Medical Loss Ratios (MLRs) measure how much insurers pay in claims relative to the premiums that they collect. MLRs are used by the financial community and insurance regulators to understand how much risk an insurer is taking on in the form of medical cost paid vs. premiums. The Affordable Care Act requires insurers to maintain a minimum MLR of 85% for Large Group Plans and 80% for Small Group Plans meaning that insurers must pay this percentage of their premiums for medical costs. If insurers do not reach these MLR payout levels they will be required to pay rebates to their policy holders for the difference.
For more information on Medical Loss Ratios and insurance companies, see http://healthcarereforminsider.com/category/insurers/