House Health & Social Services, 4/21/26, 3:15pm

This meeting of the House Health and Social Services Committee will now come to order. It is 3:19 PM, Tuesday, April 7th, 2026, in Davis 106. Members present are Representatives Schwanke, Ruffridge, Mears, Gray, Fields, and myself, Representative Mena, Chair. Let the record reflect that we have a quorum to conduct business. Please take this time to silence your cell phones for the duration of the meeting.

Staffing the committee today, we have Andrew Gianotti as our Health and Social Services Recording Secretary, Kyla Tuppo as our LIO moderator and Katie Giorgio, my committee aide. If you need anything during the meeting, please don't hesitate to get her attention. We have one item on the agenda today, House Bill 273 by Representative Ruffridge on dental insurance and direct care agreements. This is the initial hearing on House Bill 273, and before we begin, I want to note that Representative Eichide joined us at 3:19 PM. I would now like to invite Representative Ruffridge and his staff, Mr.

Bud Sexton, to the presenter's table to begin your bill introduction.

Well, thank you, Madam Chair. I'm Representative Justin Ruffridge from House District 7, for the record, and appreciate the opportunity to present House Bill 273 to you today. And I will let my chief of staff, Mr. Sexton, introduce himself and begin our presentation. Thank you. Bud Sexton, for the record, staff to Representative Ruffridge.

And we want to be able to share with you about House Bill 273. And Madam Chair, if you would like us to do the presentation first or go through a sectional first? Uh, let's do the presentation first. All right, very good. So House Bill 273 has two different components, one being a direct healthcare agreement and adding dental care services to those current statutes.

And Part 2 is a dental loss ratio. And so we'll explain a little bit more about each of those through this presentation. But the overall goal of House Bill 273 is really about transparency and accountability. And when we look at Alaskans, what they're really looking for, whether it's dental or any other service, it's about more value. So very generally, you know, with the reason for dental care coverage and for this bill, statistics show that prevention is very key to avoiding a large number of different diseases in the oral, the mouth areas.

And so dental coverage is definitely a key indicator and key reason why people will seek dental care. We know that current dental plans have limited oversight And so what we're looking to do with this bill is provide some, some more oversight to that process.

With typical dental insurance plans, we know that patients are actually not the customers. In fact, employers are the customers for most dental insurance plans. And so when we're talking about direct healthcare agreements, that will look to change that. And so for patients to determine— I mean, I think if I took a a poll here of everyone in the room and asked everyone, do you really know what your dental care insurance covers? It may be one or two perhaps out of this whole room might actually know what your dental plan actually covers.

Usually for the rest of us, it is about once you have the services performed, and then when you get your bill, that's actually kind of when you find out what you actually owe. So in 2024, Senator Wilson carried Senate Bill 45, and that actually passed into statutes, and that instituted and put into place direct healthcare agreements. And they put that in place for the medical side. And so what this bill, HB 273, does is it adds dental care services to those existing statutes. And what a direct healthcare agreement is, it's a contractual agreement between the provider and the patient.

It's a direct agreement. And so typically it's a monthly fee that, uh, will be exchanged between the patient and the provider, and there's a very specific amount of services that are agreed upon. Um, it's very clear what they're going to receive for their money and what they're going to pay for any additional services. So it's a very clear and transparent process. And so there's no third-party middleman under a direct healthcare agreement to help jack up the rates and take part of the profits out of it.

Many states for the dental loss ratio portion of this bill, many states have actually enacted dental loss ratio legislation. Some of those states, as you see up there, have actually instituted certain percentages of what the dental loss ratio would be. And in a nutshell, what is a dental loss ratio? So if you pay $100 in premiums and let's say the benefits you receive are $55 out of that, then your dental loss ratio would be 55%. So HB 273 does not actually put into statute any certain percentage.

Our goal with this is to put a framework in place where the Division of Insurance then would be able to get data from all the different dental plan insurers and determine really what would be a fair and equitable dental loss ratio number.

So they'll take into account lots of different statistics, a number of enrollees, deductible amounts, cost sharing, coverage limits, many different things, and they're gonna— and then would create a database that would be available to the public So the public could see comparisons of different dental insurers and be able to make their own determination, perhaps based on what those numbers are, what is the correct dental insurance plan for them. And then the dental loss ratio reports would be filed with the legislature and highlighting year-to-year changes, so it's really easy for everyone to see.

As mentioned, the Division of Insurance would calculate the bid-to-loss ratio and determine if it falls under a specific range and also any steps the insurer would be able to take to be able to make changes to that. And again, very quick summary is that two components to HB 273. The direct healthcare agreements already exist and this adds dental insurance to that statute and then setting up a framework for dental loss ratio to be able to have a transparent process for the patients to be able to look very clearly at the benefits versus the dollar amounts being paid.

Thank you, Mr. Sexton. If we could also have you go over the sectional analysis.

Thank you, Madam Chair. Again, for the record, Bud Sexton. So Sections 1 through 6, it's very easily that, as I mentioned, dental care services are being added to direct health care agreement sections. So in Sections 1 through 6, that is what happens. Beginning in Section 7 is the dental loss ratio report, and subsection D talks about the director will make the report public, as I mentioned, and the director will file a report with the legislature in subsection E. And then in F— and then in subsection F, it defines the percentage of premium dollars spent on patient care is calculated, and then the plan is defined.

Next page instructs the director on how to calculate the data, and it goes into— the bill goes into some of the different facts and figures that will be provided in there. Subsection B instructs the director to determine how a dental healthcare service plan is considered as an outlier. So they will take, again, when they look at the dental loss ratio, And they'll basically figure out where that average is, and then they'll make determinations if one is dramatically different than the rest.

Subsection C states when the director shall investigate an insurance based on the deviation from the averages. And in Subsection D, what steps the director can take or shall take if an insurer remains an outlier after 2 consecutive years. Subsection E lets the director take up— may take for an insurer who is subject to remediation. And then lastly, the director may adopt regulations to identify insurers that increase rates more than the latest Dental Services Consumer Price Index. Madam Chair.

Thank you, Mr. Sexton. I think at this point I will see if there are any questions before we turn into our invited modifiers. Do we have any preliminary questions from the committee? Oh, Representative Fields, um, through the chair, Representative Ruffridge, is this your favorite bill of the session? Oh, uh, thank you, uh, through the chair, Representative Fields, all the bills are my favorite bills.

Great answer. I have a question, Representative Gray. Thank you, through the chair, I just want to make sure that I understand dental loss ratio, so I'm going to express how I understand it and you can tell me if I'm wrong. If someone pays $100 a month for dental insurance and never uses it, would that be 0% dental loss ratio? Through the Chair, staff— Bud Sexton, staff representative, Rockbridge.

We know that there is a lot of patients who use it when we're talking about just not an individual. So it's not on an individual basis. Basis. It's more on a complete insurer basis. And so it would take all of the statistics into consideration.

Thank you. Follow-up? Follow-up. I will rephrase the question. If the state of Alaska, all the people who had dental insurance paid their premiums every month, but no one in Alaska ever used it, would that be a 0% dental loss ratio?

Through the chair, Representative Ruffridge, uh, to Representative Gray, yes. Thank you. Any other questions? All right, seeing none, we will turn over to our invited testifiers. First, we have Dr. Heather Willis, dentist and the governor— governmental affairs chair of the Alaska Dental Society.

Please, Dr. Willis, put yourself on the record and begin your testimony.

[Speaker:DR_WILLIS] Thank you, Madam Chair. For the record, my name is Dr. Heather Willis. I am a dentist in Fairbanks, and I am testifying on behalf of the Alaska Dental Society in strong support of House Bill 273. House Bill 273 addresses two important issues affecting dental care access and transparency for Alaskans. The bill clarifies that dental or direct healthcare agreements may include dental services, allowing dentists to enter into direct care arrangements with patients in exchange for a periodic fee.

Importantly, this concept is not new to Alaska statute, as Mr. Sexton had previously said. Provisions authorizing direct healthcare agreements already exist in current state law. Senate Bill 273 simply expands that existing statutory framework to explicitly include dental services. This expansion will allow more patients, particularly those without traditional dental insurance, to access predictable, affordable care. The bill also maintains appropriate consumer protections by clearly defining these agreements and requiring transparency regarding services and costs.

Second, House Bill 273 introduces dental loss ratio reporting requirements for dental insurance plans in Alaska. Similar to the medical loss ratio standards implemented under federal law for health insurance, this provision increases transparency by requiring insurers to report a percentage of premium dollars spent on patient care. Unlike medical insurance, dental plans often operate with annual coverage limits and lower reimbursement structures, while administrative cost and profit margins remain largely opaque. The reporting provisions in House Bill 273 will provide regulators, policymakers, and the public with meaningful data and equip the Division of Insurance with tools to identify outliers and address potential imbalances. By providing transparency and supporting innovative care delivery models such as the direct dental care agreements, House Bill 273 strengthens both patient access and accountability within the system.

The Alaska Dental Society appreciates the legislature's attention to oral health policy and respectfully urges the committee to support House Senate Bill 273. Thank you, Madam Chair. I am happy to answer any questions. Thank you, Dr. Willis, for your testimony. Do we have any questions from the committee?

Representative Fields. Uh, thank you. Through the chair, Ms. Willis, how many other states have done these direct care dental agreements? Dr. Willis. Uh, thank you.

Uh, yes, um, through the chair, uh, Representative Fields, We have approximately 32 states with some iteration of the direct healthcare agreement specific to dental. So we will not be the first. 32 States, you said, through the chair? Yes. Yes.

Is—. Could I ask a follow-up? Follow-up. Through the chair, do you have data from those other states about potential loss of dental insurance? Basically consumers switching from insurance to a direct care agreement.

Dr. Willis?

Thank you. Through the chair, Representative Fields. So we do not have specific data on that. However, I would imagine at this point, if 32 states have successfully ask legislation if there would have been a substantial change in the insurance, like that imbalance from dental insurance to these direct healthcare, direct dental care agreements. I don't imagine those 32 states— we would be at the 32 states at this point.

Can I just go follow up? Follow up? When did the— could you talk about the timeframe? When have these states phased in direct care agreements on dental?

Dr. Willis? I'm sorry, do you mind repeating that? How long ago, through the Chair, did these states start experimenting with direct care agreements for dental?

Through the Chair, I cannot answer that. I would say I know for sure We have the American Dental Association has been working on these type of dental insurance reform legislation since at least 2018, if— and that's, let's say, of recent memory. We've been pushing that nationally. I don't know off the top of my head how how long some of these states have had it.

Any other questions from the committee for Dr. Willis? Uh, I do have more questions. I, through the chair, I would appreciate if the sponsor and maybe the Division of Insurance could follow up and basically do a regression analysis on dental insurance coverage in states that did implement these just given the cost of a direct care agreement and dental insurance— dental insurance costs are pretty low— I would be concerned that people would basically make a choice and we would have less insurance coverage and potentially risk higher uncompensated care. And I think we'd probably look at the states that implement it and do a little analysis and see, is my concern validated or not? Thank you.

Mr. Sexton. Through the Chair, Buzz Sexton. We also have on the line Paul O'Connor, who's with the American Dental Society. I don't know if he could add any more to this conversation to your question, or if not, then we can certainly get you the details. [FOREIGN LANGUAGE] Actually, let's hold on that, transition to our second invited testifier, and then return back to this conversation.

Do we have any other direct questions for Dr. Willis? Seeing none, we'll turn to our next testifier, Mr. Sean Siegel, the Executive Director of the Alaska Dental Society. If you could please put yourself on the record and begin your testimony.

Thank you, Madam Chair. Uh, for the record, my name is Sean Siegel. I represent the Alaska Dental Society as the Executive Director. We certainly, we as a membership organization, certainly appreciate the opportunity to share with you today the details requested in House Bill 273. And I can tell you, not to beat a dead horse, if you will, in regards to the information shared by Dr. Willis and certainly Mr. Sexton, I can tell you that this would be a tremendous win for patients, starting with patients.

This is messaging and programming that would be shared with every patient that walks through and into a dental clinic, private dental clinic in the state of Alaska. It is very much an opportunity for them to have better transparency with their providers, their insurance providers and carriers, and the fact that Every dental office would have the opportunity to share this probably at least 2 times a year with their patients, this information. That's how— that is how it would get distributed and shared throughout the state, and this would become a tremendous value for patients. And again, we appreciate the opportunity to share this with you today. Thank you, Mr. Siegel, for your testimony.

Do we have any questions for Mr. Siegel? Representative Schwanke. Uh, thank you, Madam Chair. Mr. Siegel, I just kind of curious, maybe you might have an answer to this, or maybe Dr. Willis, I'm not sure, but I'm just kind of curious, would we expect some of the same insurance providers currently offering dental insurance to offer some of these direct dental care plans? Mr. Siegel?

I would defer that, uh, question to Dr. Willis. Dr. Willis, could you answer Representative Schwanke's question?

Uh, yes, through the chair, um, Representative Schwanke, um, The direct dental or in-office plans or the direct healthcare agreements, those are one-on-one between the dentist or dental office and the patient. And so, I mean, if you look at it from a consumer or patient perspective, whatever money they put forward, they know they will get back 100%.

Follow-up? Follow-up? Okay, that's not what I'm reading in here, but another question maybe along those same lines. Would these agreements generally be a set time? Would they generally be like a year-long type of contract, and would the costs be guaranteed to consumer to be locked in?

Um, through the chair, Representative Foskey. So yes, um, the— typically there is a set contract, okay, that the patient signs with the, um, with the office or the dentist, and it is for an agreed amount upon a time. Yes, typically it's a year. I mean, most of us will do, you know, when we go to the dentist, most of us go at least once a year for an exam and at least twice a year for a cleaning. And so typically these in-office plans run on a count— or not necessarily calendar year, but a year at a time.

And to speak, if I may, to the chair on the last question, it might help clarify. So this The direct healthcare agreements don't run through an insurance. However, there are— we call them vendors, right, that we buy our dental supplies and some of our other— let me— laboratory stuff. But there are dental vendors who do offer already like a prescribed dental in-office plan that helps them manage it. And so, there, you know, again, this has been done in 32 states.

It's been utilized. It's been ran through for best practices. And so, for those within this state, you know, they're not having to reinvent the wheel. They can contact one of our dental vendors—Burkhart, Henry Schein, Patterson—and they can get set up on what is a tried and true through dental in-office plan. Okay.

Thank you. I just—. Through the Chair, follow-up? Follow-up? I asked the question very specifically because I'm aware of direct dental care agreements like this in other states where the fine print has not been so easy to read for people.

I'll just leave it at that.

Through the Chair, Bud Sexton, staff to Representative Rafferty, for Representative Schwanke. In the current statute for direct health care agreements, says that— I'm reading from the statute, subsection G, that says a health care provider or health care business may not change the periodic fee under the agreement more than once a year and shall provide at least 45 days written notice of any change in the periodic fee. So there is, in current statute, and this direct for dental would add to that, and If I may, so if you're looking at the bill when you talk about insurers, so insurers are a component of the dental loss ratio component of this bill. Sections 1 through 6 deal only with direct healthcare agreements, which are between a patient directly with, in this case, the dental provider. Thank you for that clarification.

Thank you. Representative Fields. Yeah, so one of the— through the chair, one of the issues that I guess went through a lot of discussion with the direct care agreements and health care was who does consumer protection if it's not insurance. So if there was a direct care agreement with dental, who— in an event where a consumer says, I signed an agreement, I didn't get the coverage, who is the regulator, what is the process for Consumer Protection in that case.

Mr. Sexton. But Sexton staff to representative efforts. And so it would set up through— since it's in the same statutes as a direct health care agreement, I could look through the statute and get back to you, but I believe that's already a component of that. And for any further, we could always ask Director Carpenter if she has any comments on that.

Sure, actually, maybe we we could ask Director Carpenter if that's okay. [Speaker:DR. CARPENTER] Yeah. Madam Chair, just briefly, Representative Ruffridge, to Representative Fields, it's an excellent question because I think you know the answer to it because you added the consumer protection language to the Direct Health Care Agreement a couple of years ago. So the answer to your question is yes, it's there. But we can hear from the director.

[Speaker:MR. HARP] Okay. [Speaker:COMMISSIONER ARKOOSH] Director Carpenter, if you can come up to the presenter's table and expand more about the— Current consumer protection in the direct health care agreement law.

For the record, Heather Carpenter, Director of the Division of Insurance. The current law is in Title 21, so it's under insurance. It is pretty specific what we can do and not do. So what is in the statute is all that we can enforce. So if we— if the Division did get a complaint from a consumer about a provider not giving proper notice, changing the fee, we could certainly enforce that.

But we don't have additional authority beyond what the statute says.

Could I ask a follow-up? Follow-up? So, like, what are some areas that would be potential issues that you would not be be able to address?

Through the chair, Representative Fields, I'm not sure, because we have not received any complaints about individuals who are using direct health care agreements right now. I know when the division was implementing the statute, we contemplated if we had regulatory authority to require more, and we worked with our attorneys and determined no, we did not have regulatory authority to do more. So we are pretty limited in a plain read of what the statute says. Could I ask another follow-up? Follow-up?

Because I think this is the first time we've heard about direct care agreements since the bill, um, and my impression is that Capstone, the company that basically asked for that bill, maybe has not expanded services statewide as much as certainly I anticipated. So maybe we don't have a —ton of experience, but what lessons have we learned since that legislation passed, or have we not had an opportunity to learn because maybe the company that thought they were going to expand didn't expand as much as people anticipated? Through the chair, Representative Fields, I actually think this calendar year, 2026, is going to be a year we're going to learn a lot about direct care agreements in light of the expired enhanced premium tax credits. So we have had a lot of individuals who perhaps can no longer afford premiums on the individual market that may be looking to a direct care agreement or some other coverage like a healthcare sharing ministry to fill that gap. So I think there are options.

I think the company you talk about is operating. I think in terms of where they expanded, I don't want to talk about their business model because I just, I just don't know. Okay. But it's— if I could just close out, through the Chair, it sounds like we haven't gotten enough volume of interaction to really have a lot of insight if we did or didn't do a good job with that bill in terms of consumer protection structure. Is that right?

Through the Chair, Representative Fields, I can tell you I haven't seen a large volume or any complaints that I'm aware of come to the Division. Again, I think it's always helpful on a platform you always have to remind consumers We can only investigate what we're aware is happening. So if consumers are unhappy and see something, they need to let the Division know. I have more questions for Ms. Carpenter, but I'll maybe get back in line.

Sounds good. Okay. And just a quick question. When you mentioned that the Division of Insurance can currently enforce the law for direct health care agreements, so what does that enforcement look like for you all? Is it a fine?

Or is there other mechanisms at hand?

Chair Mina, off the top of my head, I don't want to specify about a fine. There may be authorities, so I can look into that, but we can certainly make sure that someone is operating under the confines of the statute, that they are following those disclosure requirements, and they're not doing anything that is not in line with the statute. Thank you. Uh, and I want to note for the record that Representative Prox joined us at 3:31 PM. And also, as we ask questions, we have Director Carpenter with the Division of Insurance and also Paul O'Connor, Senior Legislative Liaison with the American Dental Association.

Uh, before we turn to Representative Gray, I did want to return back to this question about direct— dental direct health care agreements in other states and trends related to decline in coverage for dental insurance. Mr. O'Connor, could you comment on how that has operated in other states? [FOREIGN LANGUAGE] Thank you for having me on here. I can answer questions. On this.

For quick background, for the record, Paul O'Connor, American Dental Association. I have worked on this issue for a number of years, and as I sat here, I went back to some of my tracking on this, and for the dental bills that passed that I threw into my tracker, I would say they roughly were between 2016-2017, so I would I would say roughly a decade of experience of having these on the books. And also as a relatively paranoid tracker and looking for any hiccups along the way, I would keep my eye out for any problems. And I didn't see any. So it's more of a situation where I heard no news is potentially no news or good news.

In this situation as far as any negative impact on participation or people using dental insurance and things like that. You know, certainly an interesting question and one that potentially might be able to ferret out, but I haven't heard anything about that, so I don't have an answer. Well, my answer is I don't think there's much news on that. Thank you, Mr.— also by the size of the markets as well. Uh, I don't know that there'd be that big of an impact.

That'd be my estimation.

Thank you, Mr. O'Connor. Uh, we'll go to Representative Gray and then Representative Prox. Representative Gray. Thank you. Through the chair, and this question could go to lots of people, but I'll go to Director Carpenter.

It's my understanding that, um, a lot more people have health insurance than dental insurance. Is that correct? For the record, Heather Carpenter, Director of the Division of Insurance. Through the chair, Representative Gray, you are correct. Um, the ACA does not require dental coverage to be a part of their plan.

However, the ACA essential health benefits do require the coverage of pediatric dental, but our insurers operating in Alaska are covering that through the major medical plan. So in short, yes, you are correct. Less people have dental insurance. Thank you. Follow-up?

Follow-up? So I, I guess going in line with Representative Fields' questions, I think maybe these direct dental plans might actually capture folks who for whatever reason have decided for years not to have dental insurance but might decide to get a direct dental agreement. So I'm just— I'm thinking it might work differently than health insurance. Would you think that that might be correct? Through the chair, Representative Gray, it absolutely could.

I think it's, again, that's a policy call for you all to make. I think individuals are looking for more options outside of traditional insurance for sure. One more follow-up. Follow-up? And I think this one might be best for Paul O'Connor, maybe.

I was taught many, many years ago that in general, dental insurance wasn't very good insurance because although it might be low, quote unquote, low cost, the cost of 2 cleanings and an exam every year wasn't really that high, and that if you actually needed major dental work, that your dental insurance may not cover it, like a root canal, for example, may not be covered. And so therefore, you know, if somebody was being very cost-concerned, it would be cheaper to just pay for your dental care in cash than to pay a monthly premium for dental insurance that wouldn't cover a very expensive procedure later on.

Is that true, Mr. O'Connor?

Well, thank you very much, Madam Chair, members of the committee. Uh, that is interesting that you asked that question, and Dr. Willis certainly, I think, would attest to this, that, uh, insurance is a bit of a misnomer when it comes to, uh, coverage for dental care. Uh, it tends to be more of what we would think of as a gift card. Uh, you get a certain amount of money, uh, once a year, and once you use that up, that's the end of the payments from the insurers. So indeed, if you have a couple cleanings, uh, you may use up a quarter of, of your allotment, and then if they find something a little more dramatic, a little more costly, you may hit your maximum and then have nothing left until it's renewed the next year.

So, yes, I think a lot of folks who think of this as insurance, you know, it's a whole— it comes down to a matter of risk. You know, the insurance companies certainly carry much less, if none, risk as compared to health insurers that are insuring against the risk of significant cost situations. So that's the big difference between health insurance, major medical insurance, and dental insurance. Follow-up? Thank you.

This follow-up may be back to Director Carpenter, but the dental loss ratios for dental insurance, we saw on the slide they had about Maine's at 75%, North Dakota at New Mexico at 80%. And am I understanding general loss ratio that the other 20% would be sort of like the profit that the insurance company is making? Because that's the amount that they're collecting but not paying out?

For the record, Heather Carpenter, Director of the Division of Insurance, through the Chair, Representative Gray, no, not necessarily. It could be administrative costs. So when you think about for like medical loss ratio, 80% has to be paid on those direct claims. So, you know, you still have a lot of cost in that administrative bucket to handle and, you know, oversee an insurance operation, but the profit margin is going to be significantly smaller. It could be 1%.

It could be, you know, 2 to 3%. Just speaking from what we certainly authorize in Alaska. I— in Alaska, I can tell you it would never be 20% profit for at least what the Division of insurance is authorizing. Thank you. Representative Prox.

Yes, thank you. Through the chair, I guess to whomever, but a comment was made that people have a kind of an odd conception of insurance. Most, most people think of health insurance as prepaid medical care that they expect to get their most of their money out, and it shouldn't be that way. Insurance is actually financial protection.

Anyway, so the guess— or the question is, have dental insurance policies sort of been restructured in states that have implemented this pre-care or prepaid care model? I would point that direct question to Mr. O'Connor. Mr. O'Connor?

Thank you for the question. And just to clarify, are you speaking of the dental loss ratio or the direct care plans when you ask that question? It could— actually, I'd say both. I'm unaware of of plans altering their design or their operations. At this juncture, I'd say the bulk of the dental loss ratio laws are very similar to what you have before you on reporting only.

I think there's a handful— Massachusetts, Nevada actually has had a dental loss ratio on the books since the mid-'80s. Requirement of 75%. It was an enforcement issue, so that was just re-upped. So that has been on the books, maybe for a couple years. And then it is— New Mexico has a 65%.

So those ones actually set it. The ones that are reporting, I'm unaware of them changing their operations to a large degree.

Follow-up? Follow-up. Yes. So, I would think of them as two separate policies. One of them, the dental or the direct care agreement, would cover cleaning and routine maintenance and maybe minor repairs for a set fee, and then I would buy another policy for big things that can happen.

And I don't know what they are because I don't buy health insurance— I mean, dental insurance— because it does seem to me that it is mostly prepaid care and not much real insurance coverage. That's my opinion of it. Not to— but anyway, it's an expensive way to get prepaid care. And I would think that the— I guess the loss ratio on prepaid care probably would be higher. 75-80%, Something like that.

Whereas on the insurance part, maybe not, because the idea is to have the coverage there and you're paying for something that you hope you don't need.

But I guess what I understand you to say is that the insurance policy or the insurance plans that are offered haven't changed much in states where this direct care agreement has been implemented? Mr. O'Connor?

Thank you again for the question. A lot of the information, you know, we can't— I want to say can't get, don't have access to as far as premiums paid and things like that. So it's hard to say. I'm not— I'm just not aware of significant changes in their operations, particularly in the ones that are reporting. But nothing comes to mind.

Okay. And then actually another question, so I get back in line. Okay, you're back in line. Oh, goodness. Oh.

Move to the—. That was easy. Oh, no, not yet. I'm glad to wait. I'm next in line.

Oh, fine. I put myself in the queue. Especially glad to defer to you, Madam Chair. Thank you. Thank you kindly.

I have a question, a few questions just for the Division of Insurance. The language on the dental loss ratio, what does the Division of Insurance currently do related to medical loss ratio? Again, for the record, Heather Carpenter, Director of the Division of Insurance. Chair Mina, we collect the medical loss ratio reports as part of the rate filing process for major medical plans, but we send those to CMS, and CMS is who— so the Centers for Medicare and Medicaid Medicaid Services is who is doing that analysis on the medical loss ratio. In the language in the bill for a dental loss ratio, is that pretty much the same practice that you're doing with medical loss ratio, or what's the difference with this bill?

Chair Mina, we will be standing up a whole new process to do this because we, we don't do it right now. We, we send it to CMS and they are doing that analysis.

Would you be able to send that analysis to CMS, or is it different because dental insurance is an optional benefit? Chair Mina, CMS does not collect dental loss ratio information. I don't think they would look at it if we sent it to them. So that is why we would be doing a new process here. Okay, thank you.

Then this question is more for, I think, Mr. O'Connor. What's the average price of a dental direct health care agreement?

Oh, I don't have that information. I don't know if that— that's probably going to be proprietary information. A lot of the times when we— for the dental plans, seeking out any sort of information like that has typically been stopped with the concern it's proprietary information. So I don't know if there's a place I could try and find to see if there's some data on what a typical price might be. I just don't know if that exists.

But I'd be happy to look. Thank you. I think I'm curious just how the cost of a dental direct health care agreement compares with a premium of dental insurance that's currently in the Alaska marketplace, and if it is more advantageous for the consumer or if it's more expensive.

I'll ask that question to Director Carpenter as well. What— on the ACA side, what's the average cost of dental insurance? Again, for the record, Heather Carpenter, Director of the Division of Insurance. Of course, that's the one piece of information I did not bring today. I can tell you how many companies we have operating in Alaska, which is 48, who offer dental insurance.

And I can tell you that 7 of those have premiums over $1 million, and 13 of those have at least 1,000 individuals covered in the plan, and only 3 have over 10,000 10,000 individuals covered. But I can get back to you on what those premiums are. Thank you. And how do the amount of Alaskans who buy medical insurance either through the marketplace or other avenues compare to Alaskans— I guess Alaskans who are buying medical insurance and dental insurance versus Alaskans who forego the dental insurance? And then Alaskans who only do dental insurance.

Chair Mena, I will have to get back to you on that. Okay, wonderful. Thank you. Thank you for the follow-up. I'll keep moving on to the queue.

Representative Fields. Thank you. Through the Chair to Ms. Carpenter, I think CMS doesn't regulate dental loss ratios, so I'm guessing your department would have to stand up a new regulatory structure? Through the chair to Representative Fields, that is correct. Okay.

Um, what would that look like? How many staff, or how long would it take? What kind of regulations would he need to promulgate? That kind of thing. Through the chair to Representative Fields, we, um, did contemplate that in our fiscal notes, so I think that's a good place for you to look.

We have, um, one position related to that fiscal note. And some additional costs, but we really tried to break it down for the committee. Um, we will need to adopt regulations. I will say regulations are taking a long time, um, so I don't have a high amount of confidence that regulations would be in place by January 1st, 2027. Got it.

I had a follow-up for Ms. Carpenter. Um, when you look— through the chair— when you look at other states that have implemented dental loss ratio. A lot of them are pretty recent, so maybe we don't have full understanding of the effects. But, um, for small population states, would you say there are any lessons learned among states that have implemented laws like this? Through the chair, Representative Fields, um, I, I don't have a lot of information to go on.

I did reach out to North Dakota earlier in the year This is, you know, brand new policy they're implementing as well. Other states have taken different approaches than what this bill is doing, so I think it's whatever flavor you all want to take it. There's, there's definitely different policy options. Okay, how many dental insurance plans are currently in Alaska? Through the chair to Representative Fields, we have 48 companies, so they could have multiple plans underneath them, but 48 companies offering that dental insurance.

Got it. How many would you say serves small groups of people? Um, of those 48? Through the chair to Representative Fields, um, as I had pointed out, we have 13 that have over 1,000 individuals, um, and only 3 plans that have over 10,000, but I think that 1,000 is probably a good cutoff. Okay.

Yeah, I would be curious through the chair if in other— what's been the effect in other states on these plans with a small number of people? Through the chair to Representative Fields, I think it gets administratively burdensome for small plans. It gets administratively burdensome for the division, so I think it's— Some people might look at how many lives are covered. Some might look at what's that premium threshold. Um, $1 million is generally a pretty good premium threshold for enforcing some of these things.

But again, it's up to you all as policymakers to decide where you want that data to come from and how far down you want to go. Got it. Okay, thank you. All right, next we have Representative Prox, then Representative Gray. Yes, thank you.

Through the chair, would the Division of Insurance be regulating the rates and the coverages for these direct care plans, or is that set up through the market? Through the chair to Representative Prox, no, we would not regulate what they're charging. We would regulate and make sure that they're following the statute and that the consumers have the proper notice that the statute contemplates. But we're not going to tell them what they set that periodic fee at. Okay.

Follow-up? Follow-up? And could the provider, the dentist, manage the whole thing themselves, or are they going to be going through an agency and be a preferred provider of an agency? Agency type thing? Through the chair, I think that's going to be dependent on the size of the dental business and if they have that capacity in-house, or they may partner with another business agency like Dr. Willis talked about who may have experience doing this.

But that's not something the division would interfere with. We would just make sure they're following the statutes if we get a complaint.

Would having a direct care plan precludes an individual from having a separate dental insurance policy? Through the chair, no, it would not. We're seeing that, I think, especially this year on major medical plans. Some people are choosing direct care agreements and maybe a significantly higher deductible a higher wraparound plan. So it, it wouldn't— it would just depend on what each consumer wants to pay.

Okay, thank you. All right, uh, Representative Gray. Thank you. Um, through the chair, back to the dental loss ratio. Um, on the slide that the sponsor provided, they talked about, um, 4 states with specific percentages: Maine at 75% and Massachusetts 83% and I'm going to talk about those two because you mentioned that— that if we talk about Maine, the 75% is going to pay for services, and you said a lot of that 25% would be going to administrative, and they might be making a 1 or 2% profit margin.

Is that correct? Did I remember that correctly? Through the chair, Representative Gray, yes, that is accurate to what I said. So there's an 8% difference between Massachusetts and Maine. So if you were making a 2% profit in Maine— no, no.

So if you're making a 2% profit in Massachusetts and then you went to a state where you were allowed to just do a 75% dental loss ratio, then you could conceivably up your profit margin to 10%. Am I looking at the dental loss ratio correctly? Through the chair, Representative Gray, um, One, I don't know what other states, you know, because insurance is regulated at the state level when it's fully insured. So I don't know what kind of profit margin other states are allowing. I don't know that that would happen.

So I'm not sure. I don't think I'm answering your question. I'm happy to, you know, talk to you offline and maybe we can try to— Thank you. Try to figure that out. Through the chair, I think I'm just noticing like with these pretty dip— big differences in what states are requiring for their dental loss ratio, I'm thinking like you could— insurance companies could make more or less profit based on how different the dental loss ratio is that's required.

And I guess that leads me to my next question, which I believe is for the sponsor.

Through the chair to the sponsor, It seems like to me that the dental loss ratio section of this bill is really to bring some accountability to dental insurance in Alaska and to make them dedicate more of the money they're taking in toward actual dental care. Is that correct? Uh, through the chair, Representative Gray, this is Representative Ruffridge for the record. In the cases of those 4 states, the answer would be yes. In the case of this this bill, the answer would be no.

Uh, the, uh, accountability portion of your question, I think, is correct statement. Yes, there would be suddenly an understanding of what is happening, because currently that's— I, I would venture to say, uh, an opaque area. So you don't really know the answer to the question of the 48 offerings. You don't know really what that metric is coming in at. And so This bill does not seek in any way to shape or direct how that— how those dollars should be spent.

It merely asks the question of how are they being spent, and asking the division to take an active role in looking at that. Follow-up? Follow-up? Thank you. So, that makes sense.

So, really, it's more of like a fact-finding mission. How efficiently or not are dental— is dental insurance in Alaska using its dollars, and where is the dollars going to? Uh, yeah, through the chair, uh, again, Representative Ruffridge, I think that's— that on some level, yes, that's a basic answer. On the other, I think it, it actually is a consumer protection metric. So a consumer who was looking to purchase a dental insurance plan could then say, which is what one of the invited testifiers said, this would be a thing that they say, listen, this plan offers, you know, a 90% or an 80%, or, you know, you potentially wouldn't want to be investing in a plan that's a 20% because you would have less, you know, bang for the buck, so to speak.

Final follow-up. Follow-up? And I think the thing that's just interesting to me is that I appreciate that. And so we would have a lot of information about the 48 plans in Alaska, and we could make better choices about which plan we'd want to use, which is completely different than the first part of the bill, which is about the direct dental plan. So I'm just curious if you could explain, like, how these two halves go together.

Yeah, through the chair, Representative Ruffridge. Again, that, that's a great question. They, they in, in many ways are about— the only heading that connects them both is giving people a choice and, and understanding where they want their value to go. If you're going to pay for something, I think the argument for a direct healthcare agreement is to say, I really know what I'm paying for upfront. It's in the contract.

So I could have sent— I could pay $50 a month, let's say, and I know that that's going to go to a very specific line item. So I know what my own oral health regimen needs to be. It involves some X-rays, some preventative cleaning, maybe a you know, one of those spray things, or you name it, right? And maybe it goes up if you need some other sort of advanced work, and you know specifically what that thing is going to be, and you can pay that cost. Follow-up?

Sorry, I wasn't done. But go ahead. Oh, I was just going to say that, that except that we're not going to be getting dental loss ratios on the direct health plans for the dentist. So in a way, it's like we're going to be doing this data on the insurance companies, but you won't really know— I mean, you have an idea. There's no middleman in terms of when you're paying it directly to your dentist, but, you know, the dentist isn't having to report how much they're keeping for administration and profit in the way that you're requiring the insurance company to report that.

Yeah, thank you, through the chair. And, and again, that comes back to a consumer-first sort of metric, right? So if the consumer says, I see all of the plans that are outlined in front of me. Those are going to cost me $50 a month to afford the plan. It's going to afford me a 50% dental loss ratio.

Or I could sign up for a direct health care agreement. It's also $50 a month, and I have a very clear metric of what it gets me. It gives the consumer the ability to make that choice in a much more educated way. Thank you. Do we have any other questions?

Questions from the committee? Representative Schwanke. Thank you, Madam Chair. Quick question, Representative Ruffridge. Do you have any concerns about the fact that how the statute is currently written, that if you had some preventative coverage under Medicaid, that you would be excluded from being able to participate in a direct dental care agreement?

Uh, no, thank you. Through the chair, this is Representative Ruffridge again, uh, for the record, that provision was actually a requirement when we worked through the dental or the direct healthcare agreement language a couple of years ago. Because there is federal law that requires a direct healthcare agreement or a healthcare provider to bill Medicaid if a patient has Medicaid, that's a requirement under that. So a person with Medicaid is essentially not allowed to enter into a direct health care agreement. If they do, they're at risk of losing their Medicaid coverage.

And so that provision is in that statutory language to protect individuals who are on Medicaid from losing Medicaid by engaging in a direct health care agreement.

Thank you.

I have one last question for Mr. O'Connor. Could you speak to the differences in the products that are offered within a dental insurance plan versus in a dental direct health care agreement, knowing that there's a lot of flexibility and variability in those plans?

Yeah, happy to. Thank you for the question. I would assume that the direct plan agreements— and I've for so long called the direct primary care agreements, so you'll forgive me if I downshift into that term, that those are designed very specifically, very personally between the dentist and the patient. That, I think, that is the big difference between what a dental plan, dental carrier would offer to an employer and an employer who then, you know, provides that dental coverage for their employees. So if I understand the question correctly, I think, you know, to me, that would be the first and the biggest difference between the two.

I'll just follow up on— I guess I'm thinking about products in the different types of services. Like, are there any big difference in the services or any services that are usually covered under dental insurance plans that aren't offered under dental health care agreements or dental direct primary care agreements?

Oh, I would think that the services— again, I would think that my dental friend on the line, the dentist, would know about the dental care provided, of course. But I would think that, you know, it's more— it's usually more about what the patient needs that the dentist is going to pay attention to. That's going to be the first consideration. You know, whether or not it's covered or not becomes a second consideration. So, I think everybody on the call would certainly recognize that.

But, you know, very difficult to compare the two, but my guess is the basic care, the basic design is going to be relatively similar because most of the care patients are going to need is going to be fairly similar. So I would imagine they're going to align fairly closely. All right, thank you. Representative Prox. Thank you.

Just to clarify, I guess, through the chair, would— I would expect that there would be a menu of services, and if you want more services You would just pay a higher price for the coverage policy. As an example, if I didn't want to take the time to brush my teeth 3 times a day and just pay for it in dental care, I could buy a plan that does that. On the other hand, maybe I do want to take better care of my teeth or not drink so much soda pop and eat candy bars.

And that would be somewhat predictable. So are there going to be different— can there be different tier levels in a plan? Or is it once somebody has to offer the same set of services?

Through the Chair, Representative Ruffridge again to Representative Prox. I'm assuming you're talking about a direct healthcare agreement. In a dental field. And the answer to that is it's highly specific. And so you could sign a contract with your dentist for your specific need.

So the dentist could look at you and say, well, these are the 6 things I think we need to follow up on for the next year. Um, if we sign an agreement, that's going to cost you, you know, $75 a month, and this is what it's going to afford you to get. You could do that. And if I go and I have 6 different needs than you, I would sign a different agreement, and we would essentially come up with what that price would be. Now, that being said, I think to the previous testifier, Mr.

O'Connor, I think a lot of what happens in oral health care is very similar. And so, yeah, I could see there being, you know, here's package 1, which is, you know, 2 cleanings and an X-ray, and Here's package 2, and that includes, you know, 2 cavities a year, whatnot. And there would be different costs for each, but it would be up to the individual provider to make those choices and the consumer to choose that. [Speaker:DR. NICHOLS] Right. [Speaker:DR. NICHOLS] And just to comment, the reason I am asking is it's almost dangerous to get into looking at coverage loss ratios because one policy could be based on the highest number of services so that to the provider, they know that within 5 or 10% that they're going to make it to a 90% cost ratio and can make their business work on that.

And somebody else might offer something that is variable and less certain, and they might have a 60% coverage— loss coverage ratio.

And then the other 30%, I guess, is sort of an insurance policy within a prepaid policy. So we've got to be careful about— I'm nervous about the state collecting data and then 5, 10 years down the road it's excuse to dictate coverage and price from the state rather than from the providers.

Thank you. I will now open up public testimony on House Bill 273. First off, is there anyone in the room who wishes to testify? Seeing none, is there anyone online who wishes to testify? Seeing none, I'm going to go ahead and close public testimony.

Any other questions for House Bill 273? Seeing none, I am setting House Bill 273 aside for a future hearing. The next meeting of the House Health and Social Services Committee will be on Tuesday, not on Thursday, in Davis 106, next week on Tuesday. The time is 4:24 PM, and this hearing of the House Health and Social Services Committee is now adjourned.