02/20/2014

CDA-sponsored bill requires insurance premium dollars to go toward care


The California Dental Association is sponsoring a patient protection bill introduced by Assemblymember Nancy Skinner, (D-Berkeley), to ensure that a minimum percentage of consumer premiums are actually spent on their dental care instead of insurance company overhead and administration costs.

If enacted, AB 1962 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 percent or 85 percent, directly on patient care.

Under state law and the 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 premium dollars 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.”

Under the bill, dental plans that fail to meet the MLR standards would be required to provide rebates or lower premiums to dental plan purchasers as medical plans currently do. As a result of the MLR for medical plans, enrollees have already 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,” said Skinner. “AB 1962 will ensure dental plans have similar limits on overhead, so more funding is available for dental care.”

A report commissioned by CDA, “Dental Loss Ratio: Factors to Consider in Establishing a Minimum Loss Ratio for Dental Insurance in California,” indicates dental plans have varying loss ratios — some as high as 80.8 percent to as low as 38.1 percent. The report also states 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,” said Stephens. “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.”

In addition to Assemblymember Skinner who introduced AB 1962, the bill is co-authored by Assemblymembers Susan Bonilla (D – Concord); Rob Bonta (D – Alameda); Chris Holden (D – Pasadena); Richard Pan (D – Sacramento); Raul Bocanegra (D – Pacoima); Marie Waldron (R – Escondido); Brian Nestande (R – Palm Desert); Shirley Weber (D – San Diego); Sen. Tom Berryhill (R – Modesto); and Sen. Holly Mitchell (D – Los Angeles).

The bill will be assigned to the Assembly Health Committee for a future hearing.