September 3, 2024
What Is the Affordable Care Act’s Medical Loss Ratio?
The ACA set MLR standards for health insurers. MLR is the percentage of insurance premium dollars a health insurer spends on health care services and expenses reported as activities to improve health care quality.
For the 2023 MLR reporting year, the MLR standard for the Texas large group market is 85%. The MLR standard for the individual and small group markets in Texas is 80%.
These standards apply to certain fully insured health insurance coverages in the group and individual markets. If an insurer’s MLR doesn’t meet or exceed the ACA’s MLR standard in a certain market segment of a state, the insurer may be required to provide MLR rebates in that market.
2023 ACA MLR Rebates
After calculating the MLR that applies to your coverage, Blue Cross and Blue Shield of Texas will NOT be required to provide MLR rebates for the 2023 MLR reporting year.
For more information, please read Key Questions About the ACA’s MLR.
Key Questions About the ACA’s MLR
Q. What is the ACA’s MLR?
A. The ACA set MLR standards for health insurers. MLR is the percentage of premium dollars that a health insurer spends on health care services and expenses reported as activities to improve health care quality.
For the 2023 MLR reporting year, the MLR standard for the Texas large group market is 85%. The MLR standard for the individual and small group markets in Texas is 80%.
The ACA’s commercial MLR standards apply to certain fully insured health insurance coverages in the group and individual markets. They don't apply to self-insured group health plans or to Medicare and Medicaid.
If an insurer’s MLR doesn’t meet or exceed the ACA’s MLR standard in a certain market segment of a state, the insurer may provide MLR rebates in that market.
Q. For purposes of the ACA’s MLR, what types of activities are considered to be quality improvement activities?
A. Among other things, activities to improve quality of care are designed to improve health outcomes for members. For example, these activities may include:
- Enhance patient safety
- Promote health and wellness
- Improve transparency
- Support meaningful use of health information technology, or
- Prevent hospital readmissions
In general, these activities are aligned with criteria developed by professional medical associations, government agencies, accreditation bodies and other nationally recognized health care quality organizations.