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Employers and their benefits professionals should pay close attention to states' efforts to set minimum dental loss ratios, according to Sam Melamed.
Melamed, the chief executive officer of NCD Agency, a Dallas-based dental plan manager and distributor, talked about state minimum dental loss ratio efforts this week in an interview.
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Employers and advisors typically see dental insurance as a popular product that just seems to work. They set up a plan, shop for a new plan if the price rises too much and focus their attention on the calamity of the week in group health.
Melamed said employers and advisors now need to wake up and look to see what their states are doing about dental loss ratios, or the percentage of dental insurance premiums that dental plans spend on care.
Regulation of the loss ratios might be reasonable, but any standards based on the major medical market are likely to be a poor fit, Melamed said.
Employer premiums average about $700 per month for single coverage for major medical coverage and only about $30 per month per person for dental coverage.
If a state tries to hold marketing and administrative cost ratios for dental coverage to what they are for major medical coverage, "there's just not enough premium dollars," Melamed said.
The backdrop: The American Dental Association has supported minimum dental loss ratio efforts for years. In 2022, Massachusetts voters approved a referendum that set an 83% minimum dental loss ratio in their state. The state implemented the requirement last year.
The 83% minimum loss ratio was too high for the market. Many insurers responded by leaving the state's individual dental market, and some left the state's small-group market or imposed big premium increases.
Related: Top 5 states with the best dental health
Now, many states are considering minimum dental loss ratio proposals of their own. Many are based on a model bill developed by the National Council of Insurance Legislators. The NCOIL model calls for states to track dental loss ratios and talk to carriers with unusually low loss ratios, rather than locking in a specific minimum loss ratio.
The National Association of Dental Plans has posted an issue brief that includes a state-by-state snapshot of state dental loss ratio requirements and policymaking efforts.
The implications: Dentists are facing economic pressures of their own and deserve fair compensation, but anything that leads to employers losing access to dental coverage is terrible for the employees' oral health, Melamed said. "A lot of people don't go to the dentist unless they have dental insurance."
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
