Requires carriers offering dental benefit plans to annually submit information which includes the current and projected medical loss ratio for claims for their plans. The medical loss ratio would be eighty-five percent (85%).
The passage of S2175 will likely affect various stakeholders within the dental insurance industry. Carriers that do not meet the 85% threshold will be required to issue refunds to policyholders, effectively returning excess premiums if the medical loss ratio falls short. This measure is intended to enhance consumer protection by ensuring that insured individuals receive fair value for their premiums without excessive administrative overhead. By holding insurers accountable, the bill seeks to promote quality dental care accessibility for Rhode Island residents.
Senate Bill 2175, titled 'The Rhode Island Fair Share for Dental Care Act,' aims to enhance transparency and financial accountability in dental insurance plans. Under this legislation, dental benefit providers will be required to submit annual reports detailing their medical loss ratios, which is a measure of the percentage of premium revenue spent on patient care versus administrative costs. The bill stipulates a minimum medical loss ratio of 85%, ensuring that a significant portion of premiums contributes directly to patient care.
Despite the positive intentions of S2175, there are concerns regarding its potential impact on insurance providers' operational flexibility. Stakeholders have raised questions about how the imposition of a strict medical loss ratio might affect smaller insurers or non-profit dental service corporations, which could struggle to meet these financial requirements. Critics argue that the bill may inadvertently lead to increased premiums or a reduction in available plans due to heightened regulatory burdens.
The act is set to take effect on January 1, 2025, marking a significant shift in how dental benefits are managed and reported in Rhode Island. With the endorsement from several senators and advocacy groups focusing on healthcare fairness, the bill is positioned to reshape the landscape of dental insurance by fostering greater accountability and consumer confidence in the insurance market.