Ballot question would shift profits from insurers to dentists

WHY ARE MASSACHUSETTS dentists and orthodontists spending hundreds of thousands of dollars on a campaign to change the rules governing dental insurance? Evan Horowitz, executive director of the Center for State Policy Analysis at Tufts University, has the answer in a report released Thursday: money.

A November ballot measure – Question 2 – would require dental insurers to spend at least 83 percent of premiums on clinical costs and quality improvements, rather than administrative costs, similar to an existing rule in place for health insurance. The message being promoted by the question’s supporters is that the policy would save consumers money and ensure dental plans are managing money efficiently by reining in administrative spending and requiring that the money raised by dental premiums is actually spent on patient care. But why are dentists and orthodontists campaigning for the question?

Horowitz’s report provides the answer. He says in order for insurers to meet the 83 percent “loss ratio,” they have a few options. They can cut administrative spending, as proponents hope they will. They can lower premiums so they take in less money. But the easiest way for them to meet the new rules is to pay more in dental claims, either by covering more procedures or, more likely, allowing dentists to bill higher prices for their services.

“Usually, when dentists and insurers negotiate, they have opposing interests: Dentists want to raise prices to increase their earnings, while insurers want to limit price increases in order to boost profits,” Horowitz explains in the report. “But the requirement that insurers spend at least 83 percent of their premiums on dental care warps this dynamic. It makes insurers more willing to accept dentists’ push for higher prices, because that would help insurers meet the new loss ratio.”

However, Horowitz says that despite the potential for some additional patient costs, the question is unlikely to have a major effect on patients. It’s possible, though unlikely, that insurers will lower monthly premiums, which could mitigate some of the impact of higher prices. And any increase in cost-sharing is likely to be fairly small for any individual consumer. 

The biggest impact will probably be on insurers, especially smaller insurers that are more likely to struggle to meet the 83 percent standard, since they have many of the same fixed costs as larger insurers (space, computing technology, payment and claims processes, etc.) with fewer customers. Those smaller insurers are most likely to need to revamp their financing – possibly raising premiums and prices – or go out of business. The insurance industry is, unsurprisingly, opposed to the ballot question.

One positive of the ballot question, Horowitz writes, is it would impose new reporting requirements that would make the dental insurance market more transparent and lay the groundwork for better regulation in the future. Today, there is little publicly available information. It is not even clear whether most insurers are close to meeting the proposed 83 percent loss ratio. The only publicly available study on dental insurance finances was commissioned by a dental insurance trade group. (While a similar loss ratio is used for medical insurance, medical insurance is structured differently from dental insurance so it’s not a given that the two should have the same rules.)

Perhaps, Horowitz suggests, if the question fails at the ballot box, the Legislature could take it on itself to impose reporting requirements and get the information it needs to consider whether future regulations would be necessary or helpful. 

SHIRA SCHOENBERG

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FROM AROUND THE WEB

MUNICIPAL MATTERS  

Climate activists blocked traffic in several locations in Boston and were arrested by local and state police. (Boston Herald) Herald columnist Joe Battenfeld calls Mayor Michelle Wu out for not denouncing the traffic-clogging protests – and says she showed support for a similar demonstration three years ago. 

Who speaks for the trees? Soon a new “forestry division” within Boston’s parks department will. (Boston Globe) 

A Holyoke City Councilor expelled from the council for facing child pornography charges sues to keep his council seat. (MassLive)

WASHINGTON/NATIONAL/INTERNATIONAL

Immigrant-rights advocates who filed suit against Florida Gov. Ron DeSantis over the flights of migrants he orchestrated to Martha’s Vineyard are asking for a nationwide injunction to stop him from sending immigrants to any state. (Boston Globe) 

New York Attorney General Letitia James filed a sweeping 220-page lawsuit against former president Donald Trump, his business, and three of his children, alleging “staggering” fraud in the operation of their business. (New York Times) 

The House passes legislation making it harder to overthrow the results of an election. (NPR)

The Fed orders another super-sized increase in interest rates to combat inflation. (NPR)

ELECTIONS

A Globe editorial calls out Democrats for statewide office in Massachusetts for dodging debates. CommonWealth wrote yesterday about Dems’ aversion to debating their Republican opponents. 

Globe columnist Shirley Leung says how to vote on Question 1 comes down to whether you think the tax surcharge might hit you.

Gubernatorial candidate Maura Healey releases her plan for building housing and making rents and mortgages more affordable. (MassLive) 

EDUCATION

Multiple students had complained about an Essex Tech culinary arts teacher who was charged with indecent assault and battery on a student. (Salem News)

A Leominster school committee member suggests leaving the Massachusetts Association of School Committees after MASC shares an NPR story about starting sex education in kindergarten. (Telegram & Gazette)

Weymouth schools struggle to fill open jobs amid a nationwide teacher shortage. (Patriot Ledger)

TRANSPORTATION

Massachusetts will get federal money to expand access to electric vehicle charging stations. (Gloucester Daily Times)

ENERGY/ENVIRONMENT

The Saugus Board of Selectmen votes 3-2 to approve a new 20-year agreement with the operator of an incinerator and ash-only landfill. The deal offers an upfront payment to Saugus and free tipping fees for the entire 20 years. (Daily Item)

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The State Police arrest four climate protesters who tried to chain themselves together and block traffic in Boston. (MassLive)

CRIMINAL JUSTICE/COURTS

Three years after her indictment, the federal case against Newton District Court Judge Shelley Joseph continues to drag on. (Boston Globe)