Health Care Costs Payable

9 Months Ended

Sep. 30, 2022

Health Care and Other Insurance Liabilities [Abstract]

Health Care Costs Payable

Health Care Costs Payable

The following table shows the components of the change in health care costs payable during the nine months ended September 30, 2022 and 2021:

	Nine Months Ended September 30,
In millions	2022		2021
Health care costs payable, beginning of the period	$	8,808	$	7,936
Less: Reinsurance recoverables	8		10
Health care costs payable, beginning of the period, net	8,800		7,926
Add: Components of incurred health care costs
Current year	53,311		48,243
Prior years	(670)		(771)
Total incurred health care costs (1)	52,641		47,472
Less: Claims paid
Current year	43,632		39,887
Prior years	7,468		6,639
Total claims paid	51,100		46,526
Add: Premium deficiency reserve	5		1
Health care costs payable, end of the period, net	10,346		8,873
Add: Reinsurance recoverables	5		4
Health care costs payable, end of the period	$	10,351	$	8,877

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(1)Total incurred health care costs for the nine months ended September 30, 2022 and 2021 in the table above exclude (i) $5 million and $1 million, respectively, for premium deficiency reserves related to the Company’s Medicaid products, (ii) $56 million and $45 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets and (iii) $274 million and $168 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets.

The Company’s estimates of prior years’ health care costs payable decreased by $670 million and $771 million, respectively, in the nine months ended September 30, 2022 and 2021, because claims were settled for amounts less than originally estimated (i.e., the amount of claims incurred was lower than originally estimated), primarily due to lower health care cost trends as well as the actual claim submission time being faster than originally assumed (i.e., the Company’s completion factors were higher than originally assumed) in estimating health care costs payable at the end of the prior year.

At September 30, 2022, the Company’s liabilities for the ultimate cost of (i) services rendered to the Company’s Insured members but not yet reported to the Company and (ii) claims which have been reported to the Company but not yet paid (collectively, “IBNR”) plus expected development on reported claims totaled approximately $7.9 billion. Substantially all of the Company’s liabilities for IBNR plus expected development on reported claims at September 30, 2022 related to the current year.