Medical Loss Ratio
The share of premium dollars a health insurer pays out as medical claims, shown as a percentage -- an 85% MLR means 85 cents of every premium dollar went to members' care, leaving 15 cents for administration and profit. It is the single most important payer metric, and it cuts two ways: a LOW MLR means fat margins but can signal under-serving members or invite regulatory scrutiny (the Affordable Care Act sets minimum MLRs and forces rebates below them), while a HIGH or rising MLR means medical costs are outrunning the premiums set a year earlier -- the classic managed-care earnings risk. Definitions differ: a GAAP-reported MLR and an ACA-regulatory MLR are calculated differently, so compare only like with like.
Related terms
Accounts Payable · Adjusted EBITDA · Adjusted EBITDA Ex-SBC · ADR · ARPU · Average Length Of Stay
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