what is the medical cost ratio mcr 
medical cost ratio mcr also referred to as medical loss ratio is a metric used in the private health insurance industry the ratio is calculated by dividing total medical expenses paid by an insurer by the total insurance premiums it collected a lower ratio likely indicates higher profitability for the insurer as it signifies a larger amount of premiums are left over after paying customer insurance claims under the affordable care act aca insurers are required to allocate 80 or more of their insurance premiums toward customer medical expenses or other services that improve healthcare insurers who fail to abide by this standard must return the excess funds back to consumers these rebates amounted to nearly 2 46 billion in 2019 based on figures filed through october 16 2020 