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Medical Loss Ratios: Making Sure Premium Dollars Go to Health Care—Not Profits

By Cheryl Fish-Parcham, Claire McAndrew,


A health insurance company’s “medical loss ratio” (MLR) is the share of premium dollars it spends on health care rather than administrative costs, marketing, and profits. We can protect consumers by requiring insurers to spend a minimum percentage of premium dollars on health care.

Learn about medical loss ratios and existing requirements in California, Maine, Minnesota, New Jersey, New York, and Washington. The brief also explains how health reform would protect consumers by requiring health insurance companies to spend at least 80 percent of premium dollars on health care.

State advocates can also use this piece to find out about other ways to hold insurers accountable and keep health insurance costs affordable.