Health Care Costs Payable

6 Months Ended

Jun. 30, 2021

Health Care and Other Insurance Liabilities [Abstract]

Health Care Costs Payable

Health Care Costs Payable

The following table shows the components of the change in health care costs payable during the six months ended June 30, 2021 and 2020:

	Six Months Ended June 30,
In millions	2021		2020
Health care costs payable, beginning of the period	$	7,936	$	6,879
Less: Reinsurance recoverables	10		5
Health care costs payable, beginning of the period, net	7,926		6,874
Acquisition	—		412
Add: Components of incurred health care costs
Current year	32,183		26,390
Prior years	(709)		(420)
Total incurred health care costs (1)	31,474		25,970
Less: Claims paid
Current year	24,600		20,223
Prior years	6,409		5,704
Total claims paid	31,009		25,927
Add: Premium deficiency reserve	5		29
Health care costs payable, end of the period, net	8,396		7,358
Add: Reinsurance recoverables	18		4
Health care costs payable, end of the period	$	8,414	$	7,362

_____________________________________________

(1)Total incurred health care costs for the six months ended June 30, 2021 and 2020 in the table above exclude (i) $5 million and $29 million, respectively, related to a premium deficiency reserve related to the Company’s Medicaid products, (ii) $27 million and $20 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the Company’s unaudited condensed consolidated balance sheets and (iii) $99 million and $119 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the Company’s unaudited condensed consolidated balance sheets.

The Company’s estimates of prior years’ health care costs payable decreased by $709 million and $420 million, respectively, in the six months ended June 30, 2021 and 2020, because claims were settled for amounts less than originally estimated (i.e., the amount of claims incurred was lower than originally estimated), primarily due to lower health care cost trends as well as the actual claim submission time being faster than originally assumed (i.e., the Company’s completion factors were higher than originally assumed) in estimating health care costs payable at the end of the prior year.

At June 30, 2021, the Company’s liabilities for the ultimate cost of (i) services rendered to the Company’s Insured members but not yet reported to the Company and (ii) claims which have been reported to the Company but not yet paid (collectively, “IBNR”) plus expected development on reported claims totaled approximately $6.4 billion. Substantially all of the Company’s liabilities for IBNR plus expected development on reported claims at June 30, 2021 related to the current year.