XML 18 R18.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
BENEFITS PAYABLE
 12 Months Ended
Dec. 31, 2019
Insurance [Abstract]  
BENEFITS PAYABLE BENEFITS PAYABLE
On a consolidated basis, activity in benefits payable, excluding military services, was as follows for the years ended December 31, 2019, 2018 and 2017:
 
 
2019
 
2018
 
2017
 
 
(in millions)
Balances at January 1
 
$
4,862

 
$
4,668

 
$
4,563

Less: Reinsurance recoverables
 
(95
)
 
(70
)
 
(76
)
Balances at January 1, net
 
4,767

 
4,598

 
4,487

Incurred related to:
 
 
 
 
 
 
Current year
 
54,193

 
46,385

 
44,001

Prior years
 
(336
)
 
(503
)
 
(483
)
Total incurred
 
53,857

 
45,882

 
43,518

Paid related to:
 
 
 
 
 
 
Current year
 
(48,421
)
 
(41,736
)
 
(39,496
)
Prior years
 
(4,267
)
 
(3,977
)
 
(3,911
)
Total paid
 
(52,688
)
 
(45,713
)
 
(43,407
)
Reinsurance recoverable
 
68

 
95

 
70

Balances at December 31
 
$
6,004

 
$
4,862

 
$
4,668


Amounts incurred related to prior years 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).
As previously discussed, 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. We experienced favorable medical claims reserve development related to prior fiscal years of $336 million in 2019, $503 million in 2018, and $483 million in 2017. The table below details our favorable medical claims reserve development related to prior fiscal years by segment for 2019, 2018, and 2017.
 
(Favorable) Unfavorable Medical Claims Reserve
Development
 
2019
 
2018
 
2017
 
 
Retail Segment
$
(386
)
 
$
(398
)
 
$
(386
)
Group and Specialty Segment
50

 
(46
)
 
(40
)
Individual Commercial Segment
—

 
(57
)
 
(56
)
Other Businesses
—

 
(2
)
 
(1
)
Total
$
(336
)
 
$
(503
)
 
$
(483
)

The medical claims reserve development for 2019, 2018, and 2017 primarily reflects the consistent application of trend and completion factors estimated using an assumption of moderately adverse conditions. Favorable prior period development primarily resulted from our Medicare Advantage medical business. The unfavorable Group and Specialty medical claims reserve development for 2019 reflects higher than expected claims trend and provider settlements.
         



Benefits expense reduction of $22 million associated with long-duration future policy benefits for the year ended December 31, 2017 was excluded from the previous short duration benefits payable rollforward table.
Incurred and Paid Claims Development
The following discussion provides information about incurred and paid claims development for our segments as of December 31, 2019, net of reinsurance, as well as cumulative claim frequency and the total of IBNR included within the net incurred claims amounts. The information about incurred and paid claims development for the years ended December 31, 2017 and 2018 is presented as supplementary information.
Claims frequency is measured as medical fee-for-service claims for each service encounter with a unique provider identification number. Our claims frequency measure includes claims covered by deductibles as well as claims under capitated arrangements. Claim counts may vary based on product mix and the percentage of delegated capitation arrangements.
Retail Segment
Activity in benefits payable for our Retail segment was as follows for the years ended December 31, 2019, 2018 and 2017:
 
 
2019
 
2018
 
2017
 
 
(in millions)
Balances at January 1
 
$
4,338

 
$
3,963

 
$
3,506

Less: Reinsurance recoverables
 
(95
)
 
(70
)
 
(76
)
Balances at January 1, net
 
4,243

 
3,893

 
3,430

Incurred related to:
 
 
 
 
 
 
Current year
 
48,983

 
41,323

 
38,604

Prior years
 
(386
)
 
(398
)
 
(386
)
Total incurred
 
48,597

 
40,925

 
38,218

Paid related to:
 
 
 
 
 
 
Current year
 
(43,831
)
 
(37,189
)
 
(34,781
)
Prior years
 
(3,714
)
 
(3,386
)
 
(2,974
)
Total paid
 
(47,545
)
 
(40,575
)
 
(37,755
)
Reinsurance recoverable
 
68

 
95

 
70

Balances at December 31
 
$
5,363

 
$
4,338

 
$
3,963


At December 31, 2019, benefits payable for our Retail segment included IBNR of approximately $3.6 billion, primarily associated with claims incurred in 2019. The cumulative number of reported claims as of December 31, 2019 was approximately 123.0 million for claims incurred in 2019, 109.6 million for claims incurred in 2018, and 104.7 million for claims incurred in 2017.
    




The following tables provide information about incurred and paid claims development for the Retail segment as of December 31, 2019, net of reinsurance.
 
 
Incurred Claims, Net of Reinsurance
 
 
For the Years Ended December 31,
Claims Incurred Year
 
2017
Unaudited
 
2018
Unaudited
 
2019


(in millions)
2017
 
$
38,604

 
$
38,341

 
$
38,310

2018
 

 
41,323

 
40,984

2019
 

 

 
48,983

 Total
 
 
 
 
 
$
128,277



Cumulative Paid Claims, Net of Reinsurance


For the Years Ended December 31,
Claims Incurred Year

2017
Unaudited
 
2018
Unaudited

2019


(in millions)
2017

$
34,781


$
38,232


$
38,310

2018



37,189


40,841

2019





43,831

 Total





$
122,982

All outstanding benefit liabilities before 2017, net of reinsurance

N/A

Benefits payable, net of reinsurance

$
5,295


Group and Specialty Segment
Activity in benefits payable for our Group and Specialty segment, excluding military services, was as follows for the years ended December 31, 2019, 2018 and 2017:
 
 
2019
 
2018
 
2017
 
 
(in millions)
Balances at January 1
 
$
517

 
$
568

 
$
579

Incurred related to:
 
 
 
 
 
 
Current year
 
5,708

 
5,466

 
5,403

Prior years
 
50

 
(46
)
 
(40
)
Total incurred
 
5,758

 
5,420

 
5,363

Paid related to:
 
 
 
 
 
 
Current year
 
(5,081
)
 
(4,957
)
 
(4,843
)
Prior years
 
(553
)
 
(514
)
 
(531
)
Total paid
 
(5,634
)
 
(5,471
)
 
(5,374
)
Balances at December 31
 
$
641

 
$
517

 
$
568


At December 31, 2019, benefits payable for our Group and Specialty segment included IBNR of approximately $567 million, primarily associated with claims incurred in 2019. The cumulative number of reported claims as of December 31, 2019 was approximately 9.7 million for claims incurred in 2019, 10.8 million for claims incurred in 2018, and 11.1 million for claims incurred in 2017.
    
The following tables provide information about incurred and paid claims development for the Group and Specialty segment as of December 31, 2019, net of reinsurance.
 
 
Incurred Claims, Net of Reinsurance
 
 
For the Years Ended December 31,
Claims Incurred Year
 
2017
Unaudited
 
2018
Unaudited
 
2019


(in millions)
2017
 
$
5,403

 
$
5,358

 
$
5,372

2018
 

 
5,466

 
5,501

2019
 

 

 
5,708

 Total
 
 
 
 
 
$
16,581



Cumulative Paid Claims, Net of Reinsurance


For the Years Ended December 31,
Claims Incurred Year

2017
Unaudited

2018
Unaudited

2019


(in millions)
2017

$
4,843


$
5,351


$
5,372

2018



4,957


5,487

2019





5,081

Total






$
15,940

All outstanding benefit liabilities before 2017, net of reinsurance

N/A

Benefits payable, net of reinsurance

$
641


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:    
 
December 31,
2019
Net outstanding liabilities
 
Retail
$
5,295

Group and Specialty
641

    Benefits payable, net of reinsurance
5,936

Reinsurance recoverable on unpaid claims
 
Retail
68

     Total benefits payable, gross
$
6,004