Medical Expense✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under the PPACA medical loss ratio (MLR) rules, which statement is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The PPACA MLR requires health insurers to spend a minimum share of premium dollars on clinical services and quality improvement: 80% in the individual and small group markets and 85% in the large group market. Insurers that fail to meet the ratio must rebate the excess premium to policyholders.
Why the other options are wrong
- B) This reverses the two thresholds; the 80% figure applies to the individual/small group market and 85% to large group.
- C) There is no uniform 90% MLR; the statutory split is 80/85 depending on market segment.
- D) MLR applies to commercial health insurers in the individual and group markets; it is not limited to Medicare Advantage.
Memory hook
80 cents individual, 85 cents group — every premium dollar must mostly buy care, not overhead. Miss it, and you rebate.