Health Care Costs Payable (Tables)

12 Months Ended

Dec. 31, 2020

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, 2019 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	2019		2020
	(Unaudited)
2019	$	51,426	$	51,056
2020			54,529
	Total		$	105,585

In millions	Cumulative Paid Health Care Claims, Net of Reinsurance For the Years Ended December 31,
Date of Service	2019		2020
	(Unaudited)
2019	$	44,987	$	50,394
2020			47,567
	Total		$	97,961
All outstanding liabilities for health care costs payable prior to 2019, net of reinsurance			144
Total outstanding liabilities for health care costs payable, net of reinsurance			$	7,768

Schedule of liability for unpaid claims and claims adjustment expense

The reconciliation of the December 31, 2020 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, 2020
Short-duration health care costs payable, net of reinsurance	$	7,768
Reinsurance recoverables	10
Premium deficiency reserve	11
Insurance lines other than short duration	147
Total health care costs payable	$	7,936

Components of change in health care costs payable

The following table shows the components of the change in health care costs payable during the years ended December 31, 2020, 2019 and 2018:


In millions	2020		2019		2018
Health care costs payable, beginning of period	$	6,879	$	6,147	$	5
Less: Reinsurance recoverables	5		4		—
Health care costs payable, beginning of period, net	6,874		6,143		5
Acquisitions, net	414		—		5,357
Reclassification from pharmacy claims and discounts payable (1)	—		—		776
Add: Components of incurred health care costs
Current year	55,835		52,723		6,594
Prior years	(429)		(524)		(42)
Total incurred health care costs (2)	55,406		52,199		6,552
Less: Claims paid
Current year	48,770		46,158		6,303
Prior years	6,009		5,314		260
Total claims paid	54,779		51,472		6,563
Add: Premium deficiency reserve	11		4		16
Health care costs payable, end of period, net	7,926		6,874		6,143
Add: Reinsurance recoverables	10		5		4
Health care costs payable, end of period	$	7,936	$	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 years ended December 31, 2020, 2019 and 2018 in the table above exclude (i) $11 million, $4 million and $16 million, respectively, for a premium deficiency reserve related to the Company’s Medicaid products, (ii) $41 million, $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) $221 million, $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.