Health Insurer Responses to Medical Loss Ratio Regulation

Researchers look at how insurance companies responded to the Affordable Care Act’s (ACA) provision that at least 80 percent of consumer premiums must now go to spending on actual care or quality improvement efforts, otherwise known as the medical loss ratio (MLR).

The Issue

Using data self-submitted by insurance companies from 2010-2012, the authors find that following the implementation of the MLR in 2011, insurers are using a much higher percentage of premiums on actual health spending than they were in 2010 and before.

Key Findings

Researchers identify key factors in insurers meeting the MLR, including:

  • Increased beneficiary claims;

  • Slower growth in premium costs;

  • Reductions in administrative overhead; and

  • Insurers with low MLRs exiting the market.


The research suggests insurers did indeed become more efficient, with minimal disruption to the market.

About the Grantee

The Urban Institute (nonprofit) is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. For more information specific to the Urban Institute’s Health Policy Center, its staff, and its recent research, visit