Question 2 on the general election ballot asks whether voters support requiring dental insurance carriers to spend 83% of premiums on patient care, not on administrative expenses, taxes or profits. If carriers spend less than
But it is difficult to gauge whether the loss ratio is pegged at the correct amount, as well as what impact it could have on dentists and patients, according to a report released Thursday by the
“This ballot question is built on relatively thin information,” the report shared with MassLive states. “It’s not clear whether dental insurers are currently close to — or far from — the proposed 83 percent requirement. Indeed, there’s no clear basis for the 83 percent figure, and imposing it would make us the only state with a fixed loss ratio for dental insurance.”
Put differently, the report postures there could either be “some relatively small” or “some potentially more substantial” and dramatic outcomes from the ballot referendum, depending on the validity of scant research to date.
The updated dental insurance provision would take effect in
The report, which does not take a stance for or against the ballot question, notes instituting a dental loss ratio echoes a commonplace standard for medical insurance. In
Hefty medical insurance premiums are also predicated on higher risk calculations, unlike cheaper dental insurance premiums that take into account lower risks and stricter “usage limits.”
“When crafting loss ratios for medical insurance, lawmakers and regulators were guided by copious information about market dynamics and the financial health of insurers,” the report states. “There is no similar information about the current finances of dental insurers in
That study, commissioned by the
In another option, insurers could pay more in dental claims, such as enabling dentists to bill more for their procedures. That, in effect, may give dentists more negotiating leverage as insurers simultaneously strive to meet their new loss ratio requirement.
But it could also make patients pay more for their dental care.
“One reason is that most dental insurance includes fairly high co-insurance rates, where the patient pays a percentage of the total cost,” the report states. “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.”
The report cushions that scenario, though, by predicting price increases “should be limited.” The ballot referendum also “probably won’t trigger the kind of big, premium reductions that could make insurance more affordable,” the report states.
A voter information guide from Secretary of State
“With consumer prices soaring, we don’t need a new regulation that will increase costs and decrease choice,” Rizoli wrote.
Still, the ballot question could spur a more transparent insurance market, paving the way for “more deliberate policy adjustments moving forward,” the report states. Dental benefit plans would need to comply with regular reporting requirements, like disclosing their loss ratio and administrative expenses to the commissioner of the
Should the ballot question pass, the
“If voters reject this ballot question, the status quo will continue, which means dental insurance companies will maintain their current balance of premiums and prices,” the report states. “At the same time, there will be no reporting changes or broad improvement in our knowledge of the underlying finances of dental insurers in Massachusetts.”
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