Massachusetts’ Dental Loss Ratio Rebates: The Full Story

By Mike Adelberg, NADP Executive Director

The first rebates have been issued resulting from Massachusetts’ dental-loss ratio (DLR) percentage law. To provide context, the law was the result of a ballot initiative in November 2022. The law took effect January 1, 2024, and requires commercial dental insurers to spend at least 83% of adjusted premium revenue on patient care and certain quality improvement activities for the year 2025 and beyond. Dental plans that do not meet the threshold must return a portion of premiums to individuals and groups. It’s worth noting that the large majority of plans were fully compliant with the law – averaging a DLR of 85.25%. The carriers owing rebates operate primarily in individual and small markets – a point I will cover later in this blog. 

The rebates are generating a reaction from proponents of the law, with one source calling the law a “landmark win” and a consumer protection. NADP agrees that protecting consumers in dental benefits plans is important. But proponents of the law are missing an important part of the picture: its unintended consequences. By focusing narrowly on rebates, they ignore other facts and risks. The law risks increasing the cost of dental plans, reducing competition, endangering consumer access to dental care, and impacting the carriers’ processes that protect their enrollees. 

That is the other side of the story. 

The Massachusetts dental insurance market is already showing signs of change. A comparison of the number of plans available in Massachusetts in 2022 versus 2026 shows a roughly 20% reduction in plan availability. Fewer operating plans reduce the number of choices available to Massachusetts’ consumers and employers. When a plan is discontinued, consumers will switch to new plans or discontinue coverage. As a result, they may need to switch providers – disrupting long established patient-provider relationships. 

Data from the Massachusetts Division of Insurance reveals that particular market segments are operating on very narrow margins, with some generating losses.  While insurers are expected to deliver value to consumers, they must also maintain financially sustainable operations. If plans cannot operate viably in certain markets, consumers may ultimately face reduced competition and fewer coverage options. 

For distressed carriers to continue offering dental plans in Massachusetts, they have two ways to comply with a DLR percentage mandate. One way is lowering administrative costs; this can include cuts to customer call centers, narrowing provider networks, curbed efforts to combat fraud, delayed technology upgrades, and increased risk of noncompliance with other government requirements. This can negatively impact consumer and provider experience and endanger the overall integrity of the dental benefits system. 

Another way to comply is for dental plans to increase payments to providers.  Greater investment in patient care can be beneficial, but higher claim costs do not disappear; they are ultimately reflected in premiums and cost-sharing paid by employers and consumers.  These changes can upset the balance between affordability and access – both critical components of dental benefit plans. Plans serving small group and individual markets are finding it particularly difficult to meet the statutory DLR threshold because of the inherently higher costs of serving these markets – particularly in regard to fluctuating membership and adverse selection.   

Against this turbulence is the small scope of the rebates. The data released by the state indicates that 2.2 million people were covered by plans regulated under the DLR law at the end of 2025. $8.4 million in rebates divided by 2.2 million means the actual rebate per consumer is insignificant for most.  The cost to determine and implement the rebate will exceed the actual rebates in many cases. A sad irony of the law is that it penalizes administrative costs while creating new administrative costs. 

The long-term effects of Massachusetts’ DLR law are still unfolding.  Dental coverage is a voluntary benefit, and employers and individuals may choose not to purchase higher-priced policies or policies that increase consumer cost sharing. Further market exits will leave consumers scrambling, and remaining plans will have fewer funds to maintain robust customer service and large networks. 

As policymakers evaluate the law’s impact, the success of the DLR law cannot be measured solely by rebate dollars. If some consumers get small rebates, that must be balanced against the consumers who lost their plans, had to switch providers, or now pay more for their dental care. The central question remains whether the law promotes stable, competitive, and affordable dental benefits and preserves access to care for Massachusetts consumers over the long term.