Medical Loss Ratio (MLR)

Published: | Updated: December 3, 2017

Definition - What does Medical Loss Ratio (MLR) mean?

Medical loss ratio (MLR) is a financial metric used in the Affordable Care Act of 2010. It refers to the percentage of premiums that health insurers spend on claims and other expenses that improve quality of health. The law mandates that insurers must pay out rebates to policyholders if their MLF does not meet 80 percent for individuals and small groups or 85 percent for large groups. This does not apply in the U.S. territories.

Insuranceopedia explains Medical Loss Ratio (MLR)

The Affordable Care Act of 2010, otherwise referred to as "Obamacare," is a US federal regulation signed into law by President Obama on March 23, 2010. It increases the affordability and quality of health insurance to American citizens by reducing the cost of healthcare to individuals and requiring insurance companies to observe the "guaranteed issue" policy to all under the new minimum standards in which the same premium rates apply, regardless of gender or pre-existing conditions

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