Will Question 2 improve dental insurance coverage or just raise costs? There are no easy answers.

Nationwide, 45.1 percent of dental care costs are paid out of pocket.OZAN KOSE/AFP via Getty Images/file

There are some facts that aren’t in dispute.

Nationwide, 45.1 percent of dental care costs are paid out of pocket — the largest share of any health care service.

In 2015, state agencies reported that more than a quarter of adults in Massachusetts lacked dental insurance, and in 2021, 19.2 percent of residents reported an unmet need in their family for dental care due to cost.

But will a dental insurance question on the ballot in November improve coverage? Or, as opponents claim, will it mainly raise costs? That’s the confusing part. Here are a few answers.

How we got here

The Affordable Care Act created benefit requirements for health plans and established a framework to hold insurers accountable for quality and spending. Pediatric dentistry was included as an “essential health benefit,” and insurers were required to establish annual caps on what percentage patients could be asked to pay out of pocket for certain procedures for pediatric dental benefits.

But unlike medical benefits, which under the ACA must include free annual physicals and other preventive care, adult dental insurance comes with no such requirements.

Under state law, medical insurers in Massachusetts must also spend 88 percent of the premiums they collect on patient care, also known as the medical loss ratio. No such conditions exist for dental insurers.

As a result, most agree, dental insurance comes with more limited benefits.

Dr. Andrew Tonelli, a dentist practicing in North Reading who is cochair of the government affairs committee for the Massachusetts Dental Society, said that when it works well, especially when subsidized by an employer, dental insurance can help patients access care. But some insurers, he said, impose annual maximums on how much dental insurance will pay toward care, and the caps have remained relatively unchanged for decades, despite inflation. Many plans also come with high cost-sharing — the percentage of a procedure’s price tag that patients must pay out of pocket, Tonelli said.

The dentist then has to figure out what insurance will actually pay for and communicate that to the patient, said Tonelli, who is also serving as spokesman for Massachusetts Dental Care Providers for Better Dental Benefits, a group behind the ballot question.

“We have way more people thinking about dental insurance than we have doing dentistry,” he said.

How could the ballot measure help?

The ballot question would establish what Tonelli said are consumer protections around dental insurance. Similar to medical loss ratio laws for medical insurance, the ballot would require dental insurers to spend 83 percent of the premium they collect on claims. According to data from 2019 and 2021 from a study commissioned by the National Association of Dental Plans, the largest three Massachusetts insurers spend approximately 76 percent of their premiums on dental claims.(Data from 2020 was not included in the study.)

The ballot question dictates that if insurers didn’t spend enough to meet the threshold, they would have to return the money to Massachusetts consumers in the form of rebates.

Tonelli pointed to 2020, when most dentists closed their offices for three months for all except emergency procedures due to COVID. Yet people continued to pay their premiums. Unlike medical insurers, who were required to refund most of the unused money back to consumers, dental insurers had no such obligation.

Delta Dental of Massachusetts, the state’s largest dental carrier by membership, said it voluntarily returned $24 million to customers in rebates in 2020. It was unclear what percentage of the premiums it collected that represented.

According to Tonelli, a requirement to meet certain payouts would incentivize insurers to make their benefits packages richer.

The ballot measure would also expand the Division of Insurance’s review of the premiums dental insurers charge, to help prevent insurers from raising premiums egregiously to make up for the new spending requirements.

“People have an underlying sense that things aren’t getting better,” Tonelli said. “But here is one tool. If patients and voters vote for yes, we might be able to improve the system.”

What do opponents say?

David Shore, a board member for the Massachusetts Association of Health Underwriters, said that if the ballot measure passes, insurers would still have largely the same administrative costs they did before, but now would only be allowed to use 17 percent of the premium they collect to pay for it. As a result, insurers would likely raise their premiums, covering their costs by collecting a smaller percentage of a larger dollar amount.

While medical insurers are held to the type of thresholds included in the ballot question, their premiums are approximately 19 times higher than dental premiums on average, according to Shore.

Shore said insurers could do other things to meet the new requirements, such as reducing administrative costs, paying dentists more per service, or reducing out-of-pocket costs for patients by enriching their coverage. But regardless, “premiums will have to go up,” Shore said, since the insurer’s budget is a percentage of the premium, he said.

Tufts University’s Center for State Policy Analysis, which issued a report on the ballot question, didn’t suggest that premiums would increase, but said that the amounts insurers pay to dentists might rise, though ”the scale of these increases should be limited,” the report said.

Backers of the ballot measure point out that insurers would have to seek approval for premium increases under the Division of Insurance, which could prevent them from rising excessively. In the study commissioned by the National Association of Dental Plans, researchers concede that increasing premiums to comply could be particularly difficult, given the DOI’s ability to reject the increases.

In a market where premium increases are necessary but difficult to get approved , the Committee to Protect Access to Quality Dental Care, a group opposing the ballot, said it is likely that the market will consolidate, or that some carriers will leave Massachusetts.

“Carriers that remain will likely reassess their ability to maintain lower-cost plans that serve more vulnerable populations, resulting in reduced consumer choice,” the committee said in a statement.

To what extent premiums might rise even with the state’s oversight is unclear. The division said it works behind the scenes to negotiate rates for medical insurance, often landing on increases below what companies submit. Public rejection of the rates is rare.

Only a subset of the state’s insurance market would have to adhere to the new measure if it passes. That’s because a significant share of the market is made up of large employers that pay the health claims of their employees directly. Those ”self-insured” employers are not bound by state insurance laws. However, Shore said the ballot question could inflate the cost of dental care for everyone. If insurers pay dentists more per service to meet the requirements of a new law, that could trickle into higher premiums for the entire market.

Consumer advocacy group Health Care For All didn’t take a position on the ballot question, but was also skeptical of some of its benefits.

“Dental benefit plans should have more financial transparency and accountability, however, the ballot initiative is not likely to improve consumers’ access to oral health care,” the organization said in a statement.

What else can be done to improve dental coverage?

Shore said that creating quality measures, and incentivizing care that measurably improves people’s oral health, would help improve dental coverage. For example, insurers could redesign how dentists get paid to reward them for spending money on things like preventative care or more personalized care.

Chad Olson, director of state government affairs at the American Dental Association, said the national organization is working on a number of reforms to dental insurance beyond medical loss ratios, including instituting minimal coverage requirements for insurance. But the ballot question in Massachusetts throws a spotlight onto an area that, if successful, would become a model nationally.

“A lot of eyes are focused on Massachusetts,” he said.