Glossary

medical loss ratio

The ratio of money paid out by an insurer for claims, divided by premiums collected for a particular type of insurance policy. Low loss ratios indicate that a small proportion of premium dollars was paid out for benefits, while a high loss ratio indicates that a high percentage of the premium dollars was paid out for benefits. The Affordable Care Act (ACA) sets minimum medical loss ratios for health plans effective Jan. 1, 2011.