by Massachusetts’ landmark dental medical loss ratio
By Andrew Smith, Chief Executive Officer of the ADSO
In 2022, the Association of Dental Support Organizations (ADSO) proudly supported a historic ballot measure that would reform the insurance system in Massachusetts and move the state toward greater transparency and accountability in dental insurance. An overwhelming majority of the electorate – 71.6% – voted to pass this initiative, which establishes a dental medical loss ratio (MLR) standard.
The new policy mandates that dental insurance providers allocate at least 83 percent of premiums paid by insured patients to actual patient care and quality improvements as opposed to administrative costs and profits. This April, the Massachusetts Division of Insurance (DOI) finalized this directive, laying out a comprehensive framework that not only sets a new precedent in dental healthcare but also champions a patients-first approach to dental care, enhancing oral health outcomes and insurance provider transparency.
The concept of an MLR is straightforward and nothing new. This mechanism has been effectively regulating health insurance when the Affordable Care Act (ACA) began requiring medical insurance providers to spend 80% to 85% of premium dollars on medical care. In fact, Massachusetts sets an even higher standard at 88%, which the Commonwealth enacted as part of its 2006 healthcare reform law (“Romneycare”). Such a standard helps ensure that premium dollars paid by patients cover the cost of their medical care rather than administrative expenses, executive salaries, and insurance company profits. If insurance companies fail to meet these standards, they must refund the excess amount to patients.
Previous MLR laws exempted dental insurance providers from such regulations. But as a growing body of research shows, medical health is closely tied to dental care, with some medical conditions and ailments like pregnancy and birth complications, diabetes, cardiovascular disease, and respiratory infections being linked to poor oral health. It therefore only makes sense to hold dental insurance providers to the same standard as medical insurance providers.
The new MLR standard also significantly improves efficiency and patient care by minimizing waste and ensuring that a substantial portion of premiums directly benefits patients. By aligning dental insurance provider spending with patient care, Massachusetts is fostering an environment where the dental health outcomes and patient experience are prioritized over profits. Moreover, Massachusetts’ pioneering stance on dental MLR not only benefits its residents but also sets a benchmark for other states seeking dental insurance reform. It reflects a collective aspiration for a healthcare system and insurers that truly serves patients.
There is a clear demand for better transparency and efficiency in dental insurance. The overwhelming support for this measure in Massachusetts reflects a public that increasingly wants to see a substantial amount of their premium payments go to how much it actually costs to provide high-quality, patient-focused dental care. With such policies gaining momentum in other states, it is an opportune time for stakeholders across the nation to push for reforms that ensure dental insurers operate with enhanced transparency and accountability, ultimately leading to better health outcomes for all. It is also providing a vital model for other states contemplating similar reforms. As this momentum builds up, our association looks forward to supporting similarly bold initiatives across the country.
