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ACA & CMS Compliance • Financial Modeling

Know Your Medical Loss Ratio Before CMS Does

Model your plan's MLR under ACA and Medicare Advantage rules. See rebate exposure, test what-if scenarios, and find the levers that actually move the needle — before filing season.

80-85%
CMS MLR Thresholds
$1.7B+
Rebates Issued in 2024
3-Year
Aggregation Window

Market Segment & Plan Size

Revenue & Premium

Clinical & Claims Costs

Administrative Costs

Your Medical Loss Ratio
85.4%
CMS Threshold: 85.0%
70% 80% 85% 90% 100%
Compliant
$246M
Clinical Spend
$37.5M
Admin Spend
$4.5M
Underwriting Margin

Rebate Exposure

$0

Your plan is compliant — no rebate obligation.

MLR Component Breakdown

Earned Premium $300.0M
− Taxes & Regulatory Fees $12.0M
Adjusted Premium (Denominator) $288.0M
Incurred Claims $240.0M
+ Quality Improvement $6.0M
− Fraud & Reinsurance Recoveries $1.5M
Clinical Numerator $244.5M
MLR = Numerator ÷ Denominator 84.9%

Per-Member Per-Month (PMPM) Breakdown

Premium PMPM $1,000
Claims PMPM $800
Admin PMPM $125
Margin PMPM $15

Quick Levers: What Moves the MLR?

Sensitivity Analysis

See how changes to each MLR component affect your overall ratio and rebate exposure.

Impact of Claims Cost Changes

Impact of Premium Changes

Impact of QI Investment Changes

Impact of Admin Cost Changes

3-Year MLR Projection

CMS calculates rebates on a rolling 3-year aggregated basis. Model your forward-looking trend.

Year Premium Claims + QI Admin MLR Rebate Risk

How the MLR Formula Works

1

Calculate the Numerator

Add incurred claims (medical + pharmacy) plus quality improvement activities. Subtract fraud recoveries and reinsurance.

2

Calculate the Denominator

Start with earned premium, then subtract federal and state taxes plus licensing and regulatory fees.

3

Assess Compliance

Divide numerator by denominator. If below the ACA threshold (80% or 85% depending on market), the plan owes rebates to enrollees.

Note: MLR calculations shown here follow the general ACA/CMS methodology. Actual MLR filings involve additional adjustments including credibility factors for small plans, deductible adjustments, risk corridor considerations, and state-specific requirements. CMS uses a 3-year aggregation period for rebate calculations. This tool is for educational and planning purposes. Consult your actuarial team and compliance department for official MLR filings.

Need Help Optimizing Your MLR?

BFI builds custom MLR models using your plan's actual financial data — claims analysis, QI activity classification, administrative cost optimization, and rebate avoidance strategies.

Schedule a Consultation →