Medical Loss Ratio Model Legislation Helps States Hold Dental Insurers Accountable

State legislator group puts final stamp of approval on model legislation

CHICAGO, April. 14, 2024 — Model legislation officially approved by the National Council of Insurance Legislators (NCOIL) ensures that when enacted by state legislatures, patients with dental insurance will get more value out of their dental plans. The American Dental Association (ADA) fought diligently to achieve this important reform, and the dental insurance industry for the first time conceded that it is appropriate to set what is called a “loss ratio” on dental plans.

A dental loss ratio requires dental insurance companies to disclose the percentage of premium dollars collected that is actually spent on patient care and not on company executives’ salaries or marketing. Under a dental loss ratio (DLR), insurance companies would also be required to refund a part of the premium collected to insured patients if the insurance companies fail to meet the set percentage. Without a dental loss ratio, insurance companies can keep the unspent premiums as profit to be used for marketing, salaries or other company overhead, rather than patient care. Additionally, the provisions in the DLR model legislation will set transparency standards consistent with those established under the Affordable Care Act for major medical insurance plans.

“This model legislation is a win for dentistry. It proves the insurance industry agrees that reporting ratios is not enough to guarantee premiums will go towards actual patient care,” said Linda Edgar, D.D.S., president of the American Dental Association (ADA). “It goes beyond reporting because it guarantees enforcement—meaning if a dental plan repeatedly reports loss ratios that are too low, it will have a loss ratio imposed on it by the state. So, one way or another, dental plans will have to provide more value to patients by paying out more for their care.”

Prior to the dental loss ratio model legislation, the ADA has successfully worked with NCOIL on model legislation on four other issues of benefit to patients and dentists: non-covered services, freedom in network leasing, virtual credit cards and prior authorizations. More than 100 laws in states have been passed on these issues as a result of model legislation on these issues combined with state dental society advocacy efforts.

The model legislation provides an agreed-upon starting point for the introduction of state bills across the country, while leaving the door open for states to pursue additional provisions on behalf of patients with dental insurance. It is a tool available for dental societies and other stakeholders to use when introducing legislation on this issue in their states.

“We are already seeing the impact of this model legislation in states that would have been unlikely to even consider this important reform issue in the past,” said Dr. Edgar.

Advocating for new DLR laws around the country is part of the ADA’s overall effort to reform dental insurance so that the plans are truly geared toward providing real value to the patients they cover.

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About the American Dental Association
The not-for-profit ADA is the nation's largest dental association, representing 159,000 dentist members. The premier source of oral health information, the ADA has advocated for the public's health and promoted the art and science of dentistry since 1859. The ADA's state-of-the-art research facilities develop and test dental products and materials that have advanced the practice of dentistry and made the patient experience more positive. The ADA Seal of Acceptance long has been a valuable and respected guide to consumer dental care products. The Journal of the American Dental Association (JADA), published monthly, is the ADA's flagship publication and the best-read scientific journal in dentistry. For more information about the ADA, visit For more information on oral health, including prevention, care and treatment of dental disease, visit the ADA's consumer website