The California Dental Association (CDA) is sponsoring a patient protection bill to ensure that a minimum percentage of consumer premiums are actually spent on their dental care instead of insurance company overhead and administration costs.
AB 1962, introduced by Assemblymember Nancy Skinner (D-Berkeley), would provide dental patients with the same minimum loss ratio (MLR) protections that they currently receive with their medical plans -- requiring dental plans to spend a minimum percentage of premium revenues, either 80% or 85%, directly on patient care, according to a press release.
Under California law and the Patient Protection and Affordable Care Act, all medical plans must adhere to an MLR; however, no such standards exist for dental plans, leaving patients without the same assurances that their premiums will give them access to comprehensive dental care.
"Patients and employers need to know that they're getting value out of their premium dollars dedicated to dental care," said CDA President James Stephens, DDS. "This bill provides greater transparency for consumers when purchasing dental plans."
If approved, dental plans that fail to meet the MLR standards would be required to give rebates or lower premiums to dental plan purchasers as medical plans currently do. As a result of the MLR for medical plans, enrollees have seen billions of dollars in benefits through rebates and reduced premiums.
"Thanks to the Affordable Care Act, health insurers have to spend more patient dollars to cover medical care rather than overhead. Dental insurers should do the same," Skinner said. "AB 1962 will ensure dental plans have similar limits on overhead, so more funding is available for dental care."
A report commissioned by CDA indicates that dental plans have varying loss ratios -- some as high as 80.8% to as low as 38.1%. The report also said that during the first year of the mandated MLR for medical plans, consumers were provided $1.2 billion in rebates and premium savings.
"We know on the medical side that the minimum loss ratio produced substantial consumer benefits as well as administrative efficiencies for insurance companies," Dr. Stephens said. "We're confident these same protections can be provided to all patients with dental coverage. In fact, the state's Healthy Families Program required insurance companies to adhere to minimum loss ratios for the dental coverage they offered."
The bill will now go to the Assembly Health Committee for hearings.
