3 ms·
The legal minimum MLR is 80%. So if you spend X, the maximum revenue you're legally allowed to have is X * 1.25.
by wat10000 1y ago
The legal minimum MLR is 80%. So if you spend X, the maximum revenue you're legally allowed to have is X * 1.25.
- lotsofpulp 1y agoSorry, I am not following. Medical loss ratio = medical expenses divided by revenue. Margin = money left over after various expenses divided by revenue So if revenue is $100, and medical expenses are $80, then the remaining funds are $20, or 20% margin.
- wat10000 1y agoYou’re right, I had the idea that you divide by cost, not revenue. So a 20% legal maximum margin. Which is still a fair bit above what they actually achieve, so there’s plenty of motivation to reduce their medical spending.