Health Care Costs Payable (Tables)

12 Months Ended

Dec. 31, 2019

Information about incurred and paid health care claims development

The information about incurred and paid health care claims development for the year ended December 31, 2018 is presented as required unaudited supplemental information.



In millions	Incurred Health Care Claims, Net of Reinsurance For the Years Ended December 31,
Date of Service	2018		2019
	(Unaudited)
2018	$	44,962	$	44,621
2019			51,426
	Total		$	96,047

In millions	Cumulative Paid Health Care Claims, Net of Reinsurance For the Years Ended December 31,
Date of Service	2018		2019
	(Unaudited)
2018	$	39,440	$	44,373
2019			44,987
	Total		$	89,360
All outstanding liabilities for health care costs payable prior to 2018, net of reinsurance			56
Total outstanding liabilities for health care costs payable, net of reinsurance			$	6,743

Schedule of liability for unpaid claims and claims adjustment expense

The reconciliation of the December 31, 2019 health care net incurred and paid claims development tables to the health care costs payable liability on the consolidated balance sheet is as follows:



In millions	December 31, 2019
Short-duration health care costs payable, net of reinsurance	$	6,743
Reinsurance recoverables	5
Premium deficiency reserve	4
Insurance lines other than short duration	127
Total health care costs payable	$	6,879

Components of change in health care costs payable

The following table shows the components of the change in health care costs payable during 2019 and 2018:



In millions	2019			2018
Health care costs payable, beginning of the period	$	6,147		$	5
Less: Reinsurance recoverables	4			—
Health care costs payable, beginning of the period, net	6,143			5
Acquisitions, net	—			5,357
Reclassification from pharmacy claims and discounts payable ⁽¹⁾	—			776
Add: Components of incurred health care costs
Current year	52,723			6,594
Prior years	(524		)	(42		)
Total incurred health care costs ⁽²⁾	52,199			6,552
Less: Claims paid
Current year	46,158			6,303
Prior years	5,314			260
Total claims paid	51,472			6,563
Add: Premium deficiency reserve	4			16
Health care costs payable, end of period, net	6,874			6,143
Add: Reinsurance recoverables	5			4
Health care costs payable, end of period	$	6,879		$	6,147

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(1)	As of the Aetna Acquisition Date, the Company reclassified $776 million of the Pharmacy Services segment’s unpaid retail pharmacy claims to third parties from pharmacy claims and discounts payable to health care costs payable as the third party liability was incurred to support the Health Care Benefits segment’s insured members.

(2)

Total incurred health care costs for the year ended December 31, 2019 and 2018 in the table above exclude (i) $4 million and $16 million, respectively, related to a premium deficiency reserve related to the Company’s Medicaid products, (ii) $41 million and $4 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the consolidated balance sheets and (iii) $285 million and $22 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the consolidated balance sheets.