Medical Loss Ratio As Market Shaper

I’ve long viewed the medical loss ratio (MLR) requirements established under the Affordable Care Act as an important consumer protection. By requiring health plans to spend a defined share of premium revenue on medical care—80% in the individual and small group markets and 85% in the large group market—the policy was intended to constrain excessive administrative costs and profits while improving value for consumers.

A recent analysis, The Unintended Consequences Of The ACA’s Medical Loss Ratio Requirement, takes aim at the MLR regulations. The authors concluded that “there is little evidence that the MLR requirement has . . .