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Medical Claims Payable
 12 Months Ended
Dec. 31, 2014
Medical Claims Payable [Abstract]  
Medical Claims Payable
Medical Claims Payable
A reconciliation of the beginning and ending balances for medical claims payable for the years ended December 31 is as follows:
 
Years Ended December 31
 
2014
 
2013
 
2012
Gross medical claims payable, beginning of year
$
6,127.2

 
$
6,174.5

 
$
5,489.0

Ceded medical claims payable, beginning of year
(23.4
)
 
(27.2
)
 
(16.4
)
Net medical claims payable, beginning of year
6,103.8

 
6,147.3

 
5,472.6

Business combinations and purchase adjustments
—

 
—

 
804.4

Net incurred medical claims:
 
 
 
 
 
Current year
56,305.8

 
55,894.3

 
48,080.1

Prior years redundancies
(541.9
)
 
(599.1
)
 
(513.6
)
Total net incurred medical claims
55,763.9

 
55,295.2

 
47,566.5

Net payments attributable to:
 
 
 
 
 
Current year medical claims
50,353.9

 
49,887.2

 
42,832.4

Prior years medical claims
5,420.0

 
5,451.5

 
4,863.8

Total net payments
55,773.9

 
55,338.7

 
47,696.2

Net medical claims payable, end of year
6,093.8

 
6,103.8

 
6,147.3

Ceded medical claims payable, end of year
767.4

 
23.4

 
27.2

Gross medical claims payable, end of year
$
6,861.2

 
$
6,127.2

 
$
6,174.5


Amounts incurred related to prior years vary from previously estimated liabilities as the claims are ultimately settled. Liabilities at any period end are continually reviewed and re-estimated as information regarding actual claims payments, or runout, becomes known. This information is compared to the originally established year end liability. Negative amounts reported for incurred medical claims related to prior years result from claims being settled for amounts less than originally estimated. The prior year redundancy of $541.9 shown above for the year ended December 31, 2014 represents an estimate based on paid claim activity from January 1, 2014 to December 31, 2014. Medical claim liabilities are usually described as having a “short tail,” which means that they are generally paid within twelve months of the member receiving service from the provider. Accordingly, the majority of the $541.9 redundancy relates to claims incurred in calendar year 2013.
The following table provides a summary of the two key assumptions having the most significant impact on our incurred but not paid liability estimates for the years ended December 31, 2014, 2013 and 2012, which are the completion and trend factors. These two key assumptions can be influenced by utilization levels, unit costs, mix of business, benefit plan designs, provider reimbursement levels, processing system conversions and changes, claim inventory levels, claim processing patterns, claim submission patterns and operational changes resulting from business combinations.
 
Favorable Developments
by Changes in Key Assumptions
 
2014
 
2013
 
2012
Assumed trend factors
$
(399.5
)
 
$
(428.4
)
 
$
(394.4
)
Assumed completion factors
(142.4
)
 
(170.7
)
 
(119.2
)
Total
$
(541.9
)
 
$
(599.1
)
 
$
(513.6
)

The favorable development recognized in 2014 and 2013 resulted primarily from trend factors in late 2013 and late 2012, respectively, developing more favorably than originally expected as well as a smaller but significant contribution from completion factor development. The favorable development recognized in 2012 was driven by trend factors in late 2011 developing more favorably than originally expected.