Medical Loss Ratio (MLR)

Benchmarking Report

Medical Loss Ratio (MLR)

This PDF report includes benchmarking data (in a visual, chart-based format), an comprehensive KPI definition, characteristics of high performers and technical details on measuring Medical Loss Ratio (MLR). Purchase and download this easy-to-understand, presentation-ready report immediately to compare performance levels, set attainable performance targets, and push towards best-in-class performance for this KPI.

What is Medical Loss Ratio (MLR)?

The total amount (in dollars) of claims, and other expenses that improve quality of care, paid to members and healthcare providers by the insurance company over a certain period of time divided by the total premium earned during the same time period, as a percentage.

Why should Medical Loss Ratio (MLR) be measured?

Medical Loss Ratio (MLR) measures the amount of money that a health insurance company spends paying out claims and improving the overall quality of care provided to their policyholders relative to total premium revenue (earned premium) over the same period of time. Through the Affordable Care Act (ACA), the U.S. government sets minimum levels for MLR. Health insurance companies are required to meet a minimum MLR of between 80-85% (depending on plan type - individual, small/large group). If their MLR falls below these levels, they must provide rebates to their policyholders to cover the disparity. For this reason, health insurance companies strive to get as close to the required MLR number (80-85%) as they can, without going too far over (e.g., if the government's MLR requirement is 80%, an insurer with an MLR of 80.5% would be considered very good).

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