Getting Value for Your Premium Dollars: Medical Loss Ratio (MLR)

The term "medical loss ratio" (or MLR) refers to the amount of insurance premiums that an insurer spends on health care and activities that improve health care quality.

The medical loss ratio is one way the Affordable Care Act makes sure you get better value for your health care dollars. The law requires that 80% to 85% of the money collected by insurance companies be spent on health care services and health care quality improvement rather than overhead and administrative costs.

Starting in 2012, an insurer that does not spend enough on health care or quality-improving activities must give a rebate to people enrolled in the plan or the small business that purchased it.

Coming in 2012: MLR Reporting
Beginning in 2012, insurers' medical loss ratios will be reported on this site. In the meantime, you can learn more about MLR and the Affordable Care Act here.