CDA calls for minimum loss ratio for dental plans

The California Dental Association (CDA) is sponsoring legislation to apply patient protections and market reforms -- including a minimum loss ratio on patient premiums -- to dental plans participating in California's Covered California health benefit exchange.

The Patient Protection and Affordable Care Act (ACA) includes many consumer-focused provisions that have already gone into effect, but only apply to medical plans, the CDA noted in a press release. Sacramento Assemblyman Richard Pan, MD (D-Sacramento), who chairs the Assembly Health Committee, has introduced AB 18; if passed by the Legislature and signed by the governor, the bill would represent the first time these federal patient protections would be applied to dental plans participating in the small group market inside and outside the new health benefit exchange created by the ACA.

Dr. Pan is a pediatrician who works in federally qualified health centers.

One of the most critical provisions would be establishing a dental loss ratio (DLR) or a medical loss ratio to dental plans offering products in the exchange. A DLR would require a minimum percentage of a dental plan's gross premium collections to be spent on actual treatment and care.

In other words, the bill limits the amount of premium collections that can be applied to the plan's administration of the benefit (less taxes and fees). If the plan fails to do so, the plan must reimburse each policyholder. The proposed DLR percentage is still being determined in consultation with legislative analysts, Covered California, and the department of managed health care.

AB 18 was originally introduced at the request of CDA and other dental stakeholders to make critical and time sensitive corrections to current state law surrounding implementation of the ACA.

The bill also includes provider network adequacy requirements, timely access to care standards, prohibition on annual and lifetime caps on services, and premium rate review by regulators.