Medical Claims and Benefits Payable

12 Months Ended

Dec. 31, 2023

The following table provides the details of our medical claims and benefits payable as of the dates indicated.


	December 31,
	2023		2022		2021

	(In millions)
Fee-for-service claims incurred but not paid (“IBNP”)	$	2,901	$	2,597	$	2,486
Pharmacy payable	202		206		219
Capitation payable	100		94		82
Other	1,001		631		576
Total	$	4,204	$	3,528	$	3,363

“Other” medical claims and benefits payable includes amounts payable to certain providers for which we act as an intermediary on behalf of various government agencies without assuming financial risk. Such receipts and payments do not impact our consolidated statements of income. Non-risk provider payables amounted to $481 million, $228 million and $226 million, as of December 31, 2023, 2022, and 2021, respectively.

The following tables present the components of the change in our medical claims and benefits payable for the periods indicated.


	Year Ended December 31, 2023
	Medicaid		Medicare		Marketplace		Consolidated

	(In millions)
Medical claims and benefits payable, beginning balance	$	2,815	$	452	$	261	$	3,528
Components of medical care costs related to:
Current year	23,749		3,802		1,545		29,096
Prior years	(395)		(11)		(21)		(427)
Total medical care costs	23,354		3,791		1,524		28,669
Payments for medical care costs related to:
Current year	20,999		3,293		1,323		25,615
Prior years	2,069		431		234		2,734
Total paid	23,068		3,724		1,557		28,349
Acquired balances, net of post-acquisition adjustments	82		14		—		96
Change in non-risk and other provider payables	261		(1)		—		260
Medical claims and benefits payable, ending balance	$	3,444	$	532	$	228	$	4,204


	Year Ended December 31, 2022
	Medicaid		Medicare		Marketplace		Consolidated

	(In millions)
Medical claims and benefits payable, beginning balance	$	2,580	$	404	$	379	$	3,363
Components of medical care costs related to:
Current year	22,097		3,390		1,972		27,459
Prior years	(251)		(32)		(1)		(284)
Total medical care costs	21,846		3,358		1,971		27,175
Payments for medical care costs related to:
Current year	19,655		2,944		1,746		24,345
Prior years	1,966		361		343		2,670
Total paid	21,621		3,305		2,089		27,015
Acquired balances, net of post-acquisition adjustments	12		—		—		12
Change in non-risk and other provider payables	(2)		(5)		—		(7)
Medical claims and benefits payable, ending balance	$	2,815	$	452	$	261	$	3,528


	Year Ended December 31, 2021
	Medicaid		Medicare		Marketplace		Consolidated

	(In millions)
Medical claims and benefits payable, beginning balance	$	2,129	$	392	$	175	$	2,696
Components of medical care costs related to:
Current year	18,321		2,970		2,652		23,943
Prior years	(182)		(39)		(18)		(239)
Total medical care costs	18,139		2,931		2,634		23,704
Payments for medical care costs related to:
Current year	16,284		2,573		2,291		21,148
Prior years	1,601		340		139		2,080
Total paid	17,885		2,913		2,430		23,228
Acquired balances, net of post-acquisition adjustments	205		(8)		—		197
Change in non-risk and other provider payables	(8)		2		—		(6)
Medical claims and benefits payable, ending balance	$	2,580	$	404	$	379	$	3,363

The amounts presented for “Components of medical care costs related to: Prior years” represent the amount by which our original estimate of medical claims and benefits payable at the beginning of the year varied from the actual liabilities, based on information (principally the payment of claims) developed since those liabilities were first reported.

Our estimates of medical claims and benefits payable recorded at December 31, 2023, 2022 and 2021 developed favorably by approximately $427 million, $284 million and $239 million in 2023, 2022 and 2021, respectively. The favorable prior year development recognized in 2023 was primarily due to lower than expected utilization of medical services by our members and improved operating performance, mainly in the Medicaid segment. Consequently, the ultimate costs recognized in 2023, as claims payments were processed, were lower than our estimates in 2022.

The favorable prior year development recognized in 2022 was primarily due to lower than expected utilization of medical services by our members and improved operating performance, mainly in the Medicaid segment. Consequently, the ultimate costs recognized in 2022, as claims payments were processed, were lower than our estimates in 2021, which was not discernible until additional information was provided, and as claims payments were processed.

The favorable prior year development recognized in 2021 was primarily due to lower than expected utilization of medical services by our Medicaid members, and to a lesser extent our Medicare and Marketplace members, and improved operating performance. Consequently, the ultimate costs recognized in 2021 were lower than our original estimates in 2020, which was not discernible until additional information was provided, and as claims payments were processed.

The following tables provide information about our consolidated incurred and paid claims development as of December 31, 2023, as well as cumulative claims frequency and the total of incurred but not paid claims liabilities. The pattern of incurred and paid claims development is consistent across each of our segments. The cumulative claim frequency is measured by claim event, and includes claims covered under capitated arrangements.


Incurred Claims and Allocated Claims Adjustment Expenses							Total IBNP		Cumulative number of reported claims
Benefit Year	2021		2022		2023

	(Unaudited)		(Unaudited)
	(In millions)
2021	$	24,167	$	23,979	$	23,912	$	18	133
2022			27,459		27,128		77		163
2023					29,096		2,803		153
					$	80,136	$	2,898


Cumulative Paid Claims and Allocated Claims Adjustment Expenses
Benefit Year	2021		2022		2023

	(Unaudited)		(Unaudited)
	(In millions)
2021	$	21,148	$	23,871	$	23,894
2022			24,345		27,051
2023					25,615
					$	76,560

The following table represents a reconciliation of claims development to the aggregate carrying amount of the liability for medical claims and benefits payable.


	2023

	(In millions)
Incurred claims and allocated claims adjustment expenses	$	80,136
Less: cumulative paid claims and allocated claims adjustment expenses	(76,560)
All outstanding liabilities before 2021	3
Acquired balances	96
Non-risk and other provider payables	529
Medical claims and benefits payable	$	4,204