental insurers in the state, including expanded financial reporting. 

The question has largely pitted dentists against insurers. 

Supporters of the question say the changes will mean patients will pay less and get more at the dentist office. Meanwhile, opponents say approval of the question will mean increased costs for patients and employers. 

What would Question 2 do?

The biggest element of Question 2 is that it would establish a “medical loss ratio” — the amount of premium dollars a dental insurer must spend on patient expenses and care improvement instead of administrative expenses — of 83 percent. That means that dental insurers would be required to direct 83 cents of every dollar collected in premiums toward patients’ care. The remaining 17 cents of every dollar could be directed toward administrative costs.

As it stands, there is no minimum threshold for how much of premiums dental insurers must direct toward patient care.

Loss ratios are already used for health insurance, with insurers required under the Affordable Care Act to spend at least 80 percent or 85 percent of premium dollars on medical care. In Massachusetts, medical insurers must spend either 85 or 88 percent of their monthly premiums on care. 

Question 2 would require dental insurers who fail to meet the 83 percent to issue rebates to patients, refunding the excess premiums. 

Self-funded dental insurers, essentially employers that manage their own insurance pool and are paying an insurance company as a third-party administrator, would be exempted from the required 83 percent loss ratio.

The other significant component of the ballot question is that it would require dental insurers to submit information about their “current and projected medical loss ratio, administrative expenses, and other financial information” to the state each year.  

If Question 2 passes, the measures it contains would go into effect in 2024.

What does the ‘Yes on 2’ campaign say?

Mouhab Rizkallah, a Somerville dentist who originated the ballot question, told Boston.com that Question 2 “redirects the enormous waste and misappropriation of patient premium funds back to patients.” 

He argued that what he called “surplus funds” will be directed back to patients as lower copays, lower premiums, and premium refunds.

“If this law passes, insured patients will pay less and get more at the dentist,” he wrote. 

Rizkallah accused dental insurers of attempting to “trick the public via voter fear” with their argument that the measure could result in increased costs for patients. (The “no” campaign says that the question has been compiled without any expert review of what the consequences will be.)

The orthodontist called the creation of the 83 percent loss ratio an “immediate conservative fix” to stop the “massive misappropriation of funds.”

“The robust data reporting requirement in Question 2 will allow us to carefully uptick that 83% figure over time,” he said. “So Question 2 is really a conservative stop-gap measure (83%) with a self-calibration mechanism that will move that figure up over time.”

What does the ‘No on 2’ campaign say?

Kyle Sullivan, a spokesperson for The Committee to Protect Access to Quality Dental Care, said that if Question 2 is approved, it will result in increased costs for both Massachusetts families and employers without improving the quality of care, and potentially result in “denying thousands of residents access to much needed dental care.”

“With consumer prices soaring to all-time highs, the Commonwealth doesn’t need this added regulation that will only increase costs and decrease choice for patients across the state,” he wrote to Boston.com. 

Sullivan argued that to meet the required loss ratio, premiums could increase by 38 percent, a bump in cost that was projected in a study funded and commissioned by the National Association of Dental Plans. (Rizkallah called it a “fake study” relying on “fake data.”)

The “No on 2” campaign also says a survey of Massachusetts residents and businesses that it funded and commissioned found that if those increases occur, “about half” of individuals with dental insurance said they would drop coverage, while 90 percent of businesses said they would also likely make changes to their coverage. 

“The proponent placed this question on the ballot without any expert review or study of what the consequences of this question will be for consumers,” Sullivan said. “That is of particular concern since there is no law like this ballot question anywhere else in the country — on the state or federal level. The proponent is avoiding the scrutiny that a proposal like this would normally get through the legislative process — where there would be public hearings, expert testimony, and thoughtful deliberation before such a proposal would move forward.”

What do experts say?

Evan Horowitz, executive director of the Center for State Policy Analysis at Tufts University, did an analysis of Question 2. 

Overall, he found the ballot question is built on thin information, since it’s not known in Massachusetts whether dental insurers are close to — or far away from — the proposed 83 percent loss radio. 

“This did not come out of a rigorous set of studies or a deep analysis of the dental insurance world,” he said. “Nobody’s done that, and partly we haven’t done that because that information just doesn’t exist. And that’s an issue.” 

He also said there is no clear basis for the selection of the 83 percent number. 

“We don’t really know if they’re already meeting it,” he said. 

Based on the information that is available, Horowitz said he thinks dental insurers likely are below the 83 percent standard but they probably could adapt to it. It’s just hard to say exactly how dramatic their restructuring would be since it’s unclear where their loss ratios stand without the requirement.

“Basically if you’re taking in more than you’re paying out, and you need to change that, you have two choices, you can take in less or you can pay off more,” Horowitz said. “Those are the two really basic choices: take in less or pay off more.”

He said it is much more likely that dental insurers will pay out more, by covering a wider range of procedures or allowing dentists to charge higher prices for services, to meet the loss ratio requirement. 

“This is a bargaining arrangement,” he said. “What [insurers] pay to dentists is determined by negotiations between insurers and dental groups. The dentists want more money and … if this law passes then suddenly the insurers kind of do want to pay them more because they have to. It will help them comply with the law. So that’s a very easy negotiation, right? The dentists want more, and the insurers need to increase their loss ratio.”

Some price increases then could be passed on to patients, Horowitz said. In his report, he noted that is because most dental insurance includes “fairly high co-insurance rates, where the patient pays a percentage of the total cost.” 

“Another is that with higher prices more patients will hit their annual maximum — and need to pay for any additional care with their own money,” his report reads. 

But overall, Horowitz said Question 2 is unlikely to have any major effect on costs for patients. 

“I don’t think you should expect major changes from this ballot question,” he said. “It is not the kind of ballot question that will transform dental care as we know it. It’s not going to drive dental insurers out of state, it’s not going to dramatically change the price of premiums, it’s not going to make care more affordable. It may make the price that you pay at the dentist a little bit higher, but maybe not even a noticeable amount. Not that much.”

If things change a little bit, he said it’s not the kind of increase that will affect people’s pockets in a “meaningful way.”

“I don’t know that that should be a top of mind concern for voters,” he said.

Part of the reason why he said he doesn’t expect the question will make any big difference in the experience of people’s dental care is that was never really what the measure was about. 

“This is more of an internal struggle between regulators, dentists, and insurance companies about the best way to distribute profits in dental insurance,” he said. “There are profits in the world of dental insurance. The insurers right now make a bigger share of the profits than the dentists necessarily like, or that the regulators are comfortable with, and this is a way to rethink how those profits should be split up.”

Horowitz said his assessment is that the positions on both sides of the question are “overstated.”

If the transition for dental insurers to the 83 percent standard is relatively manageable, which could be the case, it’s unlikely that patients will see rebates, he found. And, if they do, they’d likely be small.

“The claim from the ‘no’ side that premiums are likely to go up dramatically and prices dramatically comes from an edge case,” Horowitz said. “There is an edge case where if you’re a very inefficient insurer, you may have to do that. But then, I think what really happens is those people just get out competed by bigger insurers who are closer to 83 percent loss ratio. So actually, if you get out competed, it doesn’t affect anybody. Patients just find new insurers.”

The policy researcher also noted that in Massachusetts, a large part of the dental insurance market is self-funded and would not be subject to the loss ratio requirement, meaning they could serve as an “escape hatch, scaling up to help organizations that need an alternative approach to dental insurance.” 

They would, however, be subject to reporting requirements. 

Those regulations contained in the ballot question would provide both regulators and the public with more information about the finances of the dental insurance market, Horowitz said, creating more transparency for any policy changes going forward. 

“That would make a big difference in our understanding of the dental insurance market and for future laws around solving problems for patients and participants,” he said.

Who has funded — or endorsed — the campaigns?

A range of provider-focused associations have endorsed the ballot measure, including the American Dental Association, Massachusetts Association of Orthodontists, Massachusetts Dental Society, Massachusetts Nurses Association, American Academy of Pediatric Dentistry, and the Academy of General Dentistry. 

But Rizkallah has been the primary driver behind the ballot question, the Boston Globe reports. 

“This all started about a decade ago,” the orthodontist told WBUR. “I made a personal, and perhaps even spiritual, decision that I was going to solve the dental insurance problem.”

According to the Globe, the result has largely been “a one-on-one slugfest” between Rizkallah and Delta Dental. 

The orthodontist has sued MassHealth, the state’s Medicaid program, several times, alleging it did not provide adequate orthodontic coverage to kids in low-income families. Last year, Massachusetts Attorney General Maura Healey sued Rizkallah, accusing him of overbilling MassHealth and keeping kids in braces for “longer than medically necessary.”

According to the Globe and WBUR, Rizkallah claims the lawsuit is retaliation for his advocacy. 

It remains unresolved, according to the Globe.

The orthodontist reportedly bankrolled the ballot question from the start, shelling out $500,000 last year to hire signature gatherers in order to get the question on the ballot. 

Since then, he’s donated more than $1.7 million to the campaign, according to the funding tracker maintained by the Globe. The “yes” campaign as a whole has received more than $7.9 million in support. 

Among the “no” campaign’s biggest backers is Delta Dental (more than $4.5 million), according to the Globe.

The “no” campaign as a whole has received more than $5.3 million in support.



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