Dental Plan Lobby Warns Loss Ratios Could Drive Groups To Self-Insure

January 19, 2023

A new report from the lobby representing dental insurers finds that nearly half of group dental plans are self-insured, and thus can avoid state regulations, and the National Association of Dental Plans (NADP) Executive Director Mike Adelberg warns that the trend to self-insure may accelerate if more states follow Massachusetts’ recent move and add a medical loss ratio requirement to dental coverage.

One of NADP’s top priorities for this year is to make sure other states don’t enact dental loss ratios that are based on health plan requirements, but dental providers are on the opposite side of the issue and view Massachusetts’ move as a major win.

Based on data from 91 companies and public information, the association’s 2022 enrollment report shows that about 280 million people, or about 84% of Americans, had dental coverage in 2021, up from 80% of the population in 2020. The increase was driven by enrollment in commercial coverage which grew from about 170 million in 2020 to 187 million in 2021, the report shows, while about 93 million people had public dental benefits in 2021, slightly lower than the about 94 million enrolled in publicly funded insurance the previous year.

Enrollment in Medical Advantage plans that offer dental coverage is now 21.5 million, an increase of 31% from 2020.

NADP also finds that most consumers (87%) are enrolled in dental preferred provider organization (DPPO) products, and that about 70% of group dental benefits are employer-sponsored, while the other 30% are voluntary. About 5.3% of the population with commercial dental benefits has coverage through individual policies and products, the report shows.

A key takeaway from the report, Adelberg says, is the finding that 46% of commercial group dental plans are now self-insured, and thus cannot be regulated by state authorities.

The trend toward self-insurance could grow quickly if more states require dental plans to hit a loss ratio, or to spend a certain percentage of premiums collected on claims and rebate consumers if they fall short, Adelberg points out.

The Affordable Care Act requires medical plans to have an MLR of 80% or 85% depending on the product, but Adelberg says those thresholds cannot be compared to dental plans.

While dental insurers have comparable operational costs (such as claims processing) as health plans, they bring in far less premium revenue, he says.

In November, Massachusetts residents overwhelmingly approved a ballot measure backed by the American Dental Association and other lobbies that set an 83% MLR for dental products starting in 2024.

Dental plans opposed the Massachusetts ballot initiative, and Adelberg argues that the 83% threshold is arbitrary, not actuarially sound, and certain to disrupt the market once it goes into effect.

An NADP-commissioned report by Milliman finds that in Massachusetts, large group dental carriers have an average 79% loss ratio, while individual and small group carriers have loss ratios averaging about 68%, or far below the 83% threshold in the new law.

Implementing the loss ratio is likely to result in higher premiums, more administrative burdens and it could increase consumer cost-sharing, Milliman says. And, as Adelberg warns, a dental loss ratio could spur more plans to self-insure to avoid state laws.

One of NADP’s top priorities in 2023 will be to push back against efforts to enact dental loss ratios based on health plan requirements, Adelberg notes.

The American Dental Association, which spent $5 million on the Massachusetts measure and helped to rally other support, recently called the Massachusetts win a “watershed” moment, and, according to ADA News, the lobby believes that similar bills could be filed in up to 20 state legislatures in 2023.

Lawmakers in Connecticut, Oklahoma and Nevada are already expected to consider dental loss ratio legislation in the coming session, the newsletter reports.

Amy Lotven (


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