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BENEFITS PAYABLE
 6 Months Ended
Jun. 30, 2017
Insurance [Abstract]  
BENEFITS PAYABLE
BENEFITS PAYABLE
On a consolidated basis, activity in benefits payable, excluding military services, was as follows for the six months ended June 30, 2017 and 2016:
 
 
For the six months ended June 30,
 
 
2017
 
2016
 
 
(in millions)
Balances, beginning of period
 
$
4,563

 
$
4,976

Less: Premium deficiency reserve
 
—

 
(176
)
Less: Reinsurance recoverables
 
(76
)
 
(85
)
Balances, beginning of period, net
 
4,487

 
4,715

Incurred related to:
 
 
 
 
Current year
 
22,576

 
23,211

Prior years
 
(345
)
 
(435
)
Total incurred
 
22,231

 
22,776

Paid related to:
 
 
 
 
Current year
 
(18,332
)
 
(18,720
)
Prior years
 
(3,626
)
 
(3,925
)
Total paid
 
(21,958
)
 
(22,645
)
Premium deficiency reserve
 
—

 
337

Reinsurance recoverable
 
78

 
75

Balances, end of period
 
$
4,838

 
$
5,258


Amounts incurred related to prior periods vary from previously estimated liabilities as the claims ultimately are settled. Negative amounts reported for incurred related to prior years result from claims being ultimately settled for amounts less than originally estimated (favorable development).
Our reserving practice is to consistently recognize the actuarial best estimate of our ultimate liability for claims. Actuarial standards require the use of assumptions based on moderately adverse experience, which generally results in favorable reserve development, or reserves that are considered redundant.
Benefits expense excluded from the previous table was as follows for the six months ended June 30, 2017 and 2016.
 
 
For the six months ended June 30,
 
 
2017
 
2016
 
 
(in millions)
Premium deficiency reserve - Individual Commercial
 
$
—

 
$
161

Military services
 
—

 
6

Future policy benefits:
 
 
 
 
Individual Commercial
 
(36
)
 
(62
)
Other Businesses
 
20

 
25

Total future policy benefits
 
(16
)
 
(37
)
Total
 
$
(16
)
 
$
130

Military services benefits expense in the tables above reflect expenses associated with our contracts with the Veterans Administration.
Incurred and Paid Claims Development
The following discussion provides information about incurred and paid claims development for our Retail, Group and Specialty, and Individual Commercial segments as of June 30, 2017 and 2016, net of reinsurance and the total of IBNR included within the net incurred claims amounts.
Retail Segment
Activity in benefits payable for our Retail segment was as follows for the six months ended June 30, 2017 and 2016:
 
 
For the six months ended June 30,
 
 
2017
 
2016
 
 
(in millions)
Balances, beginning of period
 
$
3,507

 
$
3,600

Less: Reinsurance recoverables
 
(76
)
 
(85
)
Balances, beginning of period, net
 
3,431

 
3,515

Incurred related to:
 
 
 
 
Current year
 
20,010

 
19,259

Prior years
 
(287
)
 
(299
)
Total incurred
 
19,723

 
18,960

Paid related to:
 
 
 
 
Current year
 
(16,385
)
 
(15,766
)
Prior years
 
(2,707
)
 
(2,946
)
Total paid
 
(19,092
)
 
(18,712
)
Reinsurance recoverable
 
78

 
75

Balances, end of period
 
$
4,140

 
$
3,838


At June 30, 2017, benefits payable for our Retail segment included IBNR of approximately $2.7 billion, primarily associated with claims incurred in 2017.

Group and Specialty Segment
Activity in benefits payable for our Group and Specialty segment, excluding military services, was as follows for the six months ended June 30, 2017 and 2016:
 
 
For the six months ended June 30,
 
 
2017
 
2016
 
 
(in millions)
Balances, beginning of period
 
$
578

 
$
616

Incurred related to:
 
 
 
 
Current year
 
2,629

 
2,556

Prior years
 
(31
)
 
(38
)
Total incurred
 
2,598

 
2,518

Paid related to:
 
 
 
 
Current year
 
(2,117
)
 
(2,000
)
Prior years
 
(518
)
 
(543
)
Total paid
 
(2,635
)
 
(2,543
)
Balances, end of period
 
$
541

 
$
591


At June 30, 2017, benefits payable for our Group and Specialty segment included IBNR of approximately $477 million, primarily associated with claims incurred in 2017.

Individual Commercial Segment
Activity in benefits payable for our Individual Commercial segment was as follows for the six months ended June 30, 2017 and 2016:
 
 
For the six months ended June 30,
 
 
2017
 
2016
 
 
(in millions)
Balances, beginning of period
 
$
454

 
$
740

Less: Premium deficiency reserve
 
—

 
(176
)
Balances, beginning of period, net
 
454

 
564

Incurred related to:
 
 
 
 
Current year
 
304

 
1,816

Prior years
 
(26
)
 
(97
)
Total incurred
 
278

 
1,719

Paid related to:
 
 
 
 
Current year
 
(223
)
 
(1,396
)
Prior years
 
(378
)
 
(417
)
Total paid
 
(601
)
 
(1,813
)
Premium deficiency reserve
 
—

 
337

Balance, end of period
 
$
131

 
$
807


At June 30, 2017, benefits payable for our Individual Commercial segment included IBNR of approximately $119 million, primarily associated with claims incurred in 2017.




Reconciliation to Consolidated

The reconciliation of the net incurred and paid claims development tables to benefits payable in the consolidated
statement of financial position is as follows:
 
Reconciliation of the Disclosure of Incurred and Paid Claims Development to Benefits Payable, net of reinsurance
 
 
 
 June 30,
 
 
2017
 
Net outstanding liabilities
 
 
Retail
$
4,062

 
Group and Specialty
541

 
Individual Commercial
131

 
Other Businesses
26

 
    Benefits payable, net of reinsurance
4,760

 
 
 
 
Reinsurance recoverable on unpaid claims
 
 
Retail
78

 
     Total reinsurance recoverable on unpaid claims
78

 
 
 
 
     Total benefits payable, gross
$
4,838