BENEFITS PAYABLE

12 Months Ended

Dec. 31, 2022

On a consolidated basis, which represents our Insurance segment net of eliminations, activity in benefits payable was as follows for the years ended December 31, 2022, 2021 and 2020:


	2022		2021		2020
	(in millions)
Balances at January 1	$	8,289	$	8,143	$	6,004

Less: Reinsurance recoverables	—		—		(68)
Balances at January 1, net	8,289		8,143		5,936
Acquisitions	—		42		—
Incurred related to:
Current year	76,105		70,024		61,941
Prior years	(415)		(825)		(313)
Total incurred	75,690		69,199		61,628
Paid related to:
Current year	(67,287)		(62,149)		(54,003)
Prior years	(7,428)		(6,946)		(5,418)
Total paid	(74,715)		(69,095)		(59,421)


Balances at December 31	$	9,264	$	8,289	$	8,143

The total estimate of benefits payable for claims incurred but not reported, or IBNR, is included within the net

incurred claims amounts. At December 31, 2022, benefits payable included IBNR of approximately $5.7 billion, primarily associated with claims incurred in 2022. The cumulative number of reported claims as of December 31, 2022 was approximately 173.5 million for claims incurred in 2022, 173.3 million for claims incurred in 2021, and 149.8 million for claims incurred in 2020.

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 $415 million in 2022, $825 million in 2021, and $313 million in 2020.

The medical claims reserve development for 2022, 2021, and 2020 primarily reflects the consistent application of trend and completion factors estimated using an assumption of moderately adverse conditions. In addition, the higher prior year favorable development for the year ended December 31, 2021 was primarily attributable to the reversal of actions taken in 2020, including the suspension of certain financial recovery programs for a period of time impacting our claim payment patterns. The suspension during 2020 was intended to provide financial and administrative relief for providers facing unprecedented strain as a result of the COVID-19 pandemic.

Incurred and Paid Claims Development

The following discussion provides information about incurred and paid claims development as of December 31, 2022, 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, 2021 and 2020 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.

The following tables provide information about incurred and paid claims development as of December 31, 2022, net of reinsurance.


	Incurred Claims, Net of Reinsurance
	For the Years Ended December 31,
Claims Incurred Year	2020 Unaudited		2021 Unaudited		2022
	(in millions)
2020	$	61,941	$	61,258	$	61,224
2021			70,066		69,698
2022					76,105
Total					$	207,027


	Cumulative Paid Claims, Net of Reinsurance
	For the Years Ended December 31,
Claims Incurred Year	2020 Unaudited		2021 Unaudited		2022
	(in millions)
2020	$	54,003	$	60,886	$	61,224
2021			62,149		69,252
2022					67,287
Total					197,763
All outstanding benefit liabilities before 2020, net of reinsurance					N/A
Benefits payable, net of reinsurance					$	9,264

For additional information regarding our benefits payable and benefits expense recognition, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in this Form 10-K.