CHICAGO, April. 14, 2024 — Model legislation officially approved by the National Council of Insurance Legislators (NCOIL) ensures that when enacted by state legislatures, patients with dental insurance will get more value out of their dental plans. The American Dental Association (ADA) fought diligently to achieve this important reform, and the dental insurance industry for the first time conceded that it is appropriate to set what is called a “loss ratio” on dental plans.
A dental loss ratio requires dental insurance companies to disclose the percentage of premium dollars collected that is actually spent on patient care and not on company executives’ salaries or marketing. Under a dental loss ratio (DLR), insurance companies would also be required to refund a part of the premium collected to insured patients if the insurance companies fail to meet the set percentage. Without a dental loss ratio, insurance companies can keep the unspent premiums as profit to be used for marketing, salaries or other company overhead, rather than patient care. Additionally, the provisions in the DLR model legislation will set transparency standards consistent with those established under the Affordable Care Act for major medical insurance plans.
Source: Medical Loss Ratio Model Legislation Helps States Hold Dental Insurers Accountable / ADA.org