ADEA State Update

Governor of California Signs Bill to Protect Patient Premiums

(State Policy, Insurance) Permanent link   All Posts

On September 25, Gov. Jerry Brown (D-CA) signed AB 1962 into law. AB 1962, authored by Assembly Member Nancy Skinner (D-CA), establishes standardized requirements for dental plans to disclose how they spend patient premium dollars and puts the state on a path to establish a minimum percentage of premium dollars that must be spent on patient care.

Under current state law and the federal Affordable Care Act, all medical plans must spend at least 80% of patient premiums directly on patient care as opposed to insurance company profits and overhead, a standard known as a medical loss ratio (MLR). However, no minimum standard exists for dental plans.

“AB 1962 lets consumers know how their premiums for dental insurance are spent,” said Assembly Member Skinner. “With health care costs continuing to rise, consumers deserve all the information they can get.”

According to the California Dental Association, 15 million Californians are enrolled in private dental plans.

Under the new law, all California dental plans will have to report the necessary financial data to the state Department of Managed Health Care and Department of Insurance by September 30, 2015, and by September 30 of each subsequent year.

In addition, the new law declares the intent of the Legislature that the data reported be considered by the Legislature in adopting a MLR standard for health care service plans and specialized health insurance policies that cover dental services that would take effect no later than January 1, 2018.

Duggan Dental