medical loss ratio


Also found in: Acronyms.

medical loss ratio

Managed care
The percentage of revenues received by a for-profit health plan that are actually be spent on healthcare; the ratio between the cost to deliver medical care and the amount of money that was taken in by a plan.

Insurance companies often have a medical loss ratio of 92 percent or more; tightly managed HMOs may have medical loss ratios of 75 percent to 80 percent, although the overhead (or administrative cost ratio) is concomitantly higher. The MLR depends on the amount of money brought in as well as the cost of delivering care; thus, if the rates are too low the ratio may be high, even though the actual cost of delivering care is not excpetionally high itself.
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The medical loss ratio is set at 85%, meaning that managed care plans can spend only 15% of revenue on administrative costs and profits, with 85% being used for beneficiary care, including paying for claims, expenditures for activities that improve health care quality, and fraud prevention activities.
Medical loss ratio has caused serious harm to agents and brokers and their ability to provide essential services to consumers who depend on them to assist with finding appropriate health insurance, said National Association of Health Underwriters CEO Janet Trautwein.
AHIP, the insurance industry lobbyist, has said the provision is "(https://www.ahip.org/medical-loss-ratio-requirement-penalizing-health-plans-for-investing-in-initiatives-that-improve-health-care-quality-and-safety/) penalizing " insurers by misunderstanding the relationship between a company's Medical Loss Ratio and the value of its plans to its customers.
That was down from a combined medical loss ratio of 103 percent for the comparable period in 2015.
Of three companies that offered plans on Arkansas' health insurance exchange, Centene was the only one that owed rebates based on its medical loss ratio for 2014, the Northwest Arkansas Democrat-Gazette reported.
* The need to exempt agent compensation from the calculation of medical loss ratios (MLRs) in health insurance
To our knowledge, however, no studies have examined which states, by political party control, decided to establish an effective rate review program and create an anticipated loss ratio requirement that is consistent with the federal retrospective medical loss ratio requirement.
Behind all that there is a far more important aspect of insurance reform: mandated medical loss ratio (MLRs) or, as the White House commonly refers to it "the 80-20 rule." It has not received as much attention by the public, but has far more impact on how health care reform moves forward.
The Affordable Care Act's medical loss ratio provision benefited consumers to the tune of $3 billion in 2011 and 2012, through rebates insurers paid to them or reduced health plan spending on overhead, according to a Commonwealth Fund report.
Net premiums written include reinsurance premiums written, reduced by reinsurance ceded, and reduced by ceding commissions and medical loss ratio rebates with respect to the data year (the year preceding the fee year).
The average medical loss ratio (medical costs as a percentage of premium revenues) increased slightly to 82.9 driven by a marginal increase in utilization and insurers pricing to the minimum medical loss ratio requirements.

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