Discussions around medical loss ratios for dental insurers have picked up since Massachusetts pioneered this initiative last year.
Massachusetts established a first-of-its-kind law last year that requires dental insurers to spend at least 83 percent of premium dollars on dental services or refund the difference to patients, among other requirements. Following the law's passage, Guardian stated it would no longer sell policies to companies with fewer than 25 employees once the medical loss ratio is implemented in January.
The ADA said it would work to support similar measures in other states. Since the Massachusetts law, similar bills have been introduced in several other states. Nevada also passed its own in June.
A December 2022 ADA poll found that 83 percent of dentists supported medical loss ratios being added in their states. Forty-two percent also indicated they were likely to or were already participating in a grassroots effort to establish medical loss ratios for dental plans in their state. Mouhab Rizkallah, DDS, who spearheaded the Massachusetts ballot initiative, also said he plans to push for a dental-focused medical loss ratio at the federal level.
Two dentists recently spoke with Becker's to discuss their opposition or support for a federal medical loss ratio.
Editor's note: Responses were lightly edited for length and clarity.
Question: Would you support a federal medical loss ratio for dental insurers?
Benjamin Joy, DDS. Joy Dental Pines (Pembroke Pines, Fla.): No. Medical loss ratios are essentially a price control. The best case scenario is that the feds get it right and a team of bureaucrats reproduces what would have naturally occurred if free markets were allowed to establish prices. This rarely happens and would still be inferior to the free markets, as there is added costs to run the bureaucracy.
Insurance companies should be allowed to run their own businesses as there's no one more qualified in the universe to run them. Governments ought to get out of the way so that we (the people, the ones who purchase insurance products) can tell the insurance companies what prices we're willing to pay. How they spend our dollars should be up to them and their shareholders. If they squander them in administration my bet is investors will find better, more efficient investments.
The consequence of getting the price wrong is that there will be either a surplus of unnecessary insurance companies around (subsidized by a mandated minimum price that is not justified by free markets) or, more likely, a dearth of insurance products (as many insurance companies cease to exist due to mandated prices that are too low).
The next logical step would be for the government to ration the limited supply of insurance products when the ample options were destroyed by their low price requirements. It's either that or there will be many grifting insurance companies that are subsidized unnecessarily by your tax dollars. (I prefer this option if we have to have price controls.)
As to how price controls affect the dental industry, it depends on how the controlled price relates to the free market price. There will either be artificial demand by subsidized visits to the dentist or (more likely) there will be softer demand as fewer people have access to insurance products or those insurance products offer reimbursements that are too low to sustain the overhead of a dental office.
The latter scenario will create a dichotomy of purely expensive concierge dentistry (fee for service only) and public health subsidized clinics (inexpensive but long waitlists and generally lower quality) where the middle ground (PPO practices) are made economically unviable.
I suspect most dentists would opt to drop participation in insurance acceptance altogether, and this would put downward pressure on the fees the concierge dentist could charge but would also render the medical loss ratio moot, as few providers would accept the insurance product anyway.
Clark Stanford, DDS, PhD. Dean and Professor at the University of Iowa College of Dentistry (Iowa City): A medical loss ratio adjusts incentives for the industry and encourages novel access to care experiential models, allowing piloting of various means to integrate oral health into primary care settings.