Medical Loss Ratios For California's Dental Insurance Plans: Assessing Consumer Value And Policy Solutions.

As a consumer protection, the Affordable Care Act (ACA) requires that large-group health plans spend at least 85 percent of all premium dollars on health services and quality improvement activities-thus giving the plans a medical loss ratio (MLR) of 85 percent. Small-group and individual plans must have an MLR of at least 80 percent. The ACA did not set minimum MLRs for dental plans. California passed a law in 2014 requiring dental plans to report MLRs but stopped short of setting minimum thresholds. We analyzed dental plans' MLRs reported in California for 2014 and 2015. The average MLR, weighted by covered lives, was 76 percent, with wide variation across product types and sizes. Few products sold by dental plans met the MLR thresholds set by the ACA, but many did meet or exceed other proposed thresholds. While millions of Californians were in large-group plans that achieved high MLRs, millions more were in other plans with relatively low MLRs. A legislatively mandated MLR would provide a standardized financial tool and potentially ensure value for dental insurance products. Given the multiplicity of dental products and the varying numbers of covered lives in those products, setting MLR thresholds poses a challenge for stakeholders.