Medical loss ratio
Some candidates will require that health plans disclose the percent of premiums spent on administrative costs. This requirement mirrors the California health reform proposal requiring that health plans spend at least 85% of premiums on benefits - that is, a medical loss ratio (MLR) of 85%. One national insurer has estimated that this would cut about 2% of its margin. MLRs are closely watched barometers of financial performance for investors. In 2007, the MLRs for national publicly traded health plans were estimated to be 81% and in recent years, MLRs have been declining.
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