Medical loss ratio (MLR)

Refers to a provision of the ACA that requires insurers to spend a specific amount of premium dollars on actual care or activities that improve quality for consumers. For example, a MLR of 80% indicates that every 80 cents per premium $1 is spent on customers’ claims, while the remaining 20 cents can be used on administrative costs. The ACA-set MLRs vary by region, and some states have set additional limits.