Medical Loss Ratio (MLR)
What is the Medical Loss Ratio (MLR)?
Also known as medical care ratio, medical cost ratio, and medical benefit ratio — the medical loss ratio (MLR) is a means to compare a health insurer’s medical claims and quality improvement costs to its total annual revenues.
Also known as medical care ratio, medical cost ratio, and medical benefit ratio — the medical loss ratio (MLR) is a means to compare a health insurer’s medical claims and quality improvement costs to its total annual revenues.
Why is the Medical Loss Ratio (MLR) important in healthcare?
he ACA implementation of MLR helps to balance the tug-of-war between consumer quality of service and insurer profits. Basing the MLR on a three-year rolling average promises that insurers cannot prioritize the recovery of previous losses via higher profits in a given year — however, the regulation does allow insurers to recover some of their reserves during lighter periods of business.