Under the Affordable Care Act, the lion's share of each insurance premium dollar must be spent on health care.
That notion might seem obvious, but previously there was no national standard for what is termed the "medical loss ratio," or MLR. The ratio measures the split between health care spending and administrative and other costs. (Incidentally, MLR is an old insurance term that comes from the accounting departments, where spending on medical care was considered a loss deducted from income.)
