Mike Adelberg

Another Year of MLR Bills in State Houses: The Results

By Mike Adelberg, NADP Executive Director

June 25, 2024

On June 13, the Rhode Island legislature passed “The Dental Loss Ratio Reporting and Study Act.” The bill, now awaiting Governor McKee’s signature, will require dental insurers to report their loss ratios to the state and will require the state’s insurance commissioner to report on loss ratios to the state’s Assembly at the end of 2026. This reasonable bill replaces aggressive lobbying for a Massachusetts-style loss ratio bill that would have arbitrarily set a loss ratio at 85% without any economic analysis or regard for existing dental insurance practices in the state.

Earlier this year, Louisiana and Virginia passed their own loss ratio reporting bills instead of the Massachusetts approach. California’s legislature considered the Massachusetts approach but withdrew the bill when the state’s think-tank determined that it would lead to massive premium increases for California’s consumers. In total, 15 states considered loss ratio bills in the 2024 legislative season. If we assume that the Rhode Island Governor will sign the passed bill, three states enacted reasonable reporting bills. This follows the 2023 legislative season when Colorado and Arizona passed a reasonable loss ratio bills styled on Maine’s 2022 reporting bill and Nevada passed a lower loss ratio based on a long pre-existing regulatory requirement in the state.

When we tally up all the states with dental loss ratio requirements— seven states have reporting requirements, two states (New Mexico and Nevada) have a reasonable required loss ratios based on the prior performance of dental insurers in the state, and one state (Massachusetts) arbitrarily set a number based on the performance of medical plans with 20 times the premiums of dental plans. After consecutive years of consideration in more than a dozen state houses, an emerging consensus of legislators points toward one of two paths:

1.) There is no need for loss ratio legislation in a very competitive dental insurance market that receives solid scores on all major consumer surveys, or

2.) There can be loss ratio reporting that might identify a few outliers in need of correction.

Even the National Conference of Insurance Legislators (NCOIL), the national body of state legislators that initially proposed a Massachusetts-like model bill, evolved toward and adopted a bill styled on Colorado.

There is a good chance that more Massachusetts-style bills will be introduced next year, and legislators again will likely reach one of the two conclusions above. Given the market exits in Massachusetts (eight carriers and counting have left one or more insurance market), the findings of California’s state think tank, the conclusions of NCOIL, and the trend in state houses across the nation, the case for going to the Massachusetts route has never been weaker.

To colleagues who continue to advocate for an arbitrarily selected loss ratio, it is time to consider the totality of evidence and the legislative track record. Dental plans will work with you on reasonable compromise legislation in the same way that the National Association of Dental Plans and the American Dental Association achieved a reasonable compromise with NCOIL. If you have specific concerns about an insurance industry practice, document it, and bring it to us. We will discuss it with an open mind and seek a mutually agreeable outcome.

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