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Medicare Advantage MLR Optimization Engine.

Calculates the Medical Loss Ratio (MLR) math that forces health insurance companies to spend exactly 85% of premiums on healthcare, and the perverse incentives it creates to inflate overall medical costs.

## The Perverse Incentives of MLR

In 2010, the ACA established the Medical Loss Ratio (MLR). It sounded perfect: Health insurers are legally forbidden from taking more than 15% of your premium as profit. 85% MUST be spent on your healthcare. However, this created a terrifying, perverse economic incentive across the entire US Healthcare system.

### FAQ

**Q: Why does MLR make healthcare more expensive?**
A: Simple math. If an insurer's profit is capped at a flat 15%, how do they increase their literal dollar profit to appease Wall Street? They must increase the size of the total pie. **15% of $1 Billion is $150 Million. 15% of $2 Billion is $300 Million.** Insurers are financially incentivized to let hospital executives raise prices and drug companies charge more, because higher medical costs justify charging higher premiums, which drastically increases the insurer's 15% absolute dollar cut.