National Association of Insurance Commissioners' Letter to the Department of Health and Human Services on Medical Loss Ratios in Obamacare

Medical Loss Ratios (MLR) refer to the percentage of health insurance premiums that must be spent on health benefits as opposed to "administrative costs." Obamacare requires a MLR of 80-85%.

In its letter to Health and Human Services Secretary, Kathleen Sebilius, the National Association of Insurance Commissioners (NAIC) warns the Obama Administration that implementation of MLR could cause insurance market instability—including the potential that insurance companies will go out of business. NAIC also recommends that MLRs be phased in and recommends that exemptions be made for certain states and insurance markets.