CDA-sponsored bill targets low-value dental plans

CDA-sponsored legislation to require dental plans to adhere to the same administrative cost limitations as medical plans took a major step forward April 8. AB 1962 passed the Assembly Health Committee on a 15-3 vote over strong opposition from the dental plan industry.

AB 1962 would remove the dental plan exemption from state law that requires health plans to allocate a minimum of 80 percent of their premium revenue to actual patient care and not to administrative overhead and profit. This requirement is known as a medical loss ratio (MLR), and was included in the federal Affordable Care Act and then reinforced in state law for full-service health plans. Without such a requirement for dental plans, available data indicates that in California the amount of premium revenue allocated to actual care ranges from 38 to 81 percent, although currently, there is no easy way for patients to obtain that information.

“With this vote, AB 1962 is off to a great start in the Legislature,” said CDA President James Stephens, DDS, who testified on the association’s behalf at the hearing. “We knew from the beginning that the dental plan industry would fight this bill tooth and nail, so we are extremely pleased with the solid demonstration of legislative support coming out of the Assembly Health Committee.” 

In his testimony, Stephens emphasized that AB 1962 is an effort to give dental patients the ability to assess the value they are getting for their (or their employers’) dental insurance premiums. He spoke about the significant dental needs of his patients, emphasizing that “exempting dental plans from a standard that medical plans must adhere to trivializes the importance of my patients’ oral health care.” 

Dental plan representatives lined up to testify in opposition to the bill, arguing that the lower premiums paid for dental benefits coupled with fixed administrative costs would make it essentially impossible for them to comply with an MLR requirement. One plan representative suggested that the only way they could meet the requirement would be to increase reimbursement of dentists by 600 percent. 

Stephens responded firmly to the implication that AB 1962 was about money for dentists.

“I spend a great deal of time helping my patients get through year to year with dental benefit plans that often are capped at $1000 per year,” Stephens said. “If they are only getting 40 cents on the dollar for their premiums, they are not getting a fair shake. This bill is about assuring patients have access to benefit plans that provide actual care.” 

Prior to the final vote, committee discussion focused on the importance of transparency of information for patients and questioned the lack of data to support the dental plans’ claims that they could not meet 80 percent medical loss ratio requirement in AB 1962. In response to a direct question from the committee chair, Assemblymember Richard Pan, MD, (D-Sacramento), about whether they could support any standard at all, one plan representative was forced to concede that they were “very willing to work with the author on an equitable solution.” In response, Assemblymember Skinner pledged to continue discussions about how to achieve greater transparency for patients as the bill moves through the process. 

AB 1962 will be heard next in the Assembly Appropriations Committee.