Medical Loss Ratio

Acronym: MLR

The MLR is the share of premium revenues that an insurer or health plan spends on patient care and quality improvement activities, as opposed to administration and profits.27 The ACA requires that, beginning in 2011, insurers in the large group market meet an MLR standard of 85% annually, and insurers in the small group and individual markets meet an MLR standard of 80%. Health insurers must publicly report the portion of premium dollars they spend on health care and quality improvement in each state in which they operate, and those that fail to meet the applicable MLR standard must pay rebates to consumers.